Want to know why you, your kids, or your grandkids find it so hard to buy their own home in Sydney? Because there's a housing supply crisis. And one key reason why has been exposed this week: red tape.
What makes matters worse is that there appears to be no end in sight.
Here's an alarming set of figures from CoreLogic's latest report: "In June 2012, 21.3% of Sydney suburbs had a median house value of more than $1 million, by June 2017 55.7% of suburbs had a median house value in excess of $1 million while only 8.7% of suburbs had a median value below $600,000 and most were located more than 50 kilometres from the CBD".
And things are set to become even worse. The National Housing Supply Council calculated the gap between demand and supply in 2015 at 328,800. By 2025 they estimate the gap will reach 556,900. All of this spells disaster for the next generation of would-be home buyers.
And while there are a number of reasons for skyrocketing house prices, the NSW state government should be given credit for doing one of the most valuable things governments can do when it comes to housing affordability — releasing land.
The availability of land on which people can build homes is one of the key factors behind increasing metropolitan house prices in Australia. According to the Property Council, land released by the government should have seen an extra 805,000 new dwellings built.
But due to red tape at the local government level only 115,000 homes have been built in the past five years.
This is not surprising when local councils obsess over the minutiae of planning. The Sydney Local Environment Plan 2012 is 233 pages of red tape for everything from "floor space ratios" to "architectural roof features". There's even a section dedicated to "wind-affected balconies".
And it's not as though you're home and hosed if you comply with all of these ridiculous rules governing what you're allowed to do on your own land.
Many councils across NSW still conduct votes on whether a development proposal is allowed to go ahead even after you think you've dotted every "i" and crossed every "t". Such a process leaves development decisions open to manipulation, and breaches the rule of law.
The decision about whether an application is approved shouldn't be made by a handful of councillors. The role of the local government is to put in place a reasonable set of rules that can be relied on by the local community, and by developers. Without a well-defined legal framework, it's the rule of men, not of laws.
The most valuable aspect of the Property Council's research is charting a practical way forward on housing affordability. The clarion call is clear: slash red tape to unleash a boom in housing construction, and help to make the dream of home ownership a reality for the next generation.
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