‘Broken planning system’ led to housing crisis

Source: Business News

Developers including Paul Blackburne have spoken out about the state’s planning system in light of low housing supply.

Developers say the state’s planning system played a major role in the current housing shortage, with approval times blowing out by up to seven years in some cases.

Speaking at an Urban Development Institute of Australia WA event today, Blackburne managing director Paul Blackburne commended the government on its planning reforms, but said the system was broken for many years before.

“We’re talking about decades of a broken planning system, there are thousands of sites in Perth that would be perfect for downsizing types of product, and people aren’t investing in them because it’s just too risky,” he said.

“People aren’t investing in property development, there’s such little investment by business and investors in the property development sector, there’s almost nothing going into it because the returns just are so marginal and the risk so high that people don’t bother.

Mr Blackburne made his comments in light of a report from research group from downsizer.com, which revealed the extent of the downsizer market in Perth.

The research showed there were 190,000 potential downsizers, or baby boomers looking to move out of their home, in WA, with that number growing by 25,000 in the past two years.

Downsizer.com economist Michael Blythe said there were “limited opportunities to find an appropriate place to downsize into, in the midst of Perth’s housing supply crisis”.

Blackburne, which is behind the $380 million One Subiaco development, $380 The Grove apartments and $75 million East Village project in Karrinyup, has sold about $700 million of apartments mostly to downsizers this year.

“It could be double that, and it’s not a lack of desire … there’s just not the supply there,” he said.

“That comes from a broken planning system, although its heading in the right direction, it’s still miles off.”

The state government is in the midst of overhauling the planning system, with several changes aimed at giving more decision-making powers the state government and industry experts.

“When we look back on this period it’ll be seen as a time of great leadership by state government in terms of fixing so many of the problems in the planning system that flow on to other problems for West Australians,” Mr Blackburne told Business News after the event.

Providence Lifestyle Group founder John Wood spoke about the frustrations around getting projects approved that don’t fit conventional planning frameworks.

His company, formerly National Lifestyle Villages, is behind a 250-home lifestyle village in Piara Waters, which utiilses the land lease system, whereby people own their homes but rent the land.

“We started [building] it two years ago, but it took seven years to get through the planning process,” he said.

“That’s what is so frustrating, that to be able to deliver new product to the market, it’s really challenging.”

Mr Wood added that there was no planning policy in WA to support land lease, despite Providence having done it for 20 years.

He said there should be planning frameworks in place to support downsizers, given it was such a significant and growing market segment.

UDIA WA executive director strategy and policy Sarah Macaulay said there needed to be more affordable housing options in areas downsizers wanted to move.

“The development industry needs to be supported in order to deliver more medium and high density housing to the market, so that we can meet the needs of downsizers in a range of areas across Perth,” she said.