[+] Disincentivised Councils ‘Roadblock to NSW Housing Development’

It’s a case of “let not thy left hand know what thy right hand doeth” when it comes to regional housing, according to one Sydney developer. Rise Projects filed major plans for a housing precinct at South West Rocks in the Kempsey Shire last year that would deliver nearly 300 apartments in the Mid-North Coast town after working on the project for more than 15 years. But instead of a council willing to work with developers to deliver what the community wants and what the state needs, Rise and planners Willowtree Planning say they have been met with regional ‘Nimbyism’. The project Rise Projects’ founder Daniel Pszczonka has an emotional connection to South West Rocks as a regular visitor and indeed having been married there. He acquired the 4.82ha vacant greenfield site at Phillip Drive, meeting with the council to discuss redevelopment potential for the site in 2020, which had previous approval for heights up to four storeys. Rise lodged a concept development application under assessment for nine buildings of three to six storeys delivering 282 apartments and 1000sq m of retail and hospitality. But a spanner was thrown in the works after the Kempsey Shire Council lodged a planning proposal that would introduce a height limit, of which there is currently none, to 8.5m, potentially putting the development in jeopardy. ▲ Rise is this year due to complete a collection of townhouses at South West Rocks on the NSW Mid-North Coast. “The initial reception from officers in council senior management was positive in 2021, but then there was an election and a change in mayor and councillors, and the council officers shifted to an anti-development position. It was a stark difference,” Rise senior development manager Liam Porritt says. Despite recommendations that suggested height limitations be reviewed to allow an increase in density prior to amending the Local Environmental Plan, the council apparently ignored recommendations and took up very few in their subsequent draft plan, according to Rise. A public consultation of the draft plan found that the “majority of respondents did not agree with adopting the draft strategy, while less than 10 per cent of respondents were neutral and just over 7 per cent agreed the draft strategy should be adopted”. Despite this lack of support, the Structure Plan was adopted in July 2023 with “minor changes” and a planning proposal for the building height amendment was given gateway approval in November 2023. Attempts to get things moving were met with silence, Rise says. “Our various letters to ministers have all been ignored or referred to the planning minister. Department of planning staff have been professional to deal with, but have provided no substantial assistance,” Porritt says. Requests by The Urban Developer for comment from NSW local government minister Ron Hoenig went unanswered. A representative for housing minister Rose Jackson said, “We have not received the listed correspondence below and all planning media enquiries are led by (planning) Minister Paul Scully”. ▲ A render of the project proposed by Rise for the South West Rocks site. Scully and the planning department told The Urban Developer they had replied to initial correspondence from Rise in October, 2023 and were “currently responding” to other letters. Kempsey Council responded for requests for comment regarding the building height planning proposal by saying that “to address concerns and foster sustainable growth, consultation with the community played a crucial role in shaping this decision. “Community feedback highlighted a desire to steer clear of highrise development in South West Rocks. “Discussion between councillors highlighted that the building height restriction does not hinder development but rather promotes liveable and sustainable growth in South West Rocks. “While this restriction will impose limitations, developers can still submit applications for planning variations to build taller buildings, however these will be subject to council approval.” But the issues highlight a lack of recourse or alternative routes for mediation for issues with councils, developers say. Council approach Willowtree Planning managing director Chris Wilson, whose team worked on the Rise South West Rocks project, says that Kempsey council has been particularly incalcitrant. “We have not seen this to the extent that this council is going to before. They are not employing due process, and unfortunately it was a minority who have been consulted, at the expense of the majority,” he says. “When you have a mayor who is saying that housing is a Sydney problem, in direct contradiction to what the Minister for Planning is saying, it makes it difficult for developers and landowners in places like South West Rocks to do any business at all.” While the issue could be dismissed as a one-off, Rise has experienced similar issues elsewhere, suggesting that the problem is much broader. “We’ve found that regional councils in NSW are difficult—they don’t have the capacity to fulfil their wide range of required duties,” Porritt says. ▲ Rise Projects surrendered a controversial 1993 development approval for its townhouse development, according to the Kempsey council. Rise worked on an industrial project in Mittagong in the southern highlands, for example. “During the project, Wingecarribee council was so deficient it was put into administration. It was hoped that the administrators would get things organised but there was limited improvement,” Porritt says. “In NSW it seems like there is often a public preference for small, localised councils, but people don’t recognise that this means less staff, less professionalism, and results in delays and service deficiencies with planning, roads, waste management; all with higher rates due to the inefficiencies.” Wider issues The argument is that these smaller councils do not have the resources to deal with major developments. “To fix the housing crisis in this state, every local government area needs to be proactive in embracing the change and deliver affordable stock in appropriate locations,” Wilson says. “The Minns Government has a monumental task on its hands and the work they have been doing with [transit-oriented development] and medium-density housing policy ... is enacting meaningful and positive changes. “They’re not turning a blind eye, but they have so much on their own plate. They ’ re doing a fair job at turning the corner in changing planning to allow for suitable development and densities in suitable locations. “But there’s been a lack of recognition for the ongoing need and their commitment to also ensure the application of density also goes out to the regions.” ▲ Interest is on the rise for NSW regions, such as Landcom’s plans for a 60-unit build-to-rent project at Bomaderry on the South Coast. Porritt agrees, saying that state agencies can sometimes be demanding in their assessment of proposals—all for the greater good. “That’s what proponents need, timely professional assessment, clear positions from government. The developer can jump and address what’s required and it keeps the system moving,” he says. But this is where councils fall down, despite initiatives such as Planning Delivery Units, the Regional Housing Flying Squad and the Faster Local Assessment Grant program from the NSW Government. “Councils are disincentivised to deliver housing, it’s a task that is beyond these small, understaffed organisations that can’t afford their existing operations without relying on state government grants. The court system is taking on the load to fix the failures of the planning system. “Regional councils don’t have the scale to push past anti-housing Nimby opposition, as a result they naturally act to obstruct any controversial DAs because they cop less flak for that. “The State Government needs to reset the economics so that councils are financially rewarded for housing delivery and penalised for failure to deliver housing.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

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Clare Burnett
Thu 23 May 24

[+] Disincentivised Councils ‘Roadblock to NSW Housing Development’

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