UDIA Policies

A diversified dwelling and land supply market gives purchasers a choice in the location, size, type and cost of homes and land which maintains levels of affordability. The shortage of dwellings and ‘development ready’ land in Perth, in a period of strong and sustained population growth, is a key concern for the industry. Shortages of supply are partly attributable to the complex regulatory framework and subsequent delays have eroded housing affordability particularly for new entrants into home ownership.
Greater efficiencies in land and housing supply will be achieved by:

• A whole of government approach and public private sector cooperation to avoid future extreme market cycles and the resulting negative impacts on affordability;
• Basing the approvals process on triple bottom line sustainability assessment and not be driven solely by local environmental issues;
• Removing duplication of process between government agencies and levels of government;
• Acknowledging the integrity of the planning process, particularly structure planning, where an appropriate level of detail only is required. The current practice of requiring detailed design and the requirement for more design elements in structure plans results in delays and cost over runs;
• Ensuring that referral agencies have the skills and resources they require to facilitate approvals.  Where this is not available in-house, particularly in the case of local government, expert panels should be implemented.

The urban development and housing industries in Australia are considered soft targets by state governments looking to increase revenue through taxation and this has had direct, negative impacts on housing affordability. In Western Australia alone these costs currently contribute to approximately 20% of land development cost in Perth and have contributed to exponential increases in house prices in recent years.
In Western Australia, land taxes have increased by $51 million each year since 2001 while the top rate of land tax has been increased by 25%. Whilst thresholds were significantly adjusted in the 2007/08 state budget, they have still not kept up with the 47% increase in prices experienced in the previous period. Land tax on englobo land for developers is significant and will have an increasing impact on the cost of land in the State as valuations rise.
UDIA’s position is to:

• Oppose increased taxation whether through new taxes or bracket creep;
• Support continued use of taxation tools such as negative gearing to stimulate the market;
• Support the removal of GST from stamp duty;
• Seek immediate re-introduction of the Developer Concession on Land Tax to ensure smooth supply of land to the market throughout the year. This would have a positive impact on housing affordability by ensuring an adequate supply of development ready land at all times thus reducing the potential for the low supply/high cost ratio;
• Support continued review of Land Tax thresholds to avoid bracket creep.

Declining housing affordability in Western Australia is a serious concern and UDIA is working with members, the State Government and other industry bodies to alleviate pressure on first home buyers in particular. UDIA proposes the following strategies to improve housing affordability in WA:

•  Implement concessions/incentives to address supply side issues. This includes tax incentives for investors purchasing properties for rental or tax incentives to encourage building rather than speculation on lots;
• State government to introduce incentives to private sector landlords who charge below market rent, thus increasing the supply of affordable rentals to the market;
•  State government to commit long term to the Shared Equity scheme for eligible households;
• Federal government to commit to the increased First Home Owners Grant beyond June 2009;
•  Balance upfront infrastructure payments with a longer term user pays approach for all infrastructure to reduce the burden on new development;
• Encourage public/private partnerships;
• Promotion of incentives such as density bonuses by local government;
• Review processes/regulations that create delays in the development process as holding costs are a major determinant of end lot price.

UDIA is committed to sustainable development of the urban environment taking into consideration the full gamut of social, economic and environmental factors involved in the process.

• The urban development industry recognises the importance of climate change and expects both the state and federal governments to work cooperatively with the industry to determine appropriate responses;
• Sustainability, rather than site based environmental factors, must be the basis of government decision making;
• Taxation and other incentives need to be provided to developers until the market value of sustainability issues is realised;
• State and local government policy and regulation that impede sustainable outcomes must be reviewed. These may include the use of 3rd pipe, optic fibre, solar orientation of lots and engineering standards;
• Government and industry must work together to improve consumers’ understanding of sustainable living practices. UDIA is strongly committed to EnviroDevelopment as an education tool.

The sustainable supply of raw materials for urban development is pivotal to housing affordability. Reliable supply of raw materials close to urban growth areas relies on cross agency cooperation and policy alignment between all levels of government that ensures future demand is met while accounting for the environment. Delays in the approvals process and onerous environmental requirements threaten the orderly supply of raw materials resulting in increased costs and negative impacts on housing affordability.

UDIA and its members recognise the challenges presented by accelerated climate change. UDIA will encourage its members in the creation of urban development that is capable of adapting to a changing physical environment and to minimising greenhouse gas emissions through innovation, good design, increased efficiencies and technological advances.
These objectives must also be delivered within an economic and regulatory framework that provides certainty for investors and ensures affordability for current and future generations.
UDIA members have a keen interest in policy that relates to the following areas potentially impacted by climate change policy:

• Coastal development;
• Water allocation;
• Non-potable water supply;
• Green building design;
• Subdivision approvals;
• Alternative energy production and interface with grid;
• Water sensitive urban design.

UDIA recognises that sustainability change is a shared responsibility between government and industry. Whilst industry can provide leadership it is government policy and legislation which will have the most significant impact. Government policy development should take into account:

•  Early consultation with the industry and industry associations to achieve optimum outcomes;
• Clear direction to enable the development industry to plan ahead;
• Recognition that administrative burdens can be imposed for little or no gain;
• Clarity regarding the conflicting priorities of housing affordability and sustainability;
• Assurance that there is a whole of government approach that does not send mixed signals to the industry;
• Assurance that sustainability policy is evenly balanced between economic, social and ecological factors.

The orderly supply of urban land relies on an integrated approach to infrastructure and land use planning to achieve the best possible outcomes for urban development.
UDIA proposes:

• Federal, State and local governments must work together toward a bipartisan, long term plan for infrastructure provision;
• Public/ Private partnerships must be encouraged and opportunities created for the private sector to invest in infrastructure;
• Government investment in the future through expenditure of surplus and, if necessary borrowings against future user-pays provision of infrastructure;
•  The state government must identify growth areas more accurately and deliver the necessary infrastructure up front in order to guide sustainable, efficient growth in the right areas. Key infrastructure includes transport, energy, potable water provision, waste water treatment plants, schools, health facilities;
• Growth areas must be identified and environmental assessments prepared well in advance of rezoning applications. In this way, the sites are secured and support the strategic urban planning process by being fully integrated with the provision of other essential infrastructure that underpins sustainable urban development;
• A whole of government approach to ensure coordinated infrastructure provision across government departments is required.

The Economic Regulation Authority (ERA) undertakes reviews of the operation of key government agencies including the Water Corporation and Western Power. The ERA’s ‘user pays’ approach to pricing conspires against regional development and handicaps those choosing to locate in regional areas.
ERA recommendations led to the “Edge of Grid” approach by Western Power which sees regional areas paying significantly more than their metropolitan counterparts for power. The ERA has recently released their report Inquiry into Developer Contributions to the Water Corporation where it recommends changes that could result in some regional areas being faced with increases of 1380% to connect to water supply. The ERA states that development will still occur where it is ‘sufficiently valued’ by the local community to make it viable however this fails to take into account affordability and the need to accommodate service workers in regional areas.
UDIA holds grave concerns for the feasibility of development projects in a number of regional areas and has urged the government not to implement the ERA recommendations until further analysis of the impacts are undertaken.

UDIA is supportive of the objectives of the EPBC Act to protect the environment within the context of ecologically sustainable development. It is the Institute’s view that the processes around the Act must be improved and closer alignment of State and Federal environmental policy is a priority if a more efficient approvals framework for urban land release and better environmental outcomes are to be achieved.
UDIA proposes:

• Environmental assessment to occur at strategic level, prior to urban zoning, to provide a cohesive plan for human habitation whilst recognising the need for preservation. The capacity for strategic assessment needs to be strengthened;
• Government agencies to have an integrated policy framework which, through bilateral agreements, enables single assessment to take place rather than a multi-layer approach involving the Federal, State and Local governments;
• A clear focus on matters of National Environmental Significance, with scientific and logical trigger thresholds from a national perspective;
• Development of policies which can be applied to all matters of National Environmental Significance, and which integrate the triple bottom line into the decision making process;
• A whole of government approach to sustainability which balances economic, social and environmental sustainability;
• The need for due process and a clear and transparent appeals process.
• A rigorous scientific basis must be applied to matters of policy and the ongoing professional development of consultants to industry and State and Federal departmental officers on the latest scientific research findings on matters of policy is critical.