POANSW endorses a regulatory system that encourages and supports all housing suppliers, both large and small, to meet the ongoing changes in demand for housing in NSW. But we are concerned that the Proposed Diversity SEPP, while conceptually a step in the right direction, will fail to encourage market supply to deliver ‘riskier’ diverse housing options.
Proposals such as:
- Introduction of punitive retention levy’s to prevent loss of affordable housing.
- Loss of development concessions.
- The imposition of mandatory community housing provider management
Will have a corrosive effect on the supply, which is acknowledged by NSW Planning on page 11 of the EIE:
‘The proposed introduction of an affordability requirement for boarding house development as set out above in this EIE would mean that this type of housing is no longer facilitated by the planning system”.
We endorse proposals such as incentives for suppliers that invest into segments of the market that are wanting, such as Build to Rent. But these concessions should not be restricted to the top 1% of property investors undertaking massive high rise developments. They should be made broadly available to all property investors, to encourage a more diverse range of developments.
Overall, as concluded by Aaron Gadiel (Partner at Mills Oakley):
…” based on the types of private sector projects we regularly work on — it seems to us that the overall tenor of these changes will have a negative impact on housing supply.
Overall, the changes are likely to:
– increase the cost and risk of obtaining development consent;
– reduce the number of sites available for privately-developed build-to-rent and seniors housing; and
– reduce the housing yield and financial feasibility of some privately-developed build-to-rent/senior housing projects.
It is surprising that — at a time of great economic uncertainty — the NSW Government has released a suite of proposals that are likely to reduce the overall ability of the private sector to develop build-to-rent and seniors housing”. https://www.millsoakley.com.au/thinking/build-to-rent-and-seniors-housing-development-to-lose-the-benefit-of-planning-incentives-and-protections/