Parramatta Council affordable housing tax will slow down housing supply

Parramatta Council affordable housing tax will slow down housing supply
Parramatta Council affordable housing tax will slow down housing supply

GUEST OBSERVER

The potential for the city of Parramatta to become an equal city centre with the Sydney CBD could be under threat from significant taxes proposed on development.

Many developers keen to build in Parramatta are now reconsidering their projects as the City of Parramatta adds excessive taxes on developments.

I have been amazed at the number of developers who have contacted me about the latest proposal to require developers to give 10 percent of their apartments to the council.

When this tax is added to the value capture proposals of the council that require half the land value of uplift along with the State Government's levy of $20,000 per apartment the viability of development in Parramatta is under threat.

There seems to be an unrealistic ‘Magic Pudding’ attitude that the staff of the City of Parramatta Council have that developers will fund all of their desires and needs.

If the same logic was applied to the council they should ask their own rate payers to cover the rates of the 10 percent of the residents most in need or for the council to require the Parramatta supermarkets to give away food to 10 percent of shoppers.

Some Urban Taskforce members have estimated that the combination of levies and taxes proposed in Parramatta will add $100,000 to the cost of an average two bedroom apartment.

While council may be hoping to help those who are struggling to get into the Sydney market the end result of the levies will be to make most dwellings far less affordable and this price hike will pull even the affordable homes up in price.

We are concerned that the Greater Sydney Commission (GSC) has asked each council to develop their own affordable housing policy rather than give leadership to ensure a long term sustainable approach occurs across Sydney.

The Greater Sydney Commission in their draft District Plans did propose an approach that was based on floor space uplift from rezoning and that this would only be where it was economically sustainable. It now seems that councils across Sydney are ignoring the GSC approach and only responding to the requirement to develop their own approach. Many councils are under administration and administrators seem to be taking a popularist approach that simply forces developers to pay for affordable housing.

The Urban Taskforce has proposed an approach to affordable housing for Sydney that could yield 40,000 affordable homes over 10 years. This would modify the government’s Affordable Rental Housing SEPP of 2009 to ensure that if 20 percent of a project was affordable apartments then a 20 percent floor space and height uplift would be given.

The SEPP provides for the affordable units to be available for 10 years and then returned to the developer. This approach would provide a continual supply of affordable rental homes across Sydney.

We are concerned that, if implemented, the Parramatta approach could spread to most councils across metropolitan Sydney and the end result would be a dramatic slowdown in housing supply.

The Urban Taskforce calls on the NSW Government to step in to the out of control free-for-all that is happening with councils that are adding a variety of taxes for affordable housing so that a consistent approach can be developed.

Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted here.

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Parramatta Sydney Cbd

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