Getting builders on site is taking years amid inefficiencies in Victoria’s planning system, with the Housing Industry Association calling for urgent change.
Victoria’s planning system inefficiencies are costing buyers up to $10,000 a home and need major change to meet government housing goals.
The Housing Industry Association has today released their inaugural Planning Blueprint Scorecard, giving the state a lacklustre two out of five.
A year after a national cabinet meeting announced a national planning reform blueprint alongside a target to build 1.2 million new homes in five years, the state’s struggling housing scheme has been given a failing mark that puts it on a par with Tasmania.
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While ahead of NSW, Queensland and the Northern Territory, which all scored a 1.5 out of five, it’s put the state behind South Australia and Western Australia — which were the nation’s only states to receive a passing mark.
Victoria’s 306,324 home target as part of the 1.2 million new homes goal requires the state to build 61,265 new residences a year from now until 2029. The state has its own loftier target of 80,000.
HIA does not believe either can be achieved within the current planning regime.
Report author Mike Hermon said while Victoria’s planning departments did a great job of identifying new opportunities to transform into housing “you constantly hit your head up against a barrier when you try to do something”.
Victoria’s score of two out of five put it on a par with Tasmania.
The HIA as well as the Urban Development Institute of Australia (UDIA) have questioned the need for three layers of planning and permit approvals to turn farmland into housing.
The state currently takes about six years to rezone land as part of a Precinct Structure Plan, followed by 18 months or more in planning approvals to get that land prepared for sale, and to set out infrastructure needs alongside relevant authorities such as water and sewerage.
“There’s a question of ‘why don’t you do all that when you rezone the land’,” Mr Hermon said.
“They could approve the number of lots and then how it is laid out, and the points for higher and lower density.”
The final approval comes in the form of a building permit, which could also be improved by a “complete review” of the state’s now more than 20-year-old ResCode.
Mr Hermon said the guidelines needed to address “watery” language that was over prescriptive in some instances and left enough room for interpretation that approvals took longer to assess than they should in others.
New housing estates in Victoria could go from farm to home sites far faster if there were key changes made to government planning regimes.
He acknowledged both suggestions could lead to planning jobs being shifted from councils and state agencies to the private sector, a potential money saver for the cash-strapped Allan government.
“We know what we are pushing for is controversial, but the efficiencies we would gain are huge, so it’s worth it,” Mr Hermon said.
HIA Victorian executive director Keith Ryan said any delays in planning would translate to extra costs for developers, which were almost always passed on to buyers.
Mr Ryan said it was likely planning issues could be adding as much as $10,000 to the cost of creating a new home.
“And I don’t think the government would argue that if we got a better planning system, that would help with housing affordability,” he said.
UDIA Victorian president Tom Trevaskis echoed calls to streamline planning, and said his group was looking to work with the government on the issue of rezoned land being unavailable for development due to delays in infrastructure and other issues.
Developers working on new housing estates are running into issues with inconsistent views on land supply around Australia.
“Anything that could be done to streamline the process, including a review of ResCode, would be welcomed by the industry — and now is a good time to look at it,” Mr Trevaskis said.
Development and land firm RPM Group research and data group manager Michael Staedler said getting a Precinct Structure Plan approved took 6-7 years if things went well, but could take closer to 11 years.
Tackling planning matters at the same time, while challenging, could shave as much as 18 months off the time needed to get land ready for development.
Inconsistencies between states on what was considered as part of land supply have also been blamed for weakening housing outcomes, and HIA is advocating for the federal government to create a mandatory national register of land supply so there is a clear understanding of how much is available for housing – and in what time frames.
“Right now the planning tools don’t back up the strategy,” Mr Hermon said.
“This is why we are so concerned, it’s now become quite obvious that the 1.2 million homes by 2029 goal is not going to be met.
“You need it right now, and it should have been right many years ago.”
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