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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

Land Affordability:The Local Government Perspective

Cr Dick Gross

President, MAV

September 2008

land affordability local government
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
local government in victoria
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
local government statistics
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
lg funding sources
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.

what is housing affordability
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
influences on housing affordability
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
influences on housing affordability8
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
competing demands
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
housing affordability government roles
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
what can be done
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
what can be done12
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
what can be done13
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
examples local government initiatives
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
examples local government initiatives15
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
what can be done16
What Can Be Done?

Industry

  • 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,
conclusion
Conclusion
  • 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