Sydney is among the worst performers on housing supply and affordability, says National Economics deputy executive director Ian Manning.

 By Angela Dorizas

State and federal housing ministers have created an “illusion” of government action on housing affordability, the head of the Australian Local Government Association (ALGA) has said.

ALGA president, Cr Geoff Lake, accused housing ministers and property developers of “beating-up on local government” by suggesting that council planning processes and delays in development assessments were to blame for the housing crisis.

 “Planning processes only have a very minor part to play in the cost of housing and the wider affordable housing problem that Australia faces,” Cr Lake said.

“We in local government think it is the biggest con job that has been brought into public policy in recent years by developers, very successfully, in concert with state and federal housing ministers.

“They’ve all simply grabbed that low hanging fruit of local government planning processes as the area that they can, through rhetoric, appear to be taking action on to create the illusion to the electorate that something is actually happening on affordable housing. Clearly it is not.”

Cr Lake backed ALGA's argument with findings of the 2010-11 State of the Regions report, which he launched today in Canberra.

The annual report was conducted by National Economics on behalf of ALGA. This year, the report focused on the housing supply and affordability in 65 regions.

National Economics executive director and co-author of the report, Dr Peter Brian, said the housing crisis was caused by a whole range of issues, particularly under investment in infrastructure and misguided industry policy.

“Governments over the last 20 years, at the national and the state level, have dropped the ball in terms of providing the infrastructure and the jobs that are necessary for people to be able to afford housing in these areas which are targeted for large increases in housing supply,” Dr Brian said.

“The problem has been long term in the making and it will be long term in getting a sustainable solution.”

Dr Brian recommended a massive increase in transport infrastructure spending to connect new suburbs to other parts of major metropolitan areas where jobs were available.

“Up until the early 1980s, governments spent a lot more in terms of transport infrastructure for new houses built than what they have done since,” he said.

“It would take a Chinese-type approach to infrastructure investment development to make Sydney affordable.”

National Economics deputy executive director Ian Manning said Sydney was among the worst performers on housing supply and affordability.

“Sydney is in a very difficult place where house prices have got so high that it’s rather hard to bring them within the affordable range,” he said.

He suggested the New South Wales Government divert growth to satellite cities, such as Newcastle.

“If we were the NSW Government, we would be thinking about other places in the state where we could direct growth,” Dr Manning said.

Cr Lake said local government would continue to raise the issue of housing affordability at future COAG meetings.

“We want to be part of a whole of government approach, in conjunction with the development industry and most importantly in conjunction with community consultation, to address the problem of housing affordability in this country,” he said.

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