‘Magical Thinking’ in Inner West Council Housing Planning Changes

The Inner West Council wants developers to build higher and bulkier than Premier Chris Minns and the developer lobby have proposed.  

Minns has proposed 6-8 storey development around railway stations to solve the housing crisis, but on Tuesday night the Inner West Council decided on the basis of secret feasibility studies that this is not ‘commercially viable’ for developers in the Inner West.  

In moving for the uplift, Labor Councillor Jessica D’Arienzo claimed that ‘planning that genuinely addresses the housing crisis while maintaining the unique character and liveability of our areas’ requires ‘a certain magic’.

There appeared to be limits to the magic, however, as no claim was made that any of this extra housing will be ‘affordable’.

There will be very little opportunity for residents to have much of say in this boost for developers, judging by the decision hurried through the Inner West Council on Tuesday night without debate. 

Item 1 on the Council agenda was a report from its planners confessing that the changes to the Local Environment Plan to allow for 6-8 storey apartment buildings around train stations – the much touted Transport Oriented Development or TOD policy – would not be ready by Christmas as previously promised. It recommended Council ask the Minister for Planning Paul Scully for a further extension of time so planners could complete the revisions.

Part of their explanation for the delay was that feasibility studies done by consultants had concluded that six-storeys and an FSR of 2.5:1 would not entice developers to build, even with the 30% bonus for more ‘affordable’ housing. In addition, the planners reported that the mandatory requirement for 2% ‘affordable’ housing would also be a disincentive. 

The planners answer was to promise developers higher and bulkier buildings, and not just within 400 metres of Marrickville, Dulwich Hill and Ashfield stations, but within 800 metres. 

In accepting these expansions the Council promised the new LEP would be ready by its April meeting.  As for public consultation on the new LEP, there appears to be some confusion and it could amount to no more than two weeks in April.

The up-zonings in the new LEP would not be confined to areas around Marrickville, Dulwich Hill and Ashfield heavy rail stations but cover the whole of the Inner West Local Government Area.

‘Unlike other Councils we are completing rezonings across all parts of our municipality not just the locations required by the Government,’ the Labor Mayor Darcy Byrne said in a media release. 

‘In many locations the 6-storey development being proposed by the state government simply won’t result in new homes being delivered and we will need to go higher.’

The Greens, who are the minority on Council, first saw the Labor motion at 8.00 p.m. when they were introduced by Councillor D’Arienzo and seconded by Cr Byrne.  Greens Councillor Andrew Blake asked if the motion could be considered and voted on later in the meeting so that Councillors could digest and respond to a ‘complex’ motion. This was refused. 

Greens Councillor Liz Atkins asked if Councillors and the public could see the feasibility studies justifying the enlargements, but was told by Council’s director of planning that they were ‘commercial in confidence’. 

The Council motion argued that ‘small lot sizes and high land values in the Inner West mean that higher densities will be required to make amalgamation and development of these sites commercially viable.’

The changes being mooted may well lead to more development, but it will not lead to more affordable housing, according to ABC Alan Kohler economics commentator , because ‘apartments cost more to build and therefore cost more’.

‘You heard right,’ Kohler wrote in New Daily  in October, ‘apartments are dearer than houses, especially existing houses, but also new ones. Developer Max Shifman told me that a developer needs to sell apartments for at least $14,000 per square metre while a house sells for about $4000 per square metre.

‘As Shifman put it, anything needing a crane is a whole different proposition, in terms of building materials, regulations, insurance and unionisation, and the cost of building a block of apartments has increased by about 40 per cent since the pandemic.

‘That $14,000 price per square metre translates into $650,000 for a small one-bedroom apartment, $1 million for a two-bedroom apartment of 70 square metres and about $1.5 million for a reasonably sized three-bedroom “family” apartment or more. These are not “affordable” dwellings.’

Kohler warns that bunching new high-rise developments around railway stations will lead to congestion and a deterioration of the quality of life. 

Kohler and Shifman believe the solution to the housing affordability crisis lies in developing 2-4 storey housing in middle ring suburbs and in tax breaks for new housing. Kohler also believes that a major boost to public housing is part of the solution for affordability ,but he doesn’t expect governments to embrace that solution. 

After the meeting the Greens Councillors decided to accentuate the positive in the Council decision. Their media release emphasised that ‘place-based planning using Council’s localised expertise’ will deliver better planning than ‘the one size fits all approach’ of the state government. They endorsed ‘the accelerated LEP process’ which they believed would not ‘sacrifice community consultation’. The only critical note was over the feasibility studies from unnamed consultants favouring bigger developments, saying it was ‘important more detailed information be provided to Councillors’ if not residents.

You can see the Council report on increasing heights and floor space (on pages 28-38) here.

Hall Greenland is a former chair of Leichhardt Council planning committee and a member of the Greens