Dramatic, pivotal changes to the planning scheme and its application at all levels
How it helps:
Adjusting the planning scheme allows more scope to fast track new home approvals, unlock land for development, allow alternative forms of accommodation such as granny flats etc ultimately resulting in more housing supply across all price levels.
By fixing the data sources and the models used to analyse the data that feeds into the planning scheme will first, obviously, allow our council, government and town planners to work with accurate data which is an excellent place to start. But moreso, it will allow for more accurate forecasting and future planning so that we don’t find ourselves in another crisis decades from now because of incorrect data, incorrect analysis and backwards approach.
The challenges faced:
Fundamentally town planning rules are so complex and prescriptive that they fail to provide the type of product needed and result in a reduction in the number and density of properties that should otherwise be achieved for the zoning.
Put simply, the rules at a state and council level are so hard, that supply is less than what it should be or does not occur at all.
Town planning has inputs from a Federal level yet predominately lies within the realm of State and Local Council and it is in these planning areas that we are focusing our attention.
‘A gulf remains [between] planning supply and ability to bring land to the market in a responsive way. This continues to be one of the main barriers to housing market efficiency and should be a key area of focus for governments.’
The Property Council of Australia (PCA) found that these concerns about adequacy of supply are backed up by a study conducted by Research 4, which found that, from now until 2030, active supply capacity in South East Queensland is predicted to average 1,100 lots per month, while peak demand is expected to average 1,400 lots per month (Research 4,2021).
This represents a shortfall of 36,000 lots (93,600 people) in the period 2020-2030. Such a significant shortage will only lead to worsening housing availability and affordability.
This shortfall is occurring despite the Property Council and its members, many other industry groups as well as the Direct Collective long having voiced concerns that Queensland would arrive at this point, sooner rather than later.
The reason there is growing undersupply of property is because Queensland’s planning system lacks the flexibility to quickly respond and adapt to the changing environment. The system is too slow and delivers too little land, and the cost base of new land and housing is too high.Typical structure planning processes still take a decade or more to bring land to market - this is unacceptably slow.
This is exacerbated by high population growth underpinned by strong net interstate migration, which has been accelerated by Queensland’s relative success in managing the COVID-19 pandemic as well as a number of ‘game changer’ infrastructure projects attracting people for work and lifestyle to the state.
To explore the local government challenges, it’s important to understand the key property supply and demand data that Sunshine Coast Council uses. Ultimately, to deliver a planning scheme, Council seeks its modelling and inputs from State sources.
Land Supply and Demand Monitoring report (LSDM)
Queensland Statistician's Office (QSO) population forecasting
It’s important to emphasise that the QSO data is used to justify supply in the LSDM, and therefore Council planning instruments because Council is required to work to State provided forecasting.
The LSDM report is a document Council uses as their benchmarking ‘bible’ when determining the status of property ‘supply’. State development does not have the maturity in their inputs, including using those that come from the Queensland Statistician’s Office (QSO), to accurately support regional area data. In the absence of regional area data, we believe there are failings in how the LSDM report applies to the Sunshine Coast.
Ultimately, the LSDM report is issued with outdated and unsupported data until the model catches up. Although the LSDM report continues to be used as the source of reference by Council, the Queensland Government is undertaking a ‘peer review’ of the LSDM report based on acknowledging that land supply has been significantly overstated.
The PCA rightly pointed out in their 2017 report that while many government departments, housing providers, local governments, private companies, and not-for-profit organisations collect information about various parts of the housing market, there is no central point of reference to understand the extent of the issue, or how it is being addressed.
In addition, the QSO shows that by 2041 the Sunshine Coast’s population (LGA) will increase to around 520,000 people (medium series projections). These calculations are based on data that suggests that from now until 2041, every 5 years less people will move here.
The Sunshine Coast is on a growth trajectory like no other region in Australia. The major projects and infrastructure being built here (greenfield CBD + international airport + subsea broadband cable + infrastructure for the Olympics + more) means it is difficult to calculate the impact it will have as there is nothing to measure it against. It’s because of this we believe the Sunshine Coast is likely to reach a population of 520,000 MUCH sooner than 2041.
We’re already in a major property undersupply, and if Council doesn’t have accurate data in its planning, that undersupply can only continue to grow. The impacts being felt now with incredible price growth, low rental vacancies and increasing homelessness can only get worse.
Between 2011 and 2021, Queensland’s population grew by around 745,000, from 4,476,780 to 5,221,230, with 89 percent of that population growth (665,000 people), occurring in South East Queensland alone. That is the equivalent of the entire population of Townsville and Gladstone relocating to South East Queensland in a five year period. Considering the patterns of the past AND what is in store for the future of the region, do we really think the demand and growth is going to slow down despite everything that’s going on here?
So, how could QSO get the forecasting so wrong?
We believe there are two major issues:
1. QSO uses historical data - looking back and expecting our past to be our continued future
2. Using a ‘regional’ model that lumps the Sunshine Coast into the rest of QLD or even SEQ (eg. one set of assumptions do not fit all) when what is occurring here hasn’t occurred before so its own, new, modelling is required.
Realistically, any real updates to key modelling will likely happen on the other side of the next planning scheme (with the current revision due for release in 2024). That means, unless action is imminent, we will still have the same disappointing outcome.
Noting Council starts on the back foot by using what we believe is insufficient forecasting, there are other areas that require Council’s immediate attention and below we explore the political, strategic and collaborative planning challenges.
The Political
All these planning systems are poorly understood within the community and the governments and councils find themselves having to explain and defend decisions and fight against community groups and poor publicity on projects which all impacts the volume and speed of property supply delivery. We often hear people say they don’t want the Sunshine Coast to ‘become another Gold Coast’ and with that statement often thrown around, we are seeing a lot of resistance and no unity between Council, the community and local businesses. However, we haven’t come across any councillor, council officer, developer or community member who wants to see the beaches on the Sunshine Coast or our protected green spaces developed.
Single Issue Groups (SIG) are currently creating fear around development. Rather than joining in to create solutions, they are bonded in their emphatic view of the problem - of what they don’t want - and focus on that as their singular outcome. They arduously fight against council decisions, and while this is a great part of our democratic process, it has multiple unintended consequences when not exercised with a full understanding of the planning challenges. By pushing back on projects that are key to providing affordable housing, they are actually creating an outcome that is undersupplying the market, creating homelessness and forcing people out of the community.
It would be greatly beneficial for the councils, government groups and the wider community to better understand the benefits of ‘good growth’ to support lifestyle, economies, employment, tax and urban infrastructure provision.
Strategic Planning
Sunshine Coast Council has identified housing affordability as an issue for consideration in its 2041 Planning Scheme Project. It notes there is a need for a greater diversity of housing choice and that housing stress and affordability continue to be a challenge with increasing household running costs. Yet in that very same document, Council also wrote this:
“While the planning scheme can encourage and support housing diversity, it is limited in its ability to deliver affordable housing options and housing affordability outcomes (which are more directly influenced by other factors such as demographics and migration trends, investment preferences, economic conditions and government policy).”
If the planning scheme is not giving due consideration to the updates in demographic mix and volume of migration to the Sunshine Coast, as well as changes in accommodation demand, how can it efficiently plan for our future?
What makes it more difficult to deliver housing supply to the market is when there is duplicative or overlapping requirements between the State and local governments, particularly with the Environment Protection & Biodiversity Conservation Act 1999 requirements overlapping with Commonwealth Government legislation.
Plus,the report by Property Council Of Australia ‘A Home for Every Queenslander - August 2022 Edition’ explains that “Fragmentation of land within the urban footprint means that not all urban land is developable, even if it is not constrained by other planning and environmental restrictions. Willingness of landholders to make land available, serviceability of land and competing land uses, all contribute to constrained availability for housing.”
It would appear that this lack of ‘visibility’ of the current undersupply and all the challenges facing those who attempt to correct the undersupply has continued to hamper the recognition of urgency and the degree of change required. An immediate need exists for a ‘blinkers off’ review of the planning scheme rather than the proposed ‘tweaks’ to what is already in place.
With no new major land releases in the urban footprint since 2005, we are now experiencing the outcome of limited supply and onerous and restrictive planning policy that reduces dwelling supply.
Collaboration with industry
A key impediment to delivering land and therefore housing supply to the market at an affordable price is the cost of infrastructure delivery. Currently, land developers are required to provide all the community infrastructure of a development area at a very high cost and usually this infrastructure and associated payments are required at the outset of the development.
This means that developers need to have significant capital up front for the subdivision process which can impede a developer’s ability to deliver land in large volumes.
Developments also don’t go ahead or even begin without lengthy, complex and often confusing processes to reach agreement with State and local governments which then push out timeframes for land delivery. It was calculated that each year of delay in receiving planning approval costs $6,470 (Urbis- Greenfield Cost Impact Assessment, 2016) - this is an avoidable cost that is being added to the price tag of new homes.
What needs to be done:
In 2017, the Property Council released a joint Position Paper with QCOSS that identified a range of recommendations to address the affordability crisis (Property Council of Australia and the Queensland Council of Social Services).
The Property Council of Australia said it perfectly in their ‘A Home for Every Queenslander’ document: “Urgent reform is required to rapidly deliver new stock to the market, and to leverage the opportunities of the next decade whilst ensuring every Queenslander has access to safe, affordable, fit-for-purpose housing.”
What specifically needs to be addressed?
Stop using outdated data and provide open-source information for town planners that is factually and statistically correct.
Council to stop yielding to single issue groups
An immediate need for a “blinkers off” review of the planning scheme rather than the proposed “tweaks” to what is already in place
Streamline land development approval processes
Plan for forward funding of critical infrastructure by utilities and local councils to reflect growth strategies.
How can this be achieved?
The Property Council of Australia provides some excellent recommendations:
Industry and government need to work together to build the case for bold reform, through educating the community about growth management in SEQ, the role of the regional plan, and the benefits of good development.
Empower and resource economic development Queensland and the growth areas team to expedite development in targeted local government areas, accelerate infrastructure investment, and inform planning for additional SEQ growth areas.
Undertake systemic changes to planning processes and local government obligations to address challenges in the existing planning framework.
Review the cost and payment requirements for infrastructure delivery to new lot developments.
Single housing code - Each Queensland local government has its own housing code, leading to considerable costs and inefficiencies in the design and construction of housing. Adoption of a mandatory housing code would address these issues and would also facilitate different forms of affordable and accessible housing, such as secondary dwellings, that are often not addressed in local government planning schemes.
Monitor and report on dwelling targets annually.
Video/Links/Resources
Property Council of Australia - A home for every Queenslander document (https://www.propertycouncil.com.au/Web/Membership/Divisions/Qld_Office/Web/Membership/Qld_Division/Welcome.aspx?Division=QLD&ShowT_Three=1&hkey=674299f9-6b78-4812-b16d-cce717677e53 )