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Land Affordability: The Local Government Perspective Cr Dick Gross President, MAV September 2008 Land Affordability – Local Government About local government Planning and Responsible authority – land use planning What is affordable? What can be done Federal Government State Government

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Land Affordability:The Local Government Perspective

Cr Dick Gross

President, MAV

September 2008

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Land Affordability – Local Government

  • About local government

  • Planning and Responsible authority – land use planning

  • What is affordable?

  • What can be done

    • Federal Government

    • State Government

    • Local government

    • Industry

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Local Government in Victoria

  • 79 municipal councils

  • Governed by 635 democratically elected councillors

  • Employs 38 600 people

  • Annual revenue of $4.74 billion

  • Responsible for $47.7 billion in community assets

  • Provide more than 100 services to Victorian communities

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Local Government Statistics

  • Service 128,434 kms of roads (approx 85% of the State’s road network)

  • Maintain more than 1000 grassed sports surfaces

  • Collect 1 million tonnes of kerbside garbage pa

  • Collect 540 000 tonnes of recyclable materials pa

  • Collect 259 000 tonnes of green organic waste pa

  • Spend $40 million on public street lighting pa

  • Loan 50 million books from 310 public libraries to 2.5 million registered library users pa

  • Provide free internet access for more than 1.8 million bookings pa

  • Process more than 49 500 planning applications pa

  • Provide 500 000 maternal and child health consultations pa

  • Provide 306 600 immunisations to preschool and secondary school children pa

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LG Funding Sources

Victorian local government funding was $4.74 billion (2005-06):

  • $2.53 billion or 53.4% in rates (at the extremes 32% and 74%)

  • $841 million or 17.8% in fees, fines and charges

  • $684 million or 14.4% in specific purpose grants

  • $381 million or 8% in general purpose payments (untied revenue)

  • $299 million or 6.3% in other sources

    Local government collects three cents of every dollar raised in Australian taxes. The Commonwealth receives approx 70% and the States receive 27% of total taxation revenue.

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What is Housing Affordability?

  • Affordability is usually defined as the financial cost of housing

  • Other costs are important when considering whether housing is affordable:

    • Transport

    • Social isolation

    • Energy use and other ongoing costs

  • The full life cycle costs of housing is a key consideration in whether it meets affordability goals

  • When assessing housing affordability, it is important that these issues are considered

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Influences on Housing Affordability

Major influences

  • Monetary policy

  • Financial deregulation

  • Taxation policy

  • Speculative investment

  • Land banking by developers

    • Restricts access for small/medium developers and reduces competition and decisions about timing of land release

  • Building regulations

  • Construction boom / increasing supply costs

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Influences on Housing Affordability

Minor influences

  • Local government planning controls / DA processes

    • Re-zoning, Referrals, planning and building approval processes

    • Currently 15 years’ supply of zoned land in Melbourne

  • Developer levies for infrastructure / services in new developments

  • Green building / design requirements

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Competing Demands?

Competing demands exist for all levels of government with the need to:

  • Meet community expectations

  • Deliver strategic outcomes

  • Provide affordable and diverse housing stock

  • Ensure amenity, a healthy environment, energy efficiency, are delivered such that the long-term benefits exceed up front costs

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Housing Affordability - Government Roles

  • Responsibility is shared by all three levels of government

  • Federal Government

    • Fiscal measures and tax regimes to encourage the private sector to provide affordable housing

    • Coordinating role to lead affordable housing initiatives

  • State Government

    • Overall responsibility for the state’s strategic and statutory planning framework and system

    • Manages social housing programs

  • Local Government

    • Plans for residential development and growth

    • Plays an active role in ensuring the housing needs of low-income Victorians are met in local communities

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What Can Be Done?

Federal Government

  • Coordinate intergovernmental strategies through an Affordable Housing Steering Committee

  • Involve State and local government, and housing industry

  • Focus on joint ventures and collaboration to increase diversity of housing stock, particularly at the lower end of the housing market

  • Lead policy development and programs that encourage provision of infrastructure, services, transport options and local employment opportunities for new and emerging communities

  • Commonwealth-State Housing Agreement must aim to increase overall investment in public and non-profit housing

  • Introduce incentives to encourage private sector to provide more affordable housing and to increase affordable rental stock

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What Can Be Done?

State Government

  • Coordinate (with local government) regional housing statements that prioritise demand/provision of affordable housing

  • Ensure stronger links between housing, planning, design, population, employment, health and social policies to meet community needs (particularly for ageing, first home buyers and low incomes)

  • Targeted stamp duty savings

  • Tailor support and programs to boost employment where people live

  • Tailor incentives to encourage housing diversity

  • Planning controls – such as inclusionary zoning

  • Clearer residential zoning to encourage higher density development in priority areas

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What Can Be Done?

Local Government

  • Research local housing needs – local housing strategies can influence availability of affordable housing

  • Ensure housing developments have up front access to services, public transport and infrastructure

  • Set, plan for and monitor regional affordable housing goals

  • Investigate and implement incentives, protocols and other mechanisms

  • Identify surplus and under-utilised government land

  • Advocate to State for negotiated developer contributions, inclusionary zoning, socially-responsible rooming houses and other planning controls

  • Advocate for a national affordable housing agreement

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Examples – Local Government initiatives

Maribyrnong City Council – Social Impact Assessment (SIA)

  • SIA Guidelines for large-scale residential developments

  • Requires developers to assess and report on social impacts of proposal

  • Required 16 SIAs (16-2000 dwellings) since 2000

  • Benefits include:

    • Improved pedestrian and disabled access

    • More affordable housing mix

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Examples – Local Government initiatives

Affordable Housing Information Kit (joint MAV/State government initiative)

  • Development of internal council protocols and processes

  • Guide developers through council processes and facilitate provision of planning permits for affordable housing projects

  • Managing community opposition

  • Best practice examples

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What Can Be Done?


  • Work with governments to identify practical strategies to improve housing affordability

  • Provide a greater variety of housing stock in developments

  • Examine opportunities to provide housing that is easily altered so it is age friendly or can more easily be shared,

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  • The causes of a lack of affordability are many and varied – reflecting both supply and demand issues

  • A response to these matters requires a cooperative government and industry response

  • Ultimately, policy responses are difficult – government will want to maintain house prices at their current level for existing buyers yet reduce prices for new buyers

  • Local government is only a minor player in reducing housing affordability– the development process only causes minor issues

  • Councils can achieve improvements to affordability, as demonstrated by the case studies through innovative approaches to local policy