b'JULY 2020Housing Affordability and Affordable Housing LeviesAny politician who falls into the trap of To achieve that [materially lower housingasking a credible economist for a solutionprices]political leaders will have to explain to housing affordability is likely to be hitto communities why population growth is likely to occur, why we need to accommodate it, and with a cold dose of economic reality.what that involves. This is a fundamental point. NSW needs a plan for growth. 12Dr Peter Abelson found that Sydney housing pricesStevens provided an independent assessment, have averaged over 40% more than other Australianand DPIE, Greater Sydney Commission (GSC), capital city for several decades, as: NSW Treasury and the Department of Premier andSydney is a coastal city with limited urban land;Cabinet were central to his analysis.it is the physical centre of a growing economyThe length of time taken for re-zoning and with a growing population; it has high amenity;development application approvals was identified as and it attracts high income earners whoa significant cost burden, and it is here that cutting compete for access to high amenity and urban space. 10 red tape can really assist. Stevens noted that while the GSC had set housing targets, there was no When former Reserve Bank Governor Glenn Stevenssanctions on Councils or other agencies when those AC was asked by Premier Berejiklian in 2017 totargets were not met. independently report on housing affordability, heThe GSC may have been implementing the concluded that NSW planning system slowness andBerejiklian governments hands-off Councils inelastic supply in response to demand were major contributors to high Sydney housing prices. 11 response to the backlash to Bairds council amalgamation push. The emphasis was rebuilding Stevens proposed solutions: political and social capital, rather than deliveringIncrease land supply for new housing housing supply and improving housing affordability. Reduce minimum lot sizes and minimumFinally, Stevens supported tax system amendments apartment sizes to encourage institutional investment in rentalReduce rezoning and development approvalaccommodation, and suggested taxing foreign timeframes investors, which has been implemented.Apply sanctions to Councils that do not meetThe primary driver is government failure to housing targets ensure sufficient housing supply to meet demand,Encourage large private institutions (likeparticularly in attractive, high amenity urban Institutional Superannuation funds) to invest onlocations such as along new infrastructure corridors, build to rent where demand is putting upward pressure onStop gold plating infrastructure beyonddwelling prices. minimum requirements, which is unnecessarilyThe planning system has not kept pace with pushing up contribution rates.demand from a growing population, although He argued that the governments failure tothere have been recent gains with the Planning communicate the importance of economic andSystem Acceleration Programs focus on getting population growth fostered anti-growth sentimentout development approvals for new projects in key within the community, which contributed to highermetropolitan locations.housing costs: 1210 Abelson, P., Op.cit., p91.11 Stevens, G., Housing Affordability: Report to the Premier, 22 May, 2017.12 Ibid., p3.'