Govt bid to kick-start housing
NORTHERN Rivers councilswere caught by surprise yesterday after the State Government announced it was making sweeping changes to local government charges on new housing developments.
According to the Government, the new changes will lower the cost of new housing construction and provide certainty, transparency and fairness to councils, landowners, developers and the community.
“These reforms are necessary to increase housing affordability and kick-start housing construction,” Premier Kristina Keneally said yesterday at the announcement of the Comprehensive Housing Supply Strategy with State Planning Minister Tony Kelly.
The changes include:
The capping of Section 94 contributions (see definition in breakout box) to $20,000 a lot.
Retaining rate-pegging, but providing a more transparent process of setting the rate through the Independent Pricing and Regulatory Tribunal (IPART), including requests by councils for rate variations, and;
Limiting Section 94 contributions to essential infrastructure necessary for the development to happen, such as open space and community facilities, roadworks and stormwater management.
Mr Kelly said the changes would make a dramatic difference.
“This will provide a more transparent process for rate-setting and give councils the ability to fund important local infrastructure,” he said.
Lismore City Council general manager, Paul O’Sullivan, didn’t see a problem with the capping of Section 94 contributions in the Lismore domestic market.
“The average cost of a Section 94 contribution in Lismore for a residential development lot is around $9000,” he said.
“So there is no change there.
“These aren’t to be confused with Section 64 charges that relate to waste and water.”
The introduction of IPART into the process for setting rates was welcomed by Mr O’Sullivan.
“Council welcomes the review role by IPART as they have anestablished track record of being independent,” he said.
“It’s a good model they use inreviewing rates.
“It won’t solve all the problems, but it is a step forward.”
Despite some concerns the capping of Section 94 contributions to $20,000 could divert millions of dollars from councils, thereby forcing up rates for some residents, Mr O’Sullivan disagrees.
“Councils aren’t able to raise the rates as they want,” he said.
“Rate-pegging and the IPART process won’t allow this to happen.”
WHAT IS A SECTION 94 CONTRIBUTION?
Section 94 contributions are where councils may levy contributions for the provision of public amenities and services, such as roads and community facilities which may be required as a result of development taking place.