<a href="https://www.apartments.com.au/developers/capital-corporation">Capital Corporation</a> has announced that its <a href="https://www.apartments.com.au/new-townhouses/lovedale-farm-1054-1184-wine-country-drive-lovedale-nsw-2325">Lovedale Farm</a> residential, resort and golf project has secured $24.6 million in sales in just three weeks since the opening of its display home, underscoring the appetite for premium lifestyle property in the Hunter Valley countryside.

The sales milestone has been driven by a diverse mix of buyers, including owner-occupiers and investors from Sydney, Newcastle and the local Hunter region, purchasing both land-only lots and house and land packages across the development.

<img alt="Lovedale" data-entity-type="file" data-entity-uuid="e173edc9-e60e-4f19-a060-9dc4421a3233" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/LovedaleFarm_20250215-1.jpg?VersionId=1LY6CvOaD.Dzrt8tWpWxXtPyfchixNIo" />

&nbsp;

The result builds on the momentum generated at the display home opening on 22 March, which attracted more than 460 attendees.

With house and land pricing from $1.14 million, Lovedale Farm continues to attract strong interest from buyers seeking a premium lifestyle offering at a compelling price point. The development’s vision, a championship golf course, future epicurean village and access to the Hunter Valley’s celebrated wine country, has resonated with a broad buyer profile, from first-time investors to those looking to make the move and call the Hunter Valley home.

<img alt="Lovedale Farm records $21.4 million in sales in three weeks" data-entity-type="file" data-entity-uuid="b358e789-e1eb-40ed-8105-ed5c8297136f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/20260321LovedaleFarmDisplayHomeOpening--6.jpg?VersionId=6GUO8TNnxuELONrsM6n9imDB6oc82Bor" />

Jim Hunter, Managing Director of Capital Corporation said the response since opening the display home has been encouraging.

"To reach $24.6 million in sales in just three weeks speaks to the genuine demand for a lifestyle community of this calibre in the Hunter Valley," Hunter says.

"We’re seeing buyers from across the region and beyond, including investors who recognise the long-term value, and owner-occupiers who simply want to live somewhere truly special.

“Lovedale Farm is two decades in the making, and the market’s response is everything we hoped for. We’re excited to see these first buyers become part of the Lovedale Farm story from the very beginning."

<img alt="Lovedale" data-entity-type="file" data-entity-uuid="54d985cf-2ac2-400b-ac02-4401f3421ac7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/20260321LovedaleFarmDisplayHomeOpening--5.jpg?VersionId=3866bPoqpLZsm.3ACg9EafAr1W3miC_f" />

&nbsp;

Spanning 240 hectares on Wine Country Drive in <a href="https://www.apartments.com.au/developments/lovedale-nsw-2325">Lovedale</a>, the $1 billion development is expected to deliver around 1,250 jobs during construction and inject more than $300 million into the local economy. The first 200 homes and championship 18-hole golf course are anticipated for completion in late 2027.

Capital Corporation has also lodged development plans for the Lovedale Farm clubhouse, set to become a vibrant hub for residents and the wider Hunter Valley community. Further releases are planned for later this year.

[smartcode_project_cta:default project_id=14476]

Joel Robinson

Lovedale Farm display home opening triggers $24.6 million in sales in three weeks

Prominent Malaysian developer <a href="https://www.apartments.com.au/developers/osk-property">OSK Property</a> has unveiled <a href="https://www.apartments.com.au/new-apartments/aura-at-melbourne-square-7-hoff-boulevard-southbank-vic-3006">Aura</a>, the next stage of its $3.5 billion Melbourne Square precinct in Southbank, continuing its push into wellness-led, amenity-rich apartment living.

The $800 million tower, planned for 7 Hoff Boulevard, will rise 67 storeys and deliver 673 apartments, with COX Architecture drawing on both Japanese design principles and Australia’s natural landscape to shape the building’s identity. A rectangular grid aesthetic defines the building’s exterior, with COX drawing design cues from New York high-rises and Tokyo’s skyline.

Aura builds on a growing trend in high-density living, where wellness is no longer an add-on but central to the product. The development is structured around four key pillars, combining calm, minimalist residences with layered communal spaces, landscaped gardens, and a suite of wellness amenities designed to support both physical and mental wellbeing.

[smartcode_project:default project_id=151921 project_image_fid=367465]

At the core of the project is what OSK describes as a vertical wellness ecosystem, a multi-level approach to amenity that integrates health, lifestyle, and social spaces throughout the building rather than confining them to a single level.

The main resident hub, the Aura Club on level seven, will include a pool, cold plunge, spa, gym, Pilates and yoga studios, alongside more lifestyle-driven inclusions like a golf simulator, music rooms, library, and work-from-home spaces. Above, a series of higher-level amenity zones, including the Meridian Club and Cumulus Club, introduce more refined, social and retreat-style environments, with private dining, lounges, and premium wellness spaces positioned to take advantage of city views.

[smartcode_project:default project_id=151921 project_image_fid=367467]

The residences themselves will largely include balconies, a key design move in a market increasingly focused on natural light, airflow, and connection to the outdoors. Views will extend across the CBD, the Arts Precinct, Royal Botanic Gardens, and beyond.

Aura also introduces approximately 1,600 sqm of retail across the lower levels, further activating the Melbourne Square precinct, which already includes Kennedy Park, a Woolworths, childcare, and a growing mix of hospitality operators.

[smartcode_project:default project_id=151921 project_image_fid=367474]

“Aura stands tall as an exemplar of holistic wellness – its focus on social, physical and mental health culminate in a building that is calming, restorative and relaxing, where residents will have their own sanctuary within the well-connected and sought-after <a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>," says&nbsp;OSK Property CEO Chong Boon Woon.

“We have been very encouraged by the market’s response to the BLVD offering, and we know there is a strong demand for the level of amenity, service and design that the Melbourne Square precinct is known for.

“Complemented by work-from-home lounges for professionals, family friendly outdoor garden spaces, and state-of-the-art fitness and wellness facilities, Aura will continue our focus on maximising physical, emotional, and mental wellbeing,” he said.&nbsp;

[smartcode_project:default project_id=151921 project_image_fid=367475]

The project follows the strong performance of BLVD, which is now around 80 per cent sold, and reinforces OSK Property’s long-term commitment to Melbourne Square as a fully integrated, mixed-use precinct.

Construction is expected to commence in late 2026.

[smartcode_project_cta:default project_id=151921]

OSK unveils AURA, the latest stage in Southbank's $3.5 billion Melbourne Square precinct

National developer Time &amp; Place appears to have settled on a design for its long-anticipated Potts Point project.

After several years of back and forth with local council and the NSW Government, the developer, which has spent close to a decade targeting the former The Chimes site on Macleay Street, has now progressed its plans.

Following a concept design submission last year by SJB, Time &amp; Place has lodged a full State Significant Development Application with the NSW Government, this time for a scheme designed by Kerry Hill Architects.

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="504d2a27-d65f-4227-8189-1e35e3376e62" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.38.24%E2%80%AFAM.png?VersionId=_XqFKATYHF30KnVByPxhaI9UBzmkmfn7" />

The 16-storey proposal includes 44 apartments, 21 of which will be build-to-sell. These will comprise 19 three-bedroom apartments and two four-bedroom penthouses.

More than 50 per cent of the development will be dedicated to affordable housing, with 23 studio apartments to be delivered in line with the NSW Government’s Housing SEPP.

Kerry Hill Architects said the proposal is driven by a strong response to place.

“Our proposal for a new residential building for Potts Point in Sydney is driven by a deep consideration of place,” the practice said in its submission.

“This operates on multiple levels, including a landscape approach that reinstates endemic flora of the Sydney peninsula and provides a ground-floor garden for residents, reconnecting the site to its pre-European history. A brick podium further strengthens this relationship to context, integrating planting and fine bronze detailing that references the predominant material language of Macleay Street.”

The three-level podium will be topped by a communal resident space, featuring a covered pool designed to receive direct afternoon sun in winter, a neighbouring reflection pool, dining and event areas oriented to maximise sunset views, and an outdoor exercise zone.

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="8d3eedc1-babb-44a3-bd96-d8a42f3adf1f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.37.48%E2%80%AFAM.png?VersionId=Ii7.4dvqNatu5GQi6bhqNjAswrMB998." />

The design also incorporates highly crafted shopfronts and a clearly defined residential entry to activate the street. Juliette balconies to the podium residences will provide passive surveillance and a strong sense of habitation.

Above, the larger apartments are housed within a light-coloured masonry and bronze tower.

“The tower steps back in a series of gently curved volumes that reference the rich Art Deco context of Macleay Street,” the architects said. “Carefully calibrated vertical fins frame the views while providing privacy and a sense of refuge.”

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="6fab60f4-3140-4469-b47a-48c781e0a30b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.28.44%E2%80%AFAM.png?VersionId=e5XxrM3kzdASdKlcIACHAHbOSZhSKC9O" />

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in South Melbourne.

The developer has approval for The Burke, a mixed-use project in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>&nbsp;being delivered in partnership with Woolworths. The 60 apartments, positioned above a new Woolworths supermarket, are expected to launch in the coming months. Time &amp; Place is also progressing plans for the redevelopment of&nbsp;<a href="https://www.apartments.com.au/developments/northcote-vic-3070">Northcote</a>&nbsp;Plaza, and have recently submitted plans for a <a href="https://www.apartments.com.au/news/vic/time-place-unveils-plans-22-storey-south-melbourne-tower">22-storey tower</a>, another in South Melbourne.

In&nbsp;<a href="https://www.apartments.com.au/developments/sydney-nsw">Sydney</a>, the developer has two projects in Manly: Two Tides, which is currently under construction, and an ultra high-end building on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach. It is also continuing to work through the redevelopment of The Chimes building on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as Marlborough House, the redevelopment of the original David Jones warehouse building in&nbsp;<a href="https://www.apartments.com.au/developments/surry-hills-nsw-2010">Surry Hills</a>.

First look: Time & Place settles on design for The Chimes, Potts Point redevelopment

<a href="https://www.apartments.com.au/developers/develotek">Develotek</a> is joining the likes of TOGA, Deicorp, and One Global Capital, betting on a boom in Five Dock ahead of the 2032 mooted opening of the Five Dock Metro Station.

Develotek, which is currently developing Bianca on the Drummoyne waterfront and has plans approved for a tower in Chatswood, has filed a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/79-81-queens-road-five-dock-nsw-2046">two-building project in the evolving Kings Bay precinct</a>.

The buildings, one more boutique just five storeys and the other 26 storeys, will rise from an 3,158 sqm site across&nbsp;79–81 Queens Road and 2–8 Spencer Street, will home 134 one-, two-, and three-bedroom apartments, above ground-floor retail and five basement levels of parking.

A key component of the proposal is the inclusion of 15 per cent of residential floor space as in-fill affordable housing, unlocking additional height and density under the Housing SEPP.

<img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="3ee31bf7-75ba-4bc5-b190-49885193219f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium_2.png?VersionId=730UbrduuwK3C1sO28RHjiLPUPqXqjkh" />

Designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a>, the scheme adopts a podium-and-tower configuration, with a five-storey street wall along Queens Road transitioning to a 26-storey tower set deeper into the site. The ground plane prioritises activation and permeability, with retail frontages and a new through-site link connecting Queens Road to Spencer Street.

At the upper levels, the tower façade has been conceived using a modular system to support prefabrication and reduce construction waste, while improving build efficiency. The splayed form draws on the geometry of surrounding industrial rooftops, reinterpreting the area’s heritage in a contemporary expression while also helping to reduce solar heat gain to east and west-facing apartments.

“This project aspires to transform a former industrial site into a connected, resilient and people-focused urban community, grounded in Country, shaped by history, and designed to enrich everyday life within the evolving Kings Bay Precinct,” said John Walsh, Principal at Plus Studio.

The proposal reflects the broader transformation of the Kings Bay Precinct under the Parramatta Road Corridor Urban Transformation Strategy, marking a shift from its industrial past to a higher-density, mixed-use urban neighbourhood.

<img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="abde734c-1e31-4a97-a1d2-fa9bcf31c380" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/building%20podium.png?VersionId=fNUupP6u146yEytQT31kKVRxwtACgPpP" />

Develotek is emerging as an active participant in the state’s affordable housing-led uplift pathway. The developer recently secured approval for a 34-storey mixed-use tower in Chatswood, where it similarly leveraged the in-fill affordable housing provisions to increase scale and deliver a 101-unit scheme with dedicated affordable apartments.

Their entry into Five Dock places them alongside a growing list of developers targeting the suburb ahead of its anticipated transport uplift, with Sydney Metro set to extend into the area. Major players including TOGA, Deicorp, and One Global Capital are all progressing large-scale precinct-style developments nearby, collectively reshaping the low-rise industrial fabric into a higher-density mixed-use corridor.

The Five Dock site sits within the Kings Bay Precinct, a key renewal area under the Parramatta Road Corridor Urban Transformation Strategy, where planning controls support significant uplift tied to affordable housing delivery. The consolidated 3,158 sqm site is currently occupied by low-rise industrial uses, including warehouses and vehicle workshops, earmarked for transition.

First Look: Develotek joins in Five Dock apartment boom

Ascot’s Racecourse Road continues to be a hive of activity for Brisbane developers.

Following Fortis and GRAYA, which are both preparing new projects along the key strip connecting Kingsford Smith Drive and Eagle Farm Racecourse, local developer <a href="https://www.apartments.com.au/developers/skyhold">Skyhold</a> is the latest to lodge plans for its own development.

The group is proposing One One Two Residences, a boutique project comprising just seven apartments, named after its address at 112 Racecourse Road.

The proposal outlines a five-storey building on an 810 sqm site. The built form slightly exceeds the four-storey expectation under the neighbourhood plan, aligning instead with the emerging character of the strip. As the planning report notes, “the locality is characterised by a transition toward medium-rise residential development, with a number of recent developments… above the stipulated height limits.”

<img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="ec577631-8c51-4163-960e-e7b3a77d655b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot.png?VersionId=iAzQ46D4Uu1UqiS0mVnlcy9jeFKBpJIj" />

Designed by 111 with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/paul-bangay-garden-design">Paul Bangay Studio</a>, the scheme adopts a layered architectural approach with strong articulation and a subtropical response. Deep balconies, integrated planters, and a mix of masonry and textured finishes define the façade, while upper-level setbacks reduce perceived bulk. The architectural statement describes “a series of horizontally expressed layers, defined by deep balconies and a consistent robust material palette,” aimed at delivering a refined streetscape presence.

Apartments are configured as large-format residences, including multiple three-bedroom layouts and a full-floor penthouse, supported by ground-level parking. A rooftop terrace will provide communal amenities including a pool and landscaped recreation areas. The design prioritises privacy, natural ventilation, and greenery, with planting integrated across all levels to soften the building form and contribute to the public realm.

<img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="1e1219bd-b45a-4d7f-bbc7-7207d7b2fc94" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot%20entry.png?VersionId=JIoUOLMgQ5xWpEF0etEI3ffIoIVjD7gO" />

The proposal sits within the Racecourse Road precinct, a key mixed-use spine in Ascot that continues to attract renewed development interest.

Later this year national developer Fortis will launch its own boutique development, which, pending council approvals, will be 16 apartments designed by Koichi Takada Architects, just down the street.

“Racecourse Road is going through a massive revitalisation and we’re proud to be a part of that transformation,” said Fortis's QLD General Manager, Dan Boman.

Nearby, GRAYA is advancing its larger-scale The Gallery, a mixed-use shop-top housing project designed to act as a “catalytic project for Racecourse Road.”

First Look: Racecourse Road, Hamilton revitalization to continue as Skyhold joins the party

Councils

ABS has today released the June data for housing approvals which shows that in NSW, the planning system approved 12.7% in less in June than was approved in May. The Council shut down for elections has started.

Urban Taskforce has warned the NSW Government that they faced a real risk that Councils would ease off on approvals in the lead up to what was to be the September elections.&nbsp; Today&rsquo;s data shows that the Government&rsquo;s light touch on Councils has resulted in precisely that.&nbsp; Worse, the Council elections have now been postponed till December and unless someone holds a blow-torch to the Councils and approval bodies, approvals will drop off further.&nbsp;

[smartcode_project:default project_id=31751]

Even prior to the lockdown, the productivity of the planning system had dropped off. Our economy cannot recover with this drop off in performance.&nbsp; Planning reform and approvals now will deliver a pipeline of work for when vaccinations allow our economy to fully re-open.&nbsp; There is an opportunity to catch up &ndash; but it seems that the planning system has slowed up again.

Urban Taskforce calls on the Government to immediately implement the recommendation of the NSW Productivity Commission White Paper.&nbsp; The GSC has set housing targets.&nbsp; It is up to the NSW Government to ensure that Councils meet them.&nbsp; Targets need to be regularly monitored against performance.&nbsp; There can be no excuse for Councils refusing to accept the targets.&nbsp; LGA Housing Strategies must come with sanctions for those Councils that selfishly refuse to contribute to housing supply, resulting in rising new home prices inflicted on those least able to afford them.

[smartcode_project:default project_id=30049 project_image_fid=162884]

The data shows that NSW housing approvals reached their peak in 2015/16 2016/17 and 2017/18 at around 73,000 approvals each year. Then, in the lead up to the NSW State election (2018/19) approvals dropped off to 58,000 and stayed low in 2019/20 with only 48,000, despite &ldquo;fast track&rdquo; schemes and a flurry of DPIE activity.

The total approvals have risen across all of NSW to 59,000 and this is welcome &ndash; but it remains well short of what is needed.&nbsp; The data reveals the problem.&nbsp; Apartment approvals across NSW have dropped significantly (most of these in Greater Sydney) while new separated house approvals have remained relatively flat.

<img alt="" height="444" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/screen_shot_2021-08-07_at_2.19.12_am.png" width="1180" />

The table above, based on the ABS data, clearly shows that the price escalation is due to a drop off in housing approvals and this is flowing on to a drop off in housing supply.&nbsp;

Further, the time taken to navigate the NSW planning system, even after an approval has been granted, often takes years, adding to risk for the property development industry and additional costs for new home buyers.

The message went out to Councils in 2018 that the NSW Government was going to go soft on them after the Council amalgamation debacle.&nbsp; But the result has been a massive under supply of housing.&nbsp; This will only get worse unless Government can incentivise Councils to deliver an over-supply of new approvals.

Council elections have now been postponed till December and unless someone holds a blow-torch to the Councils and approval bodies, approvals will drop off further. 

max.kwok_55688

ABS housing approvals data spells out why housing prices are going through the roof

<html><body>
GUEST OBSERVATION
Housing in Australia is broken. Across the country, <a href="https://anglicare-ras.com/" target="_blank">only 2% of private rentals are affordable for a person on the minimum wage</a>. Less than 1% are affordable for a single person on the pension. There are 650,000 households who can’t afford housing at market rates in Australia right now and this figure is projected to reach <a href="https://cityfutures.be.unsw.edu.au/documents/522/Modelling_costs_of_housing_provision_FINAL.pdf" target="_blank">over a million by 2036</a>.
The abject failure to meet the housing needs of lower-income households is partially due to <a href="https://theconversation.com/australia-needs-to-reboot-affordable-housing-funding-not-scrap-it-72861" target="_blank">decades of underfunded social housing</a> by government. Since the 1960s, the proportion of public housing in Australia has almost <a href="https://www.propertyobserver.com.au/https://www.tandfonline.com/doi/abs/10.1080/08111149608551610" target="_blank">halved from 8% </a><a href="https://www.aihw.gov.au/reports/housing-assistance/housing-assistance-in-australia-2018/contents/social-housing-dwellings">to 4.6%</a> of total housing stock.
Scott Morrison’s newly re-elected government made no election statements relevant to social housing. That suggests this situation is unlikely to change soon.
Leaving it to the private sector
As governments have stepped away from directly delivering affordable housing, more emphasis has been placed on the private sector and market forces to deliver this social good. Internationally, policies like <a href="https://www.ahuri.edu.au/policy/ahuri-briefs/Understanding-inclusionary-zoning" target="_blank">inclusionary zoning</a> require developers to provide a portion of affordable housing in return for planning permission.
For example, in San Francisco inclusionary zoning has been in place since 1992. This policy has <a href="http://default.sfplanning.org/legislative_changes/inclusionary_affordable_requirements/Section_415_amendments_Case_Repost_adoption-042717_FINAL.pdf" target="_blank">generated 4,600 permanently affordable units since 2002</a>. Developers received no incentives in return for being required to deliver this housing.
<a href="https://www.churchilltrust.com.au/media/fellows/Hodyl_L_2014_Social_outcomes_in_hyper-dense_high-rise_residential_environments_1.pdf" target="_blank">In Vancouver</a>, developers wishing to build above a 3:1 plot ratio (for example, three storeys on 100% of the site, or six storeys on 50% of the site) in the CBD must provide social housing or other community amenities.
In contrast, the state of Victoria has very few regulations that encourage or enforce affordable housing or other community benefits in return for development permissions. The rezoning of Fisherman’s Bend for development is <a href="https://www.theage.com.au/national/victoria/lowend-buyers-shut-out-of-fishermans-bend-20141101-11fh5p" target="_blank">one particularly egregious example</a> in Melbourne.
Victoria’s plan for negotiations
In 2018, the Victorian government took some initial steps towards involving private developers in providing affordable housing. It <a href="https://www.planning.vic.gov.au/policy-and-strategy/affordable-housing" target="_blank">changed the Planning and Environment Act 1987</a> to designate affordable housing as a valid planning objective and created a mechanism for negotiated affordable housing agreements.
Local councils can now ask for affordable housing as part of planning approval processes. While these negotiations will inevitably generate a wide range of outcomes through a variety of arrangements, one likely permutation is shown below.
The local council and developer will enter into a negotiation and decide on a “reasonable” affordable housing contribution. In this instance, the developer will sell, “gift” or lease a number of units to a not-for-profit housing provider, which will manage the units and ensure eligible, low-income households occupy the home.
<a href="https://images.theconversation.com/files/274240/original/file-20190514-60560-1xpbo4n.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/274240/original/file-20190514-60560-1xpbo4n.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
A negotiated path to delivering affordable housing. Author provided
The difference between many international examples and Victoria is that these negotiations are voluntary. The argument is that voluntary negotiations avoid a one-size-fits-all solution and allows for flexibility and creativity in negotiations.
On the other hand, <a href="https://rsa.tandfonline.com/doi/abs/10.1080/02697459.2015.1008793#.XOd5qogzaUk" target="_blank">international research</a> suggests voluntary programs often generate uncertainty and inequitable outcomes. They tend to generate less affordable housing than mandated systems. And they do so in <a href="https://www.lincolninst.edu/sites/default/files/pubfiles/thaden_wp17et1_0.pdf" target="_blank">more opaque ways</a>.
Think about it: why would a developer voluntarily give up potential profit by selling or renting a property at a below-market rate? Such contributions would need to be enforced and/or incentivised.
What can negotiation theory tell us?
<a href="https://journals.sagepub.com/doi/abs/10.1177/0739456X07311074" target="_blank">Negotiation research</a> can help us to understand the likely outcomes of these arrangements. It offers insights into stakeholder interests, the potential for mutual gains, and access to knowledge.
Stakeholder interests
Interests are the underlying values and priorities that motivate stakeholders’ demands or positions in negotiations. Interests in this context relate to the degree to which state government, local councils, or developers feel it is their responsibility to provide affordable housing. It relates to views on “valid” profit margins for developers and concerns about reputation.
It also relates to the priorities and strategies of the community housing providers, who are most likely to own and manage the housing delivered through these negotiations.
We know most developers don’t feel it is their responsibility to deliver affordable housing. Similarly, while some councils have <a href="http://www.portphillip.vic.gov.au/councils-role-affordable-housing.htm" target="_blank">explicit statements on affordability</a>, this is not the case across Victoria.
Mutual gains
In places like San Francisco where affordable housing is required in all developments over a certain size, these requirements are built into feasibility calculations from the outset. Therefore, no incentives are included.
This also creates an even playing field for all developers in the consideration of land and development. As there is no negotiation or incentive that could shift the profit margin, the required approach places everyone on the same starting line. Further, the cost considerations are the same for all, when considering the purchase of a site and undertaking an analysis of the feasibility of a proposed project.
Voluntary negotiations only work when the parties at the negotiating table are interdependent – they must have something to gain and something to contribute in the negotiation or they wouldn’t be there. In places where negotiations are voluntary, incentives are often “bundled together” as sweeteners to offer to developers in the negotiation process. Possible incentives include car park waivers, increases in permissible developable area (i.e height or density bonuses) and fee reductions or waivers.
In Victoria, key incentives like allowing an increase in the floor area of a development – so-called <a href="/news">floor area uplift</a> – are difficult to implement in most local government areas. And expedited planning approvals are politically contentious and have limited impact on developers.
Inconsistency between councils may also allow developers to “shop around”. They are likely to avoid local government areas with a reputation for pursuing contributions.
As negotiations take place across Victoria the capacity for mutual gains for local communities and developers will be a key component in deciding how much affordable housing is provided and at what cost.
Access to knowledge
In negotiations, money and knowledge is power. Stakeholders are likely to hide or manipulate information in negotiations to support their own arguments and interests. This is particularly likely when there is little established trust between parties. Not only does this lead to undemocratic decisions made in a “black box”, it also creates opportunity for exploitation.
Negotiations will centre on trade-offs to achieve economically feasible developments that also include affordable housing. To engage in such discussions, a high degree of knowledge about development economics is required to allow for informed debate. While this is the bread and butter for developers, local councils are often far less resourced to engage in these discussions. There is work to be done in building the capacity of local councils in this area.
Acknowledging this, the authors of this article have <a href="https://msd.unimelb.edu.au/research/projects/current/transforming-housing/affordable-housing-tools/affordable-housing-calculator" target="_blank">built a calculator </a> to help communicate many of the basic premises behind development economics and affordable housing trade-offs.
Have your say on affordable housing
We don’t know yet enough about interests, mutual gains or access to knowledge to fully understand the landscape of this change to Victorian housing policy. And that is why we are surveying the affordable housing industry to gather this feedback.
If you are a private developer, local or state government representative with involvement in residential development or affordable housing policy, a not-for-profit housing provider, or consultant to the housing industry, then we want to hear from you.
Please <a href="https://melbourneuni.au1.qualtrics.com/jfe/form/SV_br4iiTkcQ0CYCnr" target="_blank">click here</a> to take the survey.<img src="https://counter.theconversation.com/content/116829/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
Katrina Raynor, Postdoctoral Research Fellow, Transforming Housing Project, University of Melbourne
Georgia Warren-Myers, Senior Lecturer in Property
Matthew Palm, Postdoctoral Research Fellow, University of Toronto
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/if-its-voluntary-for-developers-to-make-affordable-housing-deals-with-councils-what-can-you-expect-116829" target="_blank">original article</a>.
Main photo: The City of Port Phillip is unusual in having an explicit position on the council’s role in providing affordable housing. City of Port Phillip
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j.ballantyne1990-6AQqhLzZaK

If it’s voluntary for developers to make affordable housing deals with councils, what can you expect?

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Councils are taking over the NSW Planning system with the latest being North Sydney Council’s request to be excluded from planning proposal policy.
At its meeting on 30 July North Sydney Council voted to put all planning proposals on hold until 1 July 2020 as this would be consistent with what the government allowed Ryde Council to do.
The impact of this resolution, if accepted by the NSW Government, will be to put a hold on all major projects in North Sydney for the next 2 years.
Ryde Council seems to be now driving the planning system in Sydney as it is able to bypass Department of Planning policies with the support of the NSW Government.
Now the rest of Sydney’s councils are following the Ryde approach so they can also be exempt from NSW Government policy.
Northern Beaches Council recently requested the Minister for Planning to exempt them from planning policies related to affordable rental housing, seniors housing and disabled housing.
Now North Sydney Council wants to be exempt from having to consider planning proposals from the private sector for a two year period.
The NSW Government must exert its authority as the responsible agency for the Environmental Planning and Assessment Act and not allow a feeding frenzy driven by small councils that are keen to undermine the state government’s authority.
We have seen the NSW Government allow 50 councils across NSW to be allowed to delay the introduction of the ‘Missing Middle’ code for terrace houses for a year and then the NSW Government delegated planning along the Sydenham to Bankstown corridor back to the local councils who had been fighting the extent of development.
Private sector developers are finding that there is major confusion about who is running the planning system and that is leading to a Sovereign Risk issue that is undermining investments that assumed state government policies gave some certainty to outcomes.
It is looking like NSW is going into a lock down mode for two years to appease a noisy minority who are concerned about change.
The losers will be the young couples and families looking for somewhere to live.
Chris Johnson is the Urban Taskforce CEO 
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North Sydney Council latest to reject the government's planning process: Chris Johnson 

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GUEST OBSERVATION
Tasmania is in the grip of a rental housing affordability crisis. What do local governments do to help?
Rural areas in particular lack rental options. To find housing, older people living in rural areas may often face a heartbreaking decision to leave their community.
We wanted to know whether local governments recognised this issue and actively helped seniors to continue living in their communities. We found much more. Local governments have not traditionally been recognised as housing providers, yet many of Tasmania’s 29 local councils do provide subsidised accommodation.
How bad is the problem?
Local councils have been forced to intervene because the state is in the grip of an affordable housing crisis. In Hobart, rental vacancy rates are as low as 0.3%, the lowest of any Australian capital city. The average weekly rent of A$440 is 30% of median weekly household income. That’s the rental equivalent of being in mortgage stress.
Lack of other options has meant that some families resort to camping out and living in caravan parks while they try to secure rental accommodation. Tasmania’s extremely low vacancy rates combined with high rents, lower socioeconomic status, and highly decentralised population means that finding accommodation can be exceptionally difficult.
There are just over 54,000 rental properties throughout Tasmania. Housing Tasmania, the public housing provider, owns about 13,000 of these. Roughly 20,000 are owned and rented privately, as opposed to through a real estate agency.
The estimated shortfall of rental housing is about 5,000 households for Hobart and 29,200 households across the state.
Impacts on older people
The rental housing crisis has particular repercussions for older people who rent. Rising numbers are facing homelessness for the first time. Current health policies aimed at older people remaining in the community rather than in aged care may make matters worse.
Half of the Tasmanian population is 42 or older, the highest median age of any Australian state. Recent research has found that someone renting privately at age 45 is likely to be “highly impoverished” in retirement.
With housing need increasing, pressure is growing on all levels of government to help resolve the crisis.
What local councils do and why
We invited all of Tasmania’s 29 local governments to participate in an online survey. We received responses from 19 local government areas, 12 of which were complete.
Of those that responded, three councils provided local rental accommodation for older people. Two provided this at below-market rent specifically for those on low or fixed incomes. For example, in June 2017, Central Highlands Council advertised residential units for lease to low-income, local retirees.
Asset tests were not always applied. This meant older farmers who needed to be more centrally located for health reasons were able to apply.
Where councils identified that they leased properties targeted at seniors, most of these were bought or built in the 1980s with state and federal funding support. These grant programs no longer exist.
Only one local council indicated it was actively building more accommodation for seniors. When complete, this would provide 60 rental properties. This council had a higher proportion of people approaching retirement combined with a highly decentralised population.
In contrast, another council stated that it believed interest in council-supplied rental accommodation was declining.
This comment tallies with state government statements gathered as part of a 2016 study. The researchers stated that the number of applicants for state-owned seniors housing in the northern region was declining. Consequently, age restrictions were in some cases “relaxed” to fill vacancies.
Our study also identified regional differences in council approaches. Larger urban-based municipalities were less likely than their rural counterparts to own property targeted at the seniors group. But they were more likely to provide assistance in other ways.
The importance of our findings
Given Tasmania’s ageing population, tight rental market and increasing numbers of older women falling into homelessness, these responses require further investigation.
Local governments in Tasmania actually used a surprisingly diverse range of approaches to support local housing of older people. Some provided council land to third parties for building seniors accommodation. Others hosted public forums to highlight sale and rental accommodation suitable for seniors in their council areas.
Less popular forms of financial assistance were rates remissions and fee waivers for planning and building approval fees on applications for seniors and aged care facilities.
Councils also identified that they provided rental accommodation and accommodation support to a range of other cohorts, not just older people.
These findings highlight the importance of better understanding the diverse ways in which local councils can support housing in their communities. The roles of rural councils are particularly important to explore, given the socioeconomic disadvantages entrenched in these communities.
Better understanding the community benefits of such activities may encourage more councils to provide housing. It may also encourage state and federal governments to consider again supporting local governments in providing accommodation, particularly for older people.
Erika Altmann, Property and Housing Management Researcher, University of Tasmania
Lea Coates, Adjunct Researcher, University of Tasmania
Megan Woods, Senior Lecturer in Management, Tasmanian School of Business and Economics, University of Tasmania
<img src="https://counter.theconversation.com/content/94739/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">The authors acknowledge the contribution of Jen Newman, of Regional Development Australia – Tasmania, to the research and this article.
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/councils-help-with-affordable-housing-shows-how-local-government-can-make-a-difference-94739" target="_blank">original article</a>.
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Tasmanian councils' help with affordable housing shows how local government can make a difference

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Sydney councils are sitting on more than $1 billion in unspent infrastructure funds, according to the latest research by the Property Council of Australia.
The figure of $1,091,078,000 in unspent funds across 27 councils was revealed in the Property Council’s latest audit of infrastructure levies. The calculation was based on local government financial statements for 2015-16. 
“Councils are sitting on a billion dollars in unspent funds, funds that should be spent on providing services for the local community – funding libraries, local parks, sporting grounds,” said a media release from the PCA. 
“This money is sitting in the bank earning interest, $30 million in interest over 2015/16, instead of being used for the local community. This money is provided to councils to boost local facilities but instead they are hoarding it,” said Jane Fitzgerald – NSW executive director of the PCA.
She said the research confirms the need for tighter controls that require councils to spend the funds swiftly on infrastructure rather than just leaving them in the bank.
<ul>
<li>The amount of unspent funds increased by just under $115 million over the past year, a rise of 11.7 per cent.</li>
<li>$594,527,000 was collected through levies in 2015-16, but only $510,052,000 was spent</li>
<li>$30,084,000 was earned in interest over 2015/16</li>
</ul>
“With a booming population and big new growth centres across Sydney, it is vital that this money is used to ease the pressure on our community, the money is no good to the community sitting in the bank, but it is good for the Council’s balance sheet,” said Fitzgerald.
“Those Councils fighting amalgamations using rate payers’ money should start focussing more on spending the levies collected for vital local infrastructure rather than political grandstanding in court.”
<a href="https://www.propertyobserver.com.au/images/2017/05/16/Councils.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/16/Councils.png" alt="">
PCA said audit is sourced directly from the financial statements of councils across metropolitan Sydney for 2015-16 so the data is supplied by councils. 
Data was available for 27 councils with some amalgamated councils not providing data and other councils simply not making the data public
Over the past four years, the amount of unspent levies has increased by over 40 per cent, the PCA said. 
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Sydney councils sitting on unspent $1 billion stockpile: PCA 

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GUEST OBSERVER
The Premier, Gladys Berejiklian’s reason for continuing with Sydney council mergers is to increase housing supply but approvals are dropping partly due to the confusion of the merger process.
The NSW Government decision to continue with council mergers will be good in the longer term for more effective planning processes but the transition phase is likely to slow down housing approvals.
The Premier has stated the advantage of council mergers is to increase housing supply and improve planning but over the next two years the amalgamation process is likely to make planning more complex.
The Government must take a stronger role in driving housing supply during the transition to larger more efficient councils by unlocking large housing projects caught up in the planning system. The Urban Taskforce is aware of over 30 large housing projects caught up in the planning process that could be turned into real projects. Some of these projects have holding costs of hundreds of thousands of dollars a month.
The continuation of the merger process needs to be accompanied by a fast track approach to large housing projects during the transition process. The Minister for Housing, Anthony Roberts, should establish an action team under a Commissioner for Housing Supply for a two year period to lift housing approvals.
While the increase in housing completions to 33,000 for Greater Sydney is good news this needs to be balanced by falling housing approvals. The Australian Bureau of Statistics data shows the housing approvals in NSW dropped by 25 percent between July and December 2016.
The Urban Taskforce is keen to work with Housing Minister Anthony Roberts to suggest ways to increase housing supply and housing affordability.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.WKTDGTt942x" target="_blank">here</a>.
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elalademann0606-LAMLni4EAX

Premier needs to take a stronger role with housing supply during the transition to merged councils: Chris Johnson

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVERS
The selection of Melbourne to participate in the international 100 Resilient Cities program sponsored by the New York-based Rockefeller Foundation generated a mix of hopes, expectations and concerns.
In a report released today, researchers assessing the program found a surprising degree of co-operation among the city’s many local councils. The result is the Resilient Melbourne Strategy, adopted this month, which marks a shift towards “whole-of-city” thinking.
In 2013, at the time of Melbourne’s selection, its fragmented governance was a concern. How could a framework for urban resilience emanating from the US be adapted to very different city governance structures operating in Melbourne? What could a single chief resilience officer (CRO) hope to accomplish in just two years across a metropolitan region with more than 30 local government authorities?
The Melbourne project began in earnest with the appointment of the CRO, housed at the City of Melbourne, in November 2014. A year later an RMIT University research team interviewed a wide range of people who were either closely involved with or clearly interested in the project implementation. Interviewees include those serving on the project steering committee, some who had attended a project briefing and some who had only been told about it.
<h2>Overcoming fragmented governance</h2>
It is fair to say the researchers were sceptical about what could be achieved in just two years to foster a city-wide approach to urban resilience. In Australia’s rather cumbersome, three-tiered structure of government it is hard to focus on metropolitan regions that fall somewhere between the responsibilities of state and local governments. Thinking about cities as a whole has only just entered the strategic thinking of our national governments.
Yet the researchers were pleased to find the project had generated unprecedented levels of co-operation involving 29 local government authorities in metropolitan Melbourne. The implementation process had met with widespread approval.
Each of the 100 cities now participating in the Resilient Cities Challenge is provided with a “City Resilience Framework”. This guides development of a specific strategy for the city.
<h2>Adapting to local conditions</h2>
The framework draws heavily on US experiences – especially that of New Orleans since the devastation of Hurricane Katrina in 2005. The Melbourne steering committee realised it would have to adapt the framework considerably to work in a city with 32 local councils.
In Toby Kent, the project initiators selected a CRO who had evident skills in motivation and negotiation. The researchers were told that the patient work involved in building collaboration across so many local government areas made the project stronger than it would have been otherwise.
The concept of urban resilience promoted by the Rockefeller Foundation urges cities to consider a wide range of potential “shocks” and accumulating “stresses”. The research found this approach promoted boundary-crossing dialogues. These exchanges involved people concerned with infrastructure planning, economic development, social care, community development and environmental protection.
Some of the interviewees expressed misgivings about the growing popularity of the concept of resilience in policy discourses. Despite this, the research findings suggest it does have a capacity to get people thinking beyond the normal boundaries of policy and practice.
<h2>Towards a more holistic view</h2>
In Australia, the concept of resilience has largely been associated with emergency management. However, the semi-structured research interviews tended to focus more on accumulating social, economic and physical stresses. These make the city as a whole more vulnerable, but are often neglected.
It was noted, for example, that urban planning can leave many people feeling socially isolated. One council has now applied “a lens of preventing family violence” into all areas of its work, ranging from infrastructure planning and economic development through to health promotion and community development.
The Resilient Melbourne project released a preliminary resilience assessment in June 2015. This was developed into the newly launched Resilient Melbourne Strategy.
Much of this strategy aims to “scale up” existing projects or initiatives. The aim is to demonstrate that these can be more effective on a metropolitan rather than localised scale.
Follow-up research will be needed to find out which elements of the strategy become embedded in the policies and practices of Melbourne’s local government authorities and the multitude or public and private sector organisations trying to ensure that vulnerabilities are addressed long before they become full-blown crises.
Importantly, the research found that the project was able to generate some innovative policy and practice dialogues and demonstrate the benefits of whole-of-city thinking.
Martin Mulligan is senior researcher, Globalism Research Centre, RMIT University and can be contacted <a href="https://theconversation.com/profiles/martin-mulligan-108697" target="_blank">here</a>.
Blythe McLennan is research fellow - Emergency Management, RMIT University and can be contacted <a href="https://theconversation.com/profiles/blythe-mclennan-8288" target="_blank">here</a>.
Tarnya Kruger is research assistant, Landscape and Environmental Sociology, University of Melbourne and can be contacted <a href="https://theconversation.com/profiles/tarnya-kruger-271311" target="_blank">here</a>.
All are authors for The Conversation.
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jchancellor-FAypfDUnLy

Has the 100 Resilient Cities Challenge benefited Melbourne?

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GUEST OBSERVER
The management of growth across Sydney should be helped by the NSW government announcement of 17 new councils through amalgamations.
The NSW government has needed to take on a reform agenda for local government for decades and is now delivering.
The announcement that the government is proceeding with the formation of 17 new councils including 7 in metropolitan Sydney should finalise debate and lead to more effective councils. 
The government is also supporting in principle 9 more new councils including 6 in metropolitan Sydney subject to court decisions and this is likely to also lead to more effective councils.
The most important thing is to finalise the transition quickly so strategic planning and development assessments are not disrupted.
The Urban Taskforce has seen delays to planning decisions for large projects that have been caught up in the proposed amalgamations and a clear decision on the final structure of council boundaries should give clarity to responsibilities for planning decisions. We urge the government to ensure that planning determinations have clear processes for decision making during the transition phase to the new councils.
There would appear to be a role for the Greater Sydney Commission to take over some planning decisions in Sydney during the transition to the new councils through their two planning panels. Now that the 6 District Commissioners are appointed the new panels should be able to get underway soon.
The amalgamation of rural councils should lead to more effective servicing of communities but towns that are a long distance apart will need local service centres for their communities.
The Urban Taskforce is keen to work with the state government on ensuring planning services, particularly for approvals, are not disrupted during the transition to the new council structures.
 
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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Stronger councils good for a growing city and state: Chris Johnson

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVERS
Australia’s local government sector has been undergoing reform in recent decades. The result has been fewer and larger local governments and a reshaped role for elected members or councillors. But do councillors understand what this means for them. 
From the 1990s, the number of councils in Australia has decreased from 826 to 565. Reforms have focused on local councils’ administrative, financial and technical capacities.
These reforms tend to strengthen local government’s service-delivery role. But, so far, they have done little to support local representation and democracy. There are significant concerns that these reforms may have a negative impact on local democracy.
What the changes mean
Local government legislation has changed in many Australian states. The legislation now sets out the roles of the CEO or general manager and the role of councillors. The CEO generally has management responsibility for the organisation while councillors are responsible for strategy and policymaking.
However, what councillors may not necessarily understand is that their role is strategic leadership – not the day-to-day management of the organisation.
As part of the authors' research, we conducted a national survey of councillors on their views of their roles and responsibilities. The preliminary results make it clear they felt they should have more influence over administrative policy and procedures. The difficulty is that legislation says this is the responsibility of the CEO or general manager.
This matters. If councils are larger organisations and councillors represent more residents, it is important that they focus on understanding their communities’ needs and aspirations. For local democracy to be effective, councillors should focus on developing strategic plans to meet residents’ needs, rather than trying to manage day-to-day operations.
State governments argue that the main objective of local government reform is to make councils more efficient. They want to ensure local government’s financial sustainability and its ongoing ability to provide services to the community. This usually leads to fewer and larger local governments. 
A new role?
Australia’s 5,060 councillors represent a wide diversity of communities and govern very different kinds of organisations.
The 565 councils in Australia range greatly in size. The largest, Brisbane City Council in Queensland, has an annual operating budget of A$2.9 billion and serves a community of just over a million people. It covers an area of 133,809 hectares.
The smallest, Sandstone Shire Council in Western Australia, comprises a population of 116 and covers a land area of 3,266,650 ha. This is comparable to the size of Belgium. It had an annual operating budget in 2014 of $3.4 million.
Local government reforms include a stronger emphasis on councillors’ strategic, long-term decision-making role. In New South Wales, councils also have to establish community-engagement strategies.
These changes were intended to shift a previously widespread perception of local councils as simply managers of local services and local infrastructure to one where their role, as democratically representative bodies, gained in significance.
This defining of roles between strategic decision-making and involvement in day-to-day administration is problematic. Some councillors have expressed frustration and confusion when, following changes in the legislation, they are no longer able nor permitted to deal directly with staff.
The preliminary results of our study show that what councillors think is their role may not be the same as the intent of local government reform. Larger local governments also means councillors must represent more people.
Roberta Ryan is director, UTS Centre for Local Government and Australian Centre of Excellence for Local Government, and can be contacted <a href="https://theconversation.com/profiles/roberta-ryan-172068" target="_blank">here</a>.
Su Fei Tan is lecturer, lnstitute for Public Policy and Governance and senior research officer, Centre for Local Government,University of Technology Sydney and can be contacted <a href="https://theconversation.com/profiles/su-fei-tan-237627" target="_blank">here</a>.
Both are authors for The Conversation.
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How council mergers and reforms imperil local government democracy

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GUEST OBSERVER
Hard-pressed ratepayers in New South Wales and Queensland need no reminding of the perils of municipal amalgamation. 
NSW experienced a sharp dose of forced mergers in 2004. Queenslanders underwent draconian council consolidation under the Beattie government in 2008.
NSW is now on the cusp of a further round of mergers being inflicted on unwilling councils.
In all three cases, the architects of compulsory amalgamation have been under the sway of the dogma that “bigger is better” in local government. Ratepayers are told amalgamation will herald a new dawn of lower rates, cheaper services, improved service quality, enhanced financial viability and superior administration and planning.
In NSW, the Baird government has especially emphasised the financial advantages of municipal amalgamation. These claims are typically presented as the outcome of careful research and deliberation.
Mergers tested in a real-world experiment
Are these claims consistent with the empirical evidence? My colleagues Brian Bell and Joseph Drew and I investigated this question for NSW’s 2004 forced amalgamations.
We took advantage of being able to use 2014 data to compare the performance of merged councils with their unmerged counterparts over ten years.
We compared amalgamated “general purpose” councils with their un-amalgamated peer councils in the same local government classification. We thus had the benefit of a “natural experiment”, being able to compare the two groups of “like” councils against a common set of performance indicators.
Our peer-reviewed research paper will be published shortl<a href="https://www.propertyobserver.com.au/https://esa.snapdev.com.au/news/15991">y</a>.
The criteria we used for this comparison included four the Baird government is using under its “Fit for the Future” program – operating performance, own-source revenue, building and infrastructure renewal, and asset maintenance ratios – as well as council employees per capita.
We found no statistically significant differences in the performance of the two groups of councils against these criteria. This falsifies past claims by the Carr Labor government that its forced amalgamations would substantially improve NSW local government financial performance. It also undermines the Baird Coalition government’s claims for its proposed mergers.
Evidence mounts against ‘bigger is better’
Other research provides additional damning evidence. For example, Joseph Drew, Mike Kortt and I examined the outcomes of forced amalgamations in Queensland in 2008. These reduced the number of councils from 157 to just 73.
Our research demonstrated that this resulted in a greater proportion of councils exhibiting diseconomies of scale. That is, mergers created entities that were simply too large to be run efficiently.
Furthermore, of the 31 new councils the mergers created, 58% exhibit decreasing returns to scale. Comparing their efficiency through time, we found merged councils performed worse than unmerged councils.
Finally, Elizabeth Sinnewe, Mike Kortt and I recently tested the claim that “bigger is better” by examining the financial performance of Australia’s largest council by population, Brisbane City. In our recently published analysis, we compared Brisbane City Council to Sydney City Council, the average of six southeast Queensland councils and the average of ten metropolitan NSW councils.
We did so using four measures of financial performance – financial flexibility, liquidity, debt service capacity and asset management. Between 2008 and 2011, the three comparator groups outperformed Brisbane Council in financial flexibility, liquidity and debt-servicing ability.
Taken together, these three papers cast doubt over the continuing dogma that “bigger is better”. They also add to the empirical literature on municipal mergers by demonstrating that “biggest is not best” either.
In particular, the financial performance of local authorities does not improve as advocates of amalgamation contend. On the contrary, amalgamated municipalities often perform worse than their unmerged counterparts.
Amid the controversy over the Baird government’s compulsory council consolidation program, our findings underline the foolishness of making public policy in an “evidence-free” manner.
If forced amalgamations proceed, we may well see hundreds of millions of dollars in taxpayer and ratepayer funds squandered simply because policymakers preferred dogma to empirical evidence.
Brian Dollery is professor of economics and director of the Centre for Local Government, University of New England and author for The Conversation. He can be <a href="https://theconversation.com/profiles/brian-dollery-162945" target="_blank">contacted here</a>.
 
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