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Developers kick up a stinkDevelopers kick up a stink over hints that cap on council levies will be lifted
PROPERTY developers have slammed the state government for showing signs of caving in to demands from councils to allow development levies to be raised above a $20,000 cap.
In meetings with local government and developer lobby groups this week, the government outlined proposals aimed at kick-starting developments, which have been stalled by the cap imposed on Section 94 levies.
In the budget in June, the government slashed to $20,000 per lot the levy that councils could charge developers to fund infrastructure needed for housing projects. Councils had been charging developers more than $50,000 per lot, which was cited as a key reason for the higher housing costs in Sydney compared with those in other cities.
The government said in the meetings that it was willing to permit councils in growth centres, such as the north-west and south-west, to impose levies of $30,000 per lot. It indicated it would consider some flexibility if developers were willing to pay a higher levy, by allowing direct application to the planning minister for approval.
In a letter sent to the government this week, the Property Council of Australia said councils would be rewarded for their ''bad behaviour'' if the government eased the cap limits, and the controls introduced around it. A revised cap ''works against the fundamental premise of the original package, which sought to reduce costs to home buyers,'' the council wrote in the letter to the Planning Minister, Tony Kelly, which was obtained by the Herald.
''The benefits of discipline, fairness and accountability in financing infrastructure will be lost if the proposed amendments proceed.''
The move to slash the cap on developer levies was one of a series of measures aimed at increasing home affordability. Councils were also allowed to apply to the pricing regulator, the Independent Pricing and Regulatory Tribunal, for permission to raise council rates, bypassing the longstanding pegs on council rates.
Even so, local councils have complained they cannot afford to fund the necessary infrastructure for new housing, particularly in the growth centres.
The proposed $30,000 cap on levies in growth centres would inevitably lead to other councils demanding parity, property developers warned.
Mr Kelly's office refused yesterday to discuss the state of negotiations to resolve the impasse between the councils and property developers, saying only that resolution was ''imminent''.
Mr Kelly is to take his proposals to cabinet next week.
Source: Sydney Morning Herald