Council slams infrastructure proposal

A draft policy to reform the way contributions for social infrastructure are sourced from residential property developers has generated mixed responses from the industry, with submissions from the Property Council of Australia (WA) and Satterley Property Group taking vastly different positions.

The new policy - a joint initiative of the WA Planning Commission, the Urban Development Institute of Australia (WA) and the WA Local Government Association - would create a formula for assessing developer contributions, based on the catchment area of the infrastructure being provided.

It's an approach that has drawn strong criticism from the Property Council, which believes the policy is too open-ended and could lead to predatory charging by local authorities.

In its submission to the WAPC, the council said the new model would create more red tape in the approvals process and exacerbate the housing affordability issue.

Citing research by consultancy UrbisJHD, Property Council executive director Joe Lenzo said infrastructure charges for new housing had risen faster than construction costs nationally, creating a big gap between the actual cost of infrastructure and total levies charged by councils.

Mr Lenzo said NSW had now moved to wind back its developer levies in areas experiencing mortgage stress.

However, the WAPC has received support from Satterley Property Group, which said the variety of mechanisms currently used to calculate infrastructure charges lacked transparency or accountability.

Satterley's deputy managing director Darren Walsh said the new policy would provide an open and accountable system, with new and existing residents sharing the cost of infrastructure.

However, the company proposed several changes to the policy, such as using estimates for infrastructure costs, rather than actual costs, in the new scheme.

It also said market value, rather than fair net expectance value, was a better measure of land value in assessing contributions.

UDIA WA chief executive Debra Goostrey has previously said the new policy would formalise the existing system for developer contributions, and help maintain housing affordability.

Currently, developers make financial and in-kind contributions towards basic infrastructure, and negotiate extra services as needed.