How to put heat on councils and get homes built, now

16 October 2024

This opinion article by Business Council of Australia Chief Executive Bran Black was published in The Daily Telegraph on 16 October 2024.

With too few homes to go around, and fierce demand for what we have, Australia is facing a housing supply crisis. Many of our local councils aren’t helping and need some tough truths about their performance to be told.

We’re building new homes at a snail’s pace. Compared to nine years ago, it now takes almost three extra months to build a home, and more than six extra months to build apartments.

And that’s if we can even get them started. Home approvals are at near decade lows and in many cases move at a glacial pace. To give one grim example from NSW, the Georges River Council, in financial year 2024, had an average approval time of 8.6 months, while Blacktown Council had an average of 65 days.

Nothing about this challenge is new. Plenty of voices have spoken up on how to tackle it. Disappointingly, this has often been to throw out red herrings such as international students.

It’s worth noting that international students typically live in shared spaces, taking up far fewer homes than their numbers imply.

Like it or not, the only game in town when it comes to really solving our housing crisis is building more homes.

The Government rightly identified that we need 1.2 million new homes in the next five years. And there is already good work happening across jurisdictions. But we need to be even bolder.

One big part of that is getting housing approvals firing. And that means making sure councils are doing their job by signing off on them.

One reason we’re not signing off on enough new homes is because we don’t have enough accountability and balance of opinion in the local council approval system. We need a stick and carrot approach to force change.

It’s easy to see why this is a problem. For a local councillor, the angry voices of a handful of local homeowners are likely to have far more influence than national targets or hypothetical new families in unbuilt homes. And we all know the squeaky wheel can often get the grease.

This month the Business Council is launching our ‘It’s time to say yes to housing’ report, and putting a bit more heat on councils will be at the centre of our recommendations to get more homes built.

It starts with publicly rating council performance. Just like we are starting to see in New South Wales, all states and territories should be implementing council report cards.

State-wide council report cards would include the time taken for an assessment to be made, all the way from lodgement to approval.

These report cards would bring some much-needed transparency to whether councils are doing the basic job of managing home approvals.

I hear from our Business Council members that plenty of councils do a great job. But many others sit on decisions for months with little clear reasoning. Or they are simply unresponsive for weeks at a time because one person is on leave.

This is where the stick comes in. If this transparent reporting shows some councils consistently underperform, states and territories should intervene to take planning decision powers off them.

Similarly, there should be a carrot in the form of financial rewards for good performers, something already happening in NSW.

These are just a few ways we can start putting a bit more accountability on the councils which currently hold so many of the levers for getting homes built.

We also need to create a new mechanism for builders to be able to break deadlocks and force a decision after a statutory timeframe is passed—getting a quick yes or no will always be better than no answer at all or, often, a painfully slow response.

And we need to capture more of the housing developments of state-wide economic significance for determination at the state government level, where all interests can be balanced fairly, and the resources of a state government can be brought to bear to undertake complete and timely assessments.

Of course, getting housing supply moving isn’t just about councils and approvals. As our report shows, we’re not short on ideas to get more homes built.

But more than anything, what we need is a mindset shift. The simple fact is we’re not building enough homes and if we are to stand a chance of changing this it’s time to say yes to housing.

 

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