The property industry says Newcastle City Council’s efforts to be included in a state government scheme to subsidise affordable housing will raise prices and discourage investment.
The Newcastle Herald reported last week that the council would apply to the NSW Department of Planning and Environment to be included in State Environmental Planning Policy No.70, which levies developers to help pay for cheaper housing.
Six Sydney councils, City of Sydney, Randwick City, Inner West, Northern Beaches, Ryde and Canada Bay, are covered by the scheme.
A department representative told the Herald that Newcastle was in the area eligible for SEPP 70 coverage.
“There are no legislative barriers which inhibit Newcastle City Council from requesting the minister to add council to SEPP 70,” the spokesperson said.
“A request to the minister must be supported by qualitative and quantitative investigation into the need for affordable housing in the local government area.”
SEPP 70 allows councils to develop affordable housing contribution schemes for certain areas or precincts.
But the Housing Industry Association said extending SEPP 70 to Newcastle would add to the price of new housing.
“The proposal to introduce SEPP 70 locally is a new tax on new home purchasers, who ultimately will bear the cost of any development quotas or levies introduced,’ HIA Hunter executive director Craig Jennion said.
“Affordable housing quotas and levies simply place a cost on the overall development which must be passed on to the buyers of other homes and feeds the affordability challenge.
“The proposal fails to identify that many developers and builders already contribute towards the supply of affordable housing types, based on their price positioning at the lower end of the market and the size and nature of the dwellings they construct.”
Mr Jennion said governments should help increase housing supply using shared equity schemes, home-loan assistance and other measures.
“The provision of additional residential accommodation, in all its forms, will ultimately reduce the pressure for subsidised housing and government assistance,” he said.
The Property Council said bringing policies such as SEPP 70 to Newcastle risked “dampening” the housing market.
“They must simplify our planning system rather than add complexity and be designed so that they do not undermine a growing regional market,” Property Council acting regional director Emma Ashton said.
“Newcastle is Australia’s lead regional city and is creating a brand of growth and innovation, and local people should be able to afford local homes, but what we don’t want to do is introduce policy without checks and balances that could weaken development feasibility and housing supply.
“Encouraging investment and development in Newcastle is key to ensuring we have a strong pipeline of housing to keep a lid on prices.
“The Property Council looks forward to continuing to work with the council on affordable housing policy.”
An Anglicare report in April found that, for the seventh consecutive year, Newcastle and the Hunter had no private rental properties affordable or appropriate for young people on Newstart or Youth Allowance.