NSW Labor's $2.2 billion housing plan unclear: REINSW

The first Budget by NSW Labor highlighted the critical need for housing in New South Wales, with a $2.2 billion Housing and Infrastructure Plan set out.

Minister for Planning and Public Spaces Paul Scully said housing affordability and availability is the biggest single pressure facing the people of New South Wales, with mortgage payments or rent the largest expense for most households.

"The Minns Labor Government is today outlining significant long-term reform in NSW to begin the task of confronting the housing crisis," Scully said.

The NSW Government’s Housing and Infrastructure Plan includes:

• $1.5 billion to build infrastructure such as roads, parks, hospitals and schools to support the construction of new homes across Sydney, the Lower Hunter, Central Coast and the Illawarra.

• $400 million reserved in Restart NSW for the new Housing Infrastructure Fund, to deliver infrastructure that will increase housing supply across the State.

• $300 million for Landcom to accelerate the construction of thousands of new homes, with 30 per cent affordable housing.

The Real Estate Institute of NSW (REINSW) says however it is unclear how new supply will actually be delivered, and the Government’s pursuit of its so-called rental reforms are a continuation of the “data-ignorant” approach that has exacerbated the rental crisis.

REINSW CEO Tim McKibbin said it's clear the Government recognises the critical housing shortage in the state, including social and affordable housing, and the need for action on new housing construction.

“However, the glaring omission is the detail on how this will be achieved. The $224 million for the Essential Housing Package and the minimal commitment of a few thousand public housing dwellings over the long-term won’t scratch the surface in the context of the enormity of the housing crisis. Tangible and significant supply outcomes are needed but they have not been forthcoming," McKibbin said.

He said that to encourage new housing supply, developers need to be incentivised to proceed with projects, especially with the challenges of rising materials and labour costs. 

“Tax reform is the clear opportunity to improve new project feasibility," McKibbin said.

"Holding local Governments to account to meet the required new housing targets in their areas is another opportunity. We must also take a new evidence-based approach to addressing the rental crisis. Ignoring the data has not worked. It has led to an environment in which investment in residential property is discouraged.

“It’s important to remember that the provision of social and affordable housing is the Government’s job. It’s not the job of private investors.

“The impact of tenant-centric legislation has been to vastly shrink the rental pool. More investors are selling their properties and as such, tenants have less choice. Regrettably, this Budget appears to commit the Government to the existing data-ignorant approach which has made the rental crisis so much worse."

McKibbin said we need to "“flip the script and begin to encourage investors to make properties available for rent."

"This demands a reconsideration of current proposed reforms which seek to divide the interests of tenants and landlords. Ideally, the tenant-landlord relationship should be symbiotic, based on fairness and respect, yet Government’s reforms promote an adversarial environment in which disputes are encouraged, which harms everyone involved."McKibbin said the REINSW is ready to work with the Government and all stakeholders on an evidence-based approach to the housing crisis. 

“It’s worth noting that if people are encouraged to invest in residential property, this will improve feasibility for new development projects."