New South Wales

NSW government alters development contributions system

IN a bid to boost housing, the NSW government yesterday announced the establishment of a $50 million fund to provide for priority infrastructure projects to assist local councils in approving housing developments in growth centres.

Planning Minister Tony Kelly said that following "extensive consultation with stakeholders", a number of new measures would be introduced in order to increase housing construction and ensure downward pressure on housing prices.

Mr Kelly said the announcement recognises councils face higher costs in creating well-planned communities in greenfield areas.

While the government said it will increase the development contributions cap to $30,000 in greenfield areas, the development contributions cap remains at $20,000 for established areas. Mr Kelly said the increased cap for greenfield sites recognises the particular issues facing growth councils.

Other measures approved by the Government today are:

  • The 'grandfathering' of existing contribution plans so areas with more than 25% of DAs lodged with a council will not be subject to the relevant cap - recognising existing commitments that both councils and developers have made in those areas;
  • Establishing a $50 million Priority Infrastructure Fund over two years to help fund infrastructure in development areas;
  • Addressing State agency requirements for contributions plans as well as investigation other options to reduce Councils' land acquisition costs;
  • Exempting councils with plans under the relevant cap from reviewing their contribution plans; and
  • Allowing developers to pay above the relevant cap if they agree to do so.

IPART will examine special rate variation requests from councils which have plans to fund legitimate infrastructure costs above the cap.

Mr Kelly said the changes were the result of consultation with developers, growth area councils and the Local Government and Shires Associations.

Mr Kelly said NSW Government was committed to its recent reforms to the development contributions system, which it says still ensure that homebuyers are "not forced to pay for excessive and unwarranted infrastructure contribution costs."

While welcoming of the announcement, the Local Government and Shires Associations said that "there will still be a significant shortfall in funds for several councils, particularly in fast-growing areas". The group said they will continue to pressure the government to continue to work with councils on solutions for funding basic community infrastructure.

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