Private land development in the ACT has been attacked by both ACT Government officials and a commissioner of the Industry Commission.
The commissioner said it was not competitive enough because there were only three developers and officials said it made housing less affordable.
The commissioner also said that the push for medium-density housing did not always enlarge housing choices, but removed the choice already made by existing residents.
The Industry Commission has been inquiring into the efficiency of cities. The ACT Government was giving its response to an interim Industry Commission report before Commissioners Banks and Rolfe, a transcript of which was made available last week.
The then acting Chief Planner and the assistant secretary of land development, Hans Somer, told the inquiry that the ACT Government thought hat not all of its objectives had been achieved through the private sector.
“”Not all the people who the Government believes should have been in a position to buy houses have in fact been able to,” he said.
Joint ventures had enabled prices of land-and-house packages to be pegged.
The Government thought that some of the profit made by the developer could have been retained by the Government as the owner of the land in the first instance.
But he rejected the possibility suggested by Mr Banks that the ACT Government viewed private development as a disaster.
The first assistant secretary of the land division, Peter Guild, said he thought that given there were only three developers, “”they have been fairly competitive”.
Mrs Rolfe said, “”You would be better served if you had more than three, I suppose, but you haven’t got the volume. . . . It is very difficult to see that three people is enough.”
Mr Somer: I think, commissioner, you need to be at the auction rooms to see the interest and the bidding that takes place.
Mrs Rolfe: I hear you and I have seen some auctions quite other than what they seem.
At that the hearing wound up.
Earlier Mr Banks said that one view among ACT was that there were monopoly profits being made which, if the Government was involved, it would be charging a normal profit and that would make housing more affordable.
The Secretary of the Chief Minister’s Department, Bill Harris, replied, “”Certainly among some of the people who would have contributed to the formulation of that government policy that view would be held.”
Mr Harris acknowledged that transaction costs, such as stamp duty, agents’ and conveyancing fees, were preventing people from moving to housing of their choice and preventing some first-home buyers from entering the market.
Mrs Rolfe said the ACT was no different from other governments around Australia that erect financial barriers to mobility while professing and interest in housing and location choice for constituents.
“”It is one of those classic cases of bifurcated policy,” she said.
On Government providing choice through medium density, Mrs Rolfe said, “”The existing residents don’t see it as enlarging choice, they see it as removing their choice. They have chosen and they see their neighbourhood being removed from them and their facilities being effectively _ in the Watson case _ downgraded.”
She said the Watson people had put their case to the commission very cogently. It was typical of what happened _ Canberra was not unique _ the planners proposed and the people objected.
Mr Guild said that there had been increased demand for medium density.
The Watson Community Association said that increases in the number of medium-density houses built did not indicate an increased demand. The Government land monopoly and planners set the number of medium density sites, not demand.
The association said the aim of leasehold was to ensure the community got the benefit for increased value by changing use, not developers. The ACT Government was forgoing perhaps millions of dollars a year in revenue by ineffective administration of the leasehold system.
“”The ad-hoc nature of the ACT betterment-tax system increases the potential for “”deals” to be made that are not in the public interest,” it said.
The same went for joint ventures between developers and the government sector.
Higher developer profits from speculative land rezoning in inner Canberra would distort urban settlement in Canberra. Those profits should be captured for the public revenue.
Population aging did not mean people wanted “”more appropriate” medium density housing. The Government should not encourage housing variety for its own sake. Lack of variety did not mean a lack of consumer choice; it might also mean they all wanted the same thing.
As people got older they did not want to move. Many wanted to retire where they were because it had taken many years to get their houses how they wanted. Any demand for smaller houses could at least partly be explained by the fact that larger houses were now too costly, not that they were not wanted.
“”Urban renewal had raised strong public concerns at the planning process being fast-tracked, disquiet at the potential for conflict of interest and potential corruption and excessive developer profits,” the association said. “”There is a widespread community cynicism that public consultation on urban consolidation is a mere tokenism.”
Speculative rezoning in North Canberra had led to higher developer profits. By the time distortions had been taken out, it would be seen that urban in-fill was more expensive than greenfields development inthe short term and the long-term.
“”Some argue that the ACT Planning Authority stands for prosecutor, judge and jury in the planning process,” it said.