The NSW premier may reshape the face of the city forever. Or he may spend years in a guerilla war that saps his political capital.
In one decision, made with no warning or consultation and little explanation, NSW Premier Chris Minns may reshape the face of Sydney forever.
Or he may spend years in a guerilla war that saps his political capital until, exhausted, he capitulates to the selfishness on which this city’s property market is built.
NSW Premier Chris Minns at a Woolworths outlet in Sydney last week. Simon Bullard
On June 15, Minns offered property developers – who are generally treated in NSW politics like Middle Eastern bikie gangs, as tabloid punching bags – an extra 30 per cent height on apartment buildings worth more than $75 million, if they subsidise 15 per cent of the homes.
A few days later, the planning department qualified the promise, which it said would apply to buildings within 800 metres of train stations and other transport “hubs” in Sydney.
The property industry was pleasantly stunned. One apartment developer spent $260 million on land in Sydney the day of Minns’ announcement. The lot was suddenly worth more; he was worried the seller would realise. He didn’t.
Mirvac’s shares rose 7 per cent in one week. Billionaire Harry Triguboff, owner of Meriton, became even richer. Architects began, mentally, redrawing plans upwards.
Housing charities were pleased too. As Minns surely knew, they had struck an anti-council compact (although none would name their enemy) with developers called the Good Growth Alliance. The objective was to get more apartments built, and make some so non-expensive that teachers and single parents might be able to afford them.
Sydney mayor Clover Moore in March. Getty
The policy secrecy was necessary, according to sources, to stop developer front-running. And to prevent a pre-emptive strike by Sydney Lord Mayor Clover Moore and minor anti-development council mayors across Sydney, including Liberal Zac Miles in Hunters Hill, which data on lack of housing suggests is Australia’s most-selfish suburb.
Moore is a fierce advocate of municipal prerogative, which is used by wealthy Sydneysiders to keep lesser classes far from the harbour, waterways and beaches.
“This removes planning powers from councils,” Moore said, “who are best placed to understand the needs of their communities.”
That is, of course, Minns’ objective. That he is prepared to side with Triguboff over Moore in what otherwise might be a mythical quest to make Sydney housing affordable suggests the Labor premier paid attention during economics classes at Princeton in 2012.
Meriton Apartments in the Sydney suburb of Zetland.
In Australia, the intellectual basis for the policy was laid by Peter Tulip, an economist at the Centre for Independent Studies think tank who laboriously itemised councils’ failure to meet state-mandated new-housing targets.
Tulip’s under-heralded work was used by NSW’s productivity commissioner, Peter Achterstraat, who published an analysis last month so full of common sense and direct writing that it is unclear how it emerged from government.
“A family might ideally like to live in Newtown, but if little new housing is built there, they compromise by living in Ashfield, further from the CBD,” Building more homes where people want to live says.
“This means another, lower-income family is squeezed out from Ashfield to Burwood, and so on. The upshot is that building more housing in Newtown improves affordability locally, in Ashfield and Burwood, and any other locations that families consider reasonable alternatives.”
Under Achterstraat’s logic, which the government seems to accept, new apartment buildings in Mosman, Bondi Beach and Hunters Hill would make housing less expensive across this city of 5.3 million.
Therein must lie Minns’ political calculation: the benefit to the majority will overcome, electorally, resentment from voters whose million-dollar north shore and eastern suburbs gardens are overshadowed by new apartment blocks.
Unfortunately for Minns, and social equality, the political scales are rarely evenly balanced in such circumstances. Councils are expert development blockers, and may be able to overwhelm the housing coalition’s advocacy.
Minns and Planning Minister Paul Scully have the power to unilaterally change the rules through what is called a state environmental planning policy, which everyone in the industry calls a SEPP.
Meriton Apartments founder Harry Triguboff in March. James Alcock
For the moment, they promise consultation. “We will work with local government on final details,” Scully said on Friday.
It is unclear whether Scully’s department has the resources – having been plundered of staff by the private sector – to vet in a reasonable time projects that will now go through what is known as the state significant development pathway.
“The department will be freaking out,” one planning expert said. “This is going to create a tsunami of applications for the department.”
Right now, the plan is just a plan. Realised, it would reshape the city, and make Minns a hero of Triguboff and people willing to buy his apartments.
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