The Property Council of Australia gave a dire warning for the country on Wednesday, calling for massive state intervention in New South Wales to safeguard the country’s competitiveness.
Essentially, the Property Council push is for the kind of programme being undertaken in Auckland through the Regional Growth Forum â€“ establishing land availability & requirements for property sectors, and ensuring infrastructure (including transport) will be in place on time.
“Australia’s international competitiveness will be at risk unless the (NSW) State Government takes a more direct role in managing Sydney’s future employment & housing growth and commits to a major reinvestment infrastructure,” the Property Council warned.
The council was releasing its response to the metropolitan strategy which the NSW Government is preparing. The council’s paper sets out 10 “breakthrough” strategies & 40 recommendations on what the strategy should include.
NSW Property Council executive director Ken Morrison said existing approaches were no longer viable.
“Sydney must plan for a jobs future as well as a housing future,” he said. “Sydney needs to accommodate an extra million people, 620,000 more jobs & 460,000 new homes over the next 20 years. This can be achieved, but not through a business-as-usual approach.
“All the easy options have now gone. The stock of disused industrial land which allowed Sydney to deliver substantial urban consolidation has all but dried up. The Government will need to identify potential growth areas where major urban renewal can take place, set growth targets for these areas, and ensure the planning & infrastructure is in place.”
It’s statements like that that indicate we’re not as backward on this side of the Tasman as some would have us, though our solutions tend to be less drastic. The Property Council’s solution, as it so often is in Australia, is to introduce a dictatorial structure â€“ the council called for the creation of powerful new urban renewal corporations to take over redevelopment in targeted areas.
“The north-west, south-west urban release areas, the cbd to the airport corridor, Parramatta Rd redevelopment â€“ these will need to be delivered through new urban renewal corporations,” Mr Morrison said.
The Property Council said the growth challenge facing Sydney would require a major reinvestment in urban infrastructure and the Government should use responsible debt funding to achieve it.
The Property Council of Australia’s response to the metro strategy contains 40 detailed recommendations. Among the breakthrough strategies it proposed were these:
Set policies to attract one quarter of the extra 620,000 jobs into cbds & key centres
Establish a business lands strategy to protect existing industrial land stocks, generate more land for jobs & solve existing infrastructure servicing bottlenecks
Urgently deliver a land release programme to meet the underlying need for 7000-10,000 new housing sections/year
Accommodate 60-70% of new housing in established areas of Sydney through a major focus of urban renewal of key growth areas & a continued urban consolidation programme
Establish a series of project-specific urban renewal corporations which would have the power to create planning frameworks, raise capital, facilitate infrastructure provision & work with the private sector, and
Deliver high-quality urban environments across Sydney which facilitate social & environmental sustainability with a strong urban design focus.
As a consequence of those, the council the state government would be able to refocus its economic policies by:
launching a state investment plan to drive economic growth & attract business investment, and
expanding the existing state infrastructure strategic plan by linking the metropolitan strategy objectives to the state plan.
The Property Council said the state government should boost infrastructure investment by at least $A5 billion over 5 years through responsible debt funding, and abandon its reliance on levies which drive up home prices.
Mr Morrison said the challenge was significant:
Sydney will need at least an additional 2.1 million mÂ² for new white-collar jobs by 2011
The Sydney cbd has capacity for only about 7 years more supply of new office building
At least 660,000mÂ² more retaio land will be needed to meet population growth by 2011a further 663,164 sq m of land for retailing will be needed to meet population
Only 5 years’ industrial land supply may be available at current pre-leasing levels, and
Too few jobs are near where people live.
“Sydney has a systemic problem in the planning for & delivery of industrial land. The market drivers for this sector remain poorly understood, major problems exist with the lack of servicing of industrial land, no site-specific coordination exists & there is limited planning for post-occupation transport infrastructure. This is severely undermining the Government’s employment objectives, creating huge delays in the delivery of new job-generating investment and costing investors millions of dollars. This is particularly a problem in Western Sydney.
“A strong centres policy is very important. Half of Sydney’s jobs are dispersed and generally distributed in proportion to the population it serves. A quarter are located in cbds & centres (12% of total jobs are in the Sydney cbd). We need to build up our employment as much as possible in key centres while recognising Sydney also needs business parks, industrial parks & bulky goods retailing.
“Many of Sydney’s centres will need to expand significantly to accommodate these jobs.”
Mr Morrison said strategic plans for centres needed to identify & reserve land for future growth. “Opportunities for growth must not be stifled by blockages in development control & outdated plans. Business land uses also face heavy competition from residential development. Much of the recent conversion of industrial land to residential use has occurred with very little strategic thought. The policy of encouraging more apartment buildings in cbds can also undermine their future employment capacity if not planned correctly.”
Among the council’s recommendations were to:
provide incentives for commercial development in key employment centres through density settings to ensure these can compete with out-of-centre locations
designate employment-only zones in core cbd areas to protect future job supply, and
reform strata-title laws to ensure existing strata buildings do not artificially sterilise the growth & evolution of centres, and
establish a business land development liaison committee as a forum for the industry & state government.
On the need for an extra 23,000 homes/year, Mr Morrison said the metro strategy “must dictate where these should go. Currently, housing location is being set by the unco-ordinated planning policies of 44 separate councils. Such an unmanaged approach is not sustainable. It will not guarantee the provision of sufficient housingâ€¦
“The supply of land release housing lots is running way behind schedule. Shortage of land supply is driving up prices and is significantly affecting housing affordability. The urban development programme has only delivered around 4500 new housing lots to the market in the past year, compared to an underlying demand of 7000-10,000 lots.
“The key blockages are the servicing of these sites, rezoning delays due to nadequate upfront statutory & environmental planning, fragmented ownership and uncertainty with regard to levies & value-capture taxes. This is driving down affordability in Sydney and cannot be allowed to continue.”
Mr Morrison said major redevelopments such as the Macarthur region, Darling Harbour & Pyrmont required intervention & leadership from the state government, and the Property Council believed Sydney had a number of opportunity areas where a strong renewal or development focus could occur:
the global crescent from the airport through the Sydney cbd, North Sydney, St Leonards and to Macquarie Park
the vital business zones associated with the M4, M5 & M7 freeways, including Moorebank, Eastern Creek, Weatherill Park & Erskine Park
Sydney’s older secondary town centres such as Burwood, Hurstville, Bankstown, Fairfield, Brookvale, Lane Cove & Epping
government land such as railway stations & interchanges where air-rights can be capitalized
key corridors such as Parramatta Rd, the Hume Highway, Military Rd, Milperra Rd & Canterbury Rd
residential urban release areas, particularly the north-west & south-west sectors
the “fibro belt” middle ring suburbs, and
locations where synergies can be created with universities, hospitals & other institutions.
These corporations would:
ensure all development & infrastructure delivery projects are structured to maximise private sector involvement
assume responsibility for existing state government landholdings to maximize renewal opportunities
have the power to raise capital to fund infrastructure, undertake compulsory acquisition of land as required and work with local businesses, residents & landowners to achieve outcomes, including potential co-operative funding agreements, and
hand back full responsibility to councils once planning, infrastructure & sufficient catalyst projects are in place.