Thursday, March 1, 2012

When less is more: cutting regulatory overkill

The failure of the Queensland Government’s ‘building boost’ to stimulate much activity in the housing construction market proves how hopelessly distracted and flawed policy making has become. This paltry and temporary $10,000 grant to buyers of new housing was supposed to make up for stamp duty hikes and more than a decade of rising regulatory, planning and tax burdens on development which have pushed new home prices skyward. It was never going to work. But the question is, what will?

It’s increasingly looking like a Liberal National Party Government will take the reins at the end of March, and when they do they’ll likely be under considerable pressure to cut taxes in a range of areas - property development and construction included. But the state of the economy and Queensland’s finances are unlikely to permit anything much in the way of big tax reduction measures. The state budget has in the last decade become increasingly dependent on property for revenue to the point that a now weakened property sector (itself the result of over regulation and excessive taxation) is having a magnified effect on the state’s finances. This makes it harder to offer immediate tax relief, however deserved that might be.

There is another lever, though, and one I suspect could have a significant and immediate impact on stimulating development and housing construction, and injecting some mojo into the lacklustre economy generally. A quick and severe curtailment of the regulatory shemozzle that passes for development assessment in Queensland today might just do the trick. 

As The Pulse has noted before, it’s hard to point to anything positive that’s been gained over the last 15 years as regulatory and process-driven paroxysm enveloped the entire domain of planning and urban development.  It now costs much more and takes much longer to do the same thing, in a much less certain (indeed now highly confused) policy environment, than it did 10 or 15 years ago. Simply knowing what can and can’t be done on a particular piece of land is a harder question to answer than it used to be.

This extends even to people’s houses. Relatively simple modifications can now be deemed ‘impact assessable’ under the Sustainable Planning Act, requiring applications to Council and public notification.  The prescribed form of public notice actively invites people to ‘Have your say’.  There’s one of these in my neighbourhood right now – a homeowner wants to knock down part of their house for an extension. I am invited, under SPA, to ‘have my say.’
But is it any of my business? It’s their house on their land, not mine. Provided they comply with whatever building codes apply, why am I being invited to comment on their proposal? Consultation on the planning scheme, when originally drafted, and the codes that make it work, would have been my opportunity to ‘have my say’. It’s absurd to think we have some right to have our say at every stage of the process – from regional planning to local planning and even to individual applications. Little wonder we’re in the mess we’re in.

Here’s what The Act says about public notification:

The purpose of public notification processes is to inform the community and relevant stakeholders of the proposal and to give them the opportunity to:
  • make submissions, including objections, that must be taken into account before the application is decided
  • secure, for those that make a properly made submission, the right to appeal to the court about the assessment manager’s decision if they disagree with part or all of the decision.
Maybe we’ve been lulled into some sense of entitlement that we have the right to object to pretty much anything people propose to do on their land, even if it complies with the intention of the planning scheme. This is just one example of where processes within processes make outcomes so much harder, and costlier.

Cutting red tape in planning and development assessment is virtually a no-cost way to stimulate the development and construction sector. It’s also been identified by the LNP as a priority, should they win the election in March. In theory, it should be relatively simple. We could start, for example, with a charter of plain English, such that planning schemes will spell out in simple, clear language what is intended in defined areas in the community. The tortured syntax which requires the expensive assistance of a planning consultant or lawyer to decipher can go the way of the waste bin. But doing things in theory is easier than doing things in the real world.

How would the community react, for example, if we committed to our planning schemes in plain English terms, setting out, unambiguously and up front what’s intended and what’s not? The community has their say, but once enacted, the scheme and its regulations are no longer subject to ‘have your say’ (again) opportunities on individual applications. If land has been ‘zoned’ (an old term, which ought to make a comeback in our plain English charter) for townhouses, for example, and someone wants to develop townhouses on their land, then they can get on with it. You can’t have two bites at the cherry. If you don’t like the plan and what it’s producing, or you change your mind, exercise your vote at the next election.

The UDIA recently released a paper “Planning for Queensland’s Future,” the first recommendation of which said pretty much that:

“Recommendation 1 – Front load community consultation at the point of plan making and remove impact assessment for all Class 1a (single detached home, row house, terrace house, town house, villa) and Class 2 buildings (units) where those uses are encouraged under a planning scheme.”

This might sound to some like a great leap backwards to the sort of regulatory environment that prevailed in the late 1980s to early 1990s. But surely, if you’ve just gone through 10 or 15 years or so of the dead hand of bureaucracy and find yourself with an unworkable, expensive and hopelessly cumbersome system that isn’t producing better outcomes, why not revert to something that actually worked better?  It could be as simple as dusting off copies of the old State legislation at the time, and local government planning instruments of the time, and using these as guides for designing a more workable system.

But taking away this sense of entitlement that the community has been led to believe is theirs in terms of objecting to pretty much anything (they call them BANANAs  - ‘build absolutely nothing anywhere near anything’) is going to hurt. The NIMBYs won’t like it. The anti-progress, neophobic  preservationists who seem to think the current urban form is nirvana and nothing should change (neither grow, nor shrink but just stay as it is) will protest. They’ll argue their ‘rights’ to have a say over what someone else can do on their own property have been taken away. There’d be vocal protests about ‘rampant development’ and ‘environmental destruction’ and ‘attacks on democracy’ - all bywords for self interest.

Protests may also come from the legion of planning bureaucrats and policy makers who have slowly but inexorably grown attached to the current system and feed handsomely off its processes. For example, the 270 (approximately) staff of the Sunshine Coast Planning and Development Directorate (who evidently outnumber the ratio of doctors to the general population), might have less to do if the process became much simpler. There might only be a need for 50 of them along with a number of building inspectors. Jobs would be lost.

This sort of thing is the inevitable outcome of cutting red tape. Less red tape must mean fewer bureaucrats administering it. It must logically mean fewer processes, fewer opportunities to ‘have your say’ at every step of a process; fewer opportunities for political or protestor interference in perfectly legitimate developments. It also means that any new systems put in place needs to be vastly more efficient, transparent, and accountable. (Despite the labyrinthine processes of the current approach, you could never accuse it of being either transparent or accountable, and certainly not efficient).

Plain English plan making and community consultation at the plan making stage will mean using a language the community understands – something which might prove difficult for a generation trained in the language of obscurity. (Mark Twain allegedly once wrote: “I did not have time to write you a short letter, so I wrote you a long one instead.”)

It might mean moving (finally) to more visual and sensory platforms for plan making, reducing previously complex arrangements to simple, transparent and readily understood plans. Simply knowing what can and can’t be done on particular blocks of land can’t be too much to expect?

Footnote. I was recently swapping notes on this subject with some contacts spread around the globe. I asked if anyone could actually identify a jurisdiction where the burden of overly complex regulatory environments had been collapsed, and where markets had responded and the economy expanded. Their answer?  ‘How about the former Soviet Union?’ they said. How’s that for a comment about the command and control environment we now live in - that it’s seen as comparable to the sorts of excessive controls that existed before perestroika.

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