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Proposed policy to ‘cripple’ mum and dad investors

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1 minute read

Proposed policy to ‘cripple’ mum and dad investors

by Emma Ryan 14 September 2020 1 minute read

Proposed changes set to revamp the NSW housing market could see more harm than good, according to an expert in the space.

Proposed policy to ‘cripple’ mum and dad investors
September 14, 2020

Small is the New Big co-founder Ian Ugarte said the NSW government’s proposed overhaul of existing planning provisions will spark negative consequences to housing affordability if they go through. 

The housing commentator likened the proposed changes to a “sledgehammer to the existing polices when only a scalpel is needed”, noting the changes will “cripple the entire mum and dad investment sector, with the result being that only inefficient community housing providers or large profit-driven commercial property developers can operate in the sector”.

“This approach is likely to not only suffocate the future supply of affordable housing, it will also force planners to relive past mistakes like Macquarie Fields, which failed spectacularly because planners tried to replace inner-city public housing with new block developments in isolated city-fringe locations that were already suffering high unemployment,” Mr Ugarte said.

Mr Ugarte said that should the proposed changes go ahead, the NSW is effectively “pulling the rug out from small, private developers, like mum and dad investors, who want to help ease the escalating housing crisis and invest in properties which provide affordable housing options that result in a positive return”.

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“Only a tone-deaf state government would enact policies that would reduce the ability of private developers to continue to play a role in the provision of accommodation to meet the growing demand for affordable housing,” he added.

To further his point, Mr Ugarte expand that under the proposed changes, the following developments would become illegal to build, with the government mandating that all boarding houses be: “Managed by a not-for-profit community housing provider, or pre-qualify as ‘build-to-rent housing’ by providing 50 or more self-contained dwellings within the one development, and have a minimum of 10 bedrooms under the ‘co-living’ developments.”

“[This will] result [in] less efficient community housing providers or large profit-driven commercial property developers that only dedicate a small percentage of future, large-scale developments to community housing – creating a ‘have’ and ‘have not’ divide within the one development,” Mr Ugarte said.

“Not only that, new build-to-rent housing developments will be pushed out of low-density residential areas, where they are currently integrated into the suburban landscape, to high-density zoning. This was the premise behind the development at Macquarie Fields, and we all remember how that ended up. Why is the government committed to repeating the errors of these poor planning decisions of the past now in 2020?

“It’s widely understood that social housing experiments, like Macquarie Fields, failed because planners tried to replace inner city public housing with new block developments in isolated city-fringe locations that were already suffering high unemployment.

“That seems eerily similar to what is being proposed under this policy.”

Proposed policy to ‘cripple’ mum and dad investors
Proposed policy to ‘cripple’ mum and dad investors
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About the author

Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]Read more

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