Property Council calls for greater government trust and flexibility

Property Council president Travis Doherty says there needs to be more trust between the government and developers. Photo: G. Tsotsos.

The ACT Property Council’s new head, Travis Doherty, has made a strong call for greater trust between the ACT government and developers, arguing that attempts to regulate bad development are stifling innovation and leading to poorer results for Canberra.

Doherty, who’s also CEO of the Village Building Company, says the ACT’s unique mix of control over both land release and housing policy can create “perverse outcomes – the intentions can be good but the outcomes aren’t”.

The current strategy for 70 per cent urban infill is “really important to get right”, he says. “But in the past, we’ve seen parcels of land where the community would have been better off if revenue wasn’t the key driver of what eventually happened.”

Doherty says the breakup of the Land Development Agency was the right move on the government’s part, and that the Property Council is eager to work with them to get better housing choices across the community.

But he believes a real problem with trust between the sectors gets in the way. “It’s a fascinating mindset when you look at this trade-off between prescriptive rules and regulations which are meant to rein in bad development, and that fact that they can actually stifle innovation, whether its a block of land on the Northbourne corridor or somewhere at Gungahlin,” he says.

“One of the biggest misconceptions about property developers is that we’re just in it for the buck. Making a commercial profit is important for any business, but the way you do it matters too. I look at Village for example and we’re a 31-year business. You want to drive around what we’re doing in Weston or South Jerrabombera or Belconnen in 15 years’ time and feel proud of it.

“Creating a great place for people with great amenity, culture, arts, cafes, a really nice precinct actually makes it more commercially viable. It’s actually in our collective interest to ensure we provide those results.”

That’s where Doherty says regulation can go off the rails, arguing for example that a restriction on buildings above four storeys on a particular site might mean there’s less room for the green space, playgrounds, cafes and mixed-use development that creates pleasant places to live instead of dormitories.

And community resistance to any development anywhere doesn’t make it easier. Extended community disputes can lock up land and suck up the money that might have been allocated to community gardens or other design elements that are good for people but not essential for a workable profit margin.

“We are all passionate about Canberra, but of all the regions I’ve operated in Australia, there’s an amplified disproportionate say here. On face value that’s OK so long as we don’t get to a point where the development results are worse. If you listen too much to one part of the community the outcomes aren’t necessarily good for the whole community,” Doherty says.

“The property industry will work with government and the community to ensure we have robust planning and policy, but we need that level of trust where we’re all invested in the Canberra region, we want to see this place succeed, so can we loosen off a little on the prescriptive requirements, and encourage and incentivise innovation instead?”

He outlines an example where a piece of property is re-zoned and the value goes up to residential. The lease variation charge is hefty, and there’s complexity around how a property is classified as commercial or residential with nothing in between for mixed use.

“But what if you came to an arrangement on the lease variation charge where what would have been paid there is contributed instead to better building design and better architectural outcomes?”, he suggests. “Commerce still has predictability around profits, but the money goes into better design and better buildings instead of high charges.”

Doherty says he knows these are complex situations, and that some developers and some deals have had a poor reputation with the community. But he says the sector isn’t scared about having the debate on Canberra’s future out in the open if it lifts the conversation up and creates better outcomes.

“The government doesn’t want to be seen to be on the side of the developer, the developer doesn’t want to be seen as being pushed down the road of where the government is going, I get that,” he says. “But I could name dozens of situations where we could have all done a better job if everyone had been prepared to sit down and have a transparent, adult conversation about where they’re coming from.”