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Most states have suffered from a housing supply shortage due to not enough land being available or ‘build ready’ for those wishing to purchase a new home and build in a new area.
In the last 20 years much of the focus on planning reforms have related to housing approvals and speeding these up with state codes, private building approvals and the like. However, the blockage that now continues to slow down housing supply is access to ‘shovel ready’ land.
Reform in this area has proven more difficult and the process, when combined with rezoning, remains a decade long exercise. In the current regulatory framework it is simply impossible to bring land to market quickly.
This is generally due to the two-step process to ensure land is suitable for residential construction to occur (rezoning) and then the statutory processes to design and approve new allotments and physically construct them with the required utilities and services (subdivision).
Land is firstly designated for urban development. Secondly land is rezoned for a particular density of residential development. Finally, owners and developers who are subdividing their land are required to obtain a number of approvals for the subdivision design, construction and registration of the newly created residential lots.
This process can take anywhere between 2-10 years and underpins the delivery of “shovel ready” land to market. Delays in this process slow down the supply of land for new housing. As land supplies become scarce, housing affordability is negatively affected.
In the context of house prices, land continues to be the greater component of the sale price and is also subject to federal, state and local taxes which further inflate the price.
As land simply cannot be brought to market quickly and affordably based on the existing approval processes, more must be done to allow better and more efficient subdivision processes to be implemented and lots to be brought to market in a more timely manner and reduce holding costs for residential developers.
In most states and territories there are 4 stages in the land supply pipeline that relate to the subdivision process:
Both Stage 2 and 3 present opportunities for efficiencies to be created, due to the significant technical elements involved in their assessment and the significant level of costs associated with duplication of reports and studies following the rezoning stages.
These decisions are much more straightforward and could be considered for improving the timeliness of the subdivision process.
Policy endorsed by HIA National Policy Congress: 25 May 2017. Re-endorsed with amendments April 2022.
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