Thursday, October 7, 2010

Top gear it ain’t.

The decision by the Queensland Government to take planning control of Stockland’s massive Caloundra South development away from the Sunshine Coast Council, prompted a predictable retort from the Local Council. In the process, it brings into perspective the competing tensions between various planning authorities and regulators. Those tensions are getting worse, and none of it is doing anything to reduce red tape, improve decision making, speed up supply and reduce housing costs.

The decision on Caloundra South was controversial not so much because it was called in by the State Government, but because it was handed over to the Urban Land Development Authority, a group labeled by Brisbane Lord Mayor Campbell Newman as “unelected, unaccountable and busily pushing the planning policies of unelected state government bureaucrats on local communities.” (Read the story here). That’s pretty much spot on, though he could have added some equally derisive comments about the ballooning budget of the ULDA and its staff, and questioned why we need a State Planning Department at all, if it is considered so inept at getting anything done that its role is being increasingly usurped by the ULDA.

In fact, why bother with Local Government Planning roles at all, if the ULDA or the State think themselves the only ones competent to assess significant development applications or consider substantial issues of local and regional planning? No doubt that’s the view of the Council of Mayors in South East Queensland, who have loudly objected to the decision on Caloundra South and the increasingly significant role being taken by the ULDA.

The State Government counters by arguing that projects like Caloundra South have been in the planning ‘in tray’ of local government for far too long. A slowing supply of developable land and escalating infrastructure costs are problems laid directly at the door of local government by the state. Caloundra South has been subject to planning assessment and debate within Sunshine Coast Council for around 5 years already, with not a single roof yet to show for it.

The Federal Government buys into the fray by arguing that both State Governments and Local Governments must act on reducing red tape to accelerate the supply of land, but the Feds seem content to play the role of commentator, rather than enforcer.

The Reserve Bank buys into the debate by frequently noting its concerns that artificially restrained land supply and excessive development fees seem to be increasing the cost of a reduced supply of land, in the face of constant demand. Hence, they regard this policy inertia as placing in effect inflationary pressures on housing prices.

So the jurisdictional squabbles worsen and the criticisms mount with no clear end in sight. If you’re in any way a fan of motorsport, a simple analogy might explain the frustrations that housing providers are facing.

Neutral. The engine’s revving and you’re chewing through petrol but you’re not going anywhere. You’ve got an application in with your local authority, and a multitude of various referral agencies. Each begins a long process of assessment, questioning, suggesting, and quite possibly public debate. Be prepared for some overheating as you won’t have any airflow for quite some time.

First gear. You’re off the grid and underway. The engine’s revving its head off, chewing through even more juice, but you’re not going anywhere fast. Your application by now is quite possibly considerably altered from when you first submitted it. While you thought you were submitting a proposal in compliance with the planning regulations, you didn’t factor in the flexibility of those regulations. But at least you’ve now got something you hope will tick the various boxes and will hopefully get approved by the relevant authority.

Second gear. After a few laps in first, you find your project identified by the State Government as something they may ‘call in’ because it is potentially state significant. In the case of one recent residential tower, this could simply mean 300 units in a single apartment complex are deemed ‘state significant’. You’re hopeful though – anything is better than doing laps in first gear, your motor will burn out if you keep that up.

Third gear. Your project doesn’t get called in by the state, it gets flicked to the ULDA as an approval agency. This promises the potential of faster speeds, but you’ll have to return to the grid for a bit, stick it in neutral for a spell as an entirely new agency assesses the proposal and makes a series of fresh recommendations. But you’re told to be prepared to run through the gears again quickly once the flag drops.

Fourth and fifth – the top gears. These gears are available but you’re not allowed to use them. Rumours of the ‘old days’ abound though, when development approvals could be obtained from a single agency inside a month, and headworks charges were reasonable and directly related to the project in question. Entire suburban communities were created this way, housing was affordable relative to incomes, and you knew who was in charge. You reminisce with senior industry players, listening with envy to their stories of completing multiple projects in a single year. You’re struggling to complete one project in several years.

Reverse. The Planning and Environment Court can slam you into reverse faster than you thought possible. This might simply be because a competing project identifies some regulatory idiosyncrasy that allows them to appeal your approval. Advocates of a free market in planning terms quickly turn into protectionists when faced with competition from another project. Or, you could find yourself at the mercy of the EPA who find evidence of koala droppings on your site. Your pleas that they’re in fact feral rabbit droppings don’t get you anywhere, because by now the local paper is giving massive airtime to an environmental lobby who are calling you a greedy developer and an environmental vandal.

Meanwhile, construction starts continue to fall, further choking supply. If we keep this up, we’ll soon be a mirror image of NSW where housing starts are at a 50 year low and problems of affordability chronic and widespread. The other mounting problem is that what’s being widely called a two or three speed planning approvals process now seems officially endorsed: local councils are frequently at odds with the state planning department and then off to the side sits the ULDA working to another set of rules altogether. The word ‘integrated’ has it seems been banished from planning altogether. And ‘consistency’ as a principle went with it - as one eminent planner raised with me, “if the ULDA approves Caloundra South with reduced infrastructure charges, what happens to all those other poor developers on the Sunshine Coast left at the mercy of the Council and their higher charging regime? What about a level playing field on charges? What will happen to fair competition under those circumstances?”

They might be stuck in first gear, while someone else running the same race is lapping them in third, while another got slammed into reverse. Fair it isn’t, and top gear it ain’t.

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