A joint WA property industry submission states that an overhaul of the way developers are charged for their share of local government and community infrastructure must include an independent umpire, greater clarity about costs and a panel of experts to support those charged with managing landowners’ money.
The Urban Development Institute of Australia (UDIA WA), the Property Council of Australia WA and Real Estate Institute of Western Australia (REIWA) have joined forces to inform how developer contributions can be better managed in their response to the draft State Planning Policy 3.6: Infrastructure Contributions.
The trio said they were pleased the State Government was listening to their concerns.
Getting it right is important, the industry says, because the cost of new infrastructure is ultimately passed on to new homebuyers.
UDIA WA Chief Executive, Tanya Steinbeck, Property Council WA Executive Director, Sandra Brewer, and REIWA President, Damian Collins, equally welcomed the draft policy but stressed the need for clarity about the rules, compliance and enforcement, equity between developer and local government contributions and the necessity for yet-to-be-approved developer contribution schemes to be aligned with the new policy.
UDIA WA’s Ms Steinbeck said there were millions of dollars in unspent developer contribution funds sitting in local government bank accounts that should be spent on required community infrastructure.
“When a homebuyer pays for a house and land package, there’s a commitment by the council and the developer to provide community infrastructure — it is included in the price that has been paid,” Ms Steinbeck said.
“We are delighted that the government is looking to address these issues, but we want to be sure the new policy is clear, that there is transparency about who contributes the funds, how costs are calculated and that there are safeguards to ensure homeowners don’t pay twice.”
Property Council WA’s Ms Brewer explained that the industry wanted more detail about how the new rules would be enforced.
“We’d like the WA Planning Commission to establish a sub-committee or an Ombudsman to investigate complaints, give independent advice to State and local governments and to have the power to mandate compliance or extinguish the scheme,” Ms Brewer said.
REIWA’s Mr Collins added that it was important that there was a cap on per dwelling levies because lifting caps would unfairly burden new homebuyers.
“Councils need to carefully consider the infrastructure that’s needed,” Mr Collins said.
“So-called gold-plated infrastructure sought by some councils imposes a higher than necessary cost on buyers and, if it costs more to service, higher than necessary ongoing ratepayer costs.”
As well as seeking clarity about how the new policy will be enforced and asking for an independent umpire, the industry has requested the so-called need-and-nexus test be applied to ensure local governments are also making a fair contribution.
It wants time limits of no more than 10 years on the schemes, support mechanisms to ensure schemes are being reviewed and audited properly each year and specific guidelines to ensure that local governments cannot inflate contingency costs.