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Late Commonwealth land release a tiny part of the housing equation.

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Tanya Plibersek MP Shadow Minister for Human Services, Housing, Women and Youth



Comments today by the Treasurer that the Government plans to sell off Commonwealth land so that more houses can be built won't improve housing affordability without substantial additional spending.

Two minutes to midnight before an election- after being embarrassed by the Labor Party into appearing to do something about housing affordability - selling off bits of Commonwealth land is not a significant contribution to a full-blown affordability crisis.

First, as most economists and developers agree, land supply is not the turn-key solution to the housing affordability crisis.

In NSW alone, for example, more than 33 000 housing blocks are zoned, serviced and ready for development - the majority of the greenfield blocks in Sydney are not even subject to state levies.

Developers are simply not building on vacant land because, after nine interest rate rises, the conditions are not right for construction and sale.

As two developers put it:

…we totally dismiss the argument that releasing more land on our cities’ outskirts is going to affect affordability. Michael McNamara, Operations Director, Australian Property Monitors, 17 March 2007

Every time I see John Howard blaming land supply (for low affordability) I see red because it’s just not true - there are literally thousands of lots available. Peter Icklow, Managing Director of major Sydney developer Monarch, 17 March 2007

Second, a key barrier to development of land is charges imposed by local government in order to fund necessary infrastructure.

These charges will not be affected by the release of more land.

Someone has to pay for roads, sewerage, parks, and services, and so far the Federal Government has proven completely unwilling to even play a part.

Third, the Federal Government has had eleven long years to convert land into residential development, and has failed to do so even when invited by willing purchasers.

For example, in South Australia, the Premier has asked the Commonwealth to contribute a 33 hectare block at Smithfield, in Adelaide, owned by Defence, to a major urban renewal project that has been funded by the South Australian Government.

So far all the Premier has received is an acknowledgement letter.

In NSW, the State Government has sought to purchase Commonwealth land over several years for housing redevelopments.

Mr Costello has just not been interested - despite the NSW Government being prepared to pay for land in prime demand areas including Penrith, Ingleburn and Blacktown.

Indeed, the Federal Member for Lindsay, Jackie Kelly, has opposed plans to have the Commonwealth land sold for housing in her electorate, saying:

The Department of Defence owns a considerable amount of surplus defence land in this area…The State Government's metropolitan strategy [includes] initiatives for high-density dwellings adjacent to town centres and transport infrastructure. This means mass townhouses and flats next to a railway line. The plan is to place a large amount of housing right in the heart of the Penrith CBD…I am pursuing an alternative plan for the development of North Penrith Army Land, which places an emphasis on parking and commercial and high-tech industrial sites…