Land Affordability: The Local Government Perspective

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Land AffordabilityThe 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
  States 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 states 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?

• 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,

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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