Dawdling councils really do cost us money

By Allison Hailes – CEO Urban Development Institute of Australia WA https://udiawa.com.au/

The time is money adage could not be more true than when it comes to property.

Simply put, the cost of unforeseen delays to projects, particularly during approvals, increases the final price paid by the end purchaser.

In fact, Urban Development Institute of Australia research showed a one year delay to an approval raises the same price of a greenfield lot by 13 per cent. That’s why the UDIA wants action to increase local government accountability and transparency in relation to the services they provide as part of the planning and development approvals process.

The UDIA has met with State Government ministers and outlined concerns about assessment and decision making applications. We’ve requested the introduction of mandatory performance reporting on planning matters by local governments and greater transparency and accountability for the funds they collect through Development Contribution Schemes.

Despite the recent legislative amendments to increase local government accountability by extending the Auditor-General’s powers to local governments and providing independent oversight to improve local government standards, the changes didn’t go far enough.

While there are some local governments that perform relatively well, it is too often the case that processing times are blown out, decision-making processes constantly change and fees and charges vary significantly across local governments. This causes additional risk and costs for developers navigating the approvals system. That cost gets passed onto purchasers.

The introduction of a planning performance reporting system, similar to the one in the Eastern States, would enable local governments that are performing well to be recognised and those that are not to be given the support they need to meet benchmarks. It would introduce some accountability for landowner funds collected by local governments under Development Contribution Schemes and voluntary agreements.

The schemes allow local governments to collect a cash contribution toward the cost of new infrastructure from project developers. Our research shows that at least $1.5 billion in contributions is sitting in the metropolitan local government accounts. However there is no way to check on this figure.

And there have been problems managing these schemes. They include continual extension of the time over which contributions are collected, cost increases for new infrastructure despite significant price reductions for civil works elsewhere, and double the funding required for a piece of infrastructure.

The UDIA is keen to see the system perform as efficiently as possible so that unnecessary costs and delays do not cause a knock-on effect to the price of property.

A reporting system will provide evidence and clarity of where there are ongoing problems and these issues can then be addressed.

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