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Release land for people, not profit to fund grandiose plans

By Greg Cornwell - 10 May 2016 13

tuggeranong

The review of the National Capital Plan last week provided opportunities for major land releases.

In Ginninderra the CSIRO’s 701 hectare field station site beside the Barton Highway is estimated to make available 6500 housing blocks, the same number as the West Belconnen development which will straddle the ACT-NSW border.

In the south permission has been given to develop suburbs on the west bank of the Murrumbidgee River – something the ACT government is not keen to pursue.

However “affordable housing” depends upon supply and demand which in turn depends upon the government’s release of housing blocks, something it has been parsimonious in doing in any great quantity, thus keeping up the price to the benefit of consolidated revenue.

This might explain excuses about not acting upon this land bonanza (environment and infrastructure down south and unqualified urban development in the north) but there are other considerations too.

Among these is the proposed higher rise buildings across town. The Belconnen town centre, the NRMA building in Civic, Anzac Park East and West, the old government health headquarters in Furzer Street, Woden, are examples.

We assume these higher rise mostly will provide residential accommodation and if not and a government department is snared the premises it vacates will then be up for redevelopment so occupants still will be sought.

Unless “affordable housing” is available how many of these higher rise occupants will be young marrieds, locked out of the quarter acre block market and substituting a pet (goldfish perhaps) for a child in their modern but groundless rental apartment?

However, It is not in the interest of the higher rise construction investors to have their expensive residential accommodation sitting vacant, any more than having their ground floor cafes and restaurants going broke through lack of custom.

Then there is that “affordable housing” means different amounts to different people and how this target can be achieved because building costs and wages won’t fall.

Land sale cost needs to be reduced but so does the reserve price after infrastructure costs have been factored in and this price needs to be enforced to prevent developers reaping the benefits – something the government currently enjoys.

This can best be achieved by large amounts of land being released, public notification of estimated infrastructure costs and a cutback in the profit the government hoped to make on the land sales.

With the limited revenue-raising opportunities of ACT administrations it would be necessary to cut our costs to suit our purse so that funding expense grandiose schemes out of massive government profits from land sales and inner city development did not occur.

Perhaps then the opportunity presented by the large recent NCP land review for those seeking “affordable housing” can be realised.

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13 Responses to
Release land for people, not profit to fund grandiose plans
gazket 12:43 pm 14 May 16

MERC600 said :

Dilandach said :

No such thing as “affordable housing” in Canberra. If you think there ever will be you are in dream land .ACT has limited area because most of it is locked up in National parks going to waste.
When there is less land for sale prices can only go up.

Any party that says they can bring “affordable housing” in Canberra is straight out lying to our faces.

So land is infinite? People will buy anything if it is only available?

What’s the problem then? Release all the land locked up in Car Parks going to waste and subdivide the Simpson Desert.

The ACT gov have been selling car parks . Any fool can see there is limited land in the ACT. The gov know they can charge a premium . For houses the only way to get affordable cheaper land in the ACT is to shrink the block put a house on it with no yard.

For units they would be small cheap with no $2 million top floor penthouses and a high rise future ghetto .
How do you get affordable housing in an area of limited land that isn’t government subsidised and owned .

dungfungus 10:30 am 14 May 16

reddy84 said :

pink little birdie said :

I am a Rabbit™ said :

Unfortunately the current government has created a land ponzi scheme and in order for current debts to be met and not-needed infrastructure serviced, any open spaces that are found become “grist for the mill”.
This policy prevents new land being sold for “affordable housing” as revenue must always be optimised.
We still have our AAA credit rating though!

NO land in the ACT is sold.

You really need to stop blaming the current government for everything including shrinking your undies in the wash.

Canberra was founded as a “grand ponzi scheme” aka self financed by land LEASING over 100 years ago by the COMMONWEALTH GOVERNMENT.

Whilst technically true land is leased in the ACT, the end result is much the same. We buy the right to lease. As for it being a Ponzi scheme far from it really. A Ponzi scheme is where you pay returns to investors from money from new investors rather than from profit.

Though the housing industry not just on the act or leases is very much an over inflated bubble. Where it’s paper value is more than its true value. But that’s not a Ponzi scheme.

If you say so.

JC 4:48 pm 13 May 16

pink little birdie said :

I am a Rabbit™ said :

Unfortunately the current government has created a land ponzi scheme and in order for current debts to be met and not-needed infrastructure serviced, any open spaces that are found become “grist for the mill”.
This policy prevents new land being sold for “affordable housing” as revenue must always be optimised.
We still have our AAA credit rating though!

NO land in the ACT is sold.

You really need to stop blaming the current government for everything including shrinking your undies in the wash.

Canberra was founded as a “grand ponzi scheme” aka self financed by land LEASING over 100 years ago by the COMMONWEALTH GOVERNMENT.

Whilst technically true land is leased in the ACT, the end result is much the same. We buy the right to lease. As for it being a Ponzi scheme far from it really. A Ponzi scheme is where you pay returns to investors from money from new investors rather than from profit.

Though the housing industry not just on the act or leases is very much an over inflated bubble. Where it’s paper value is more than its true value. But that’s not a Ponzi scheme.

HenryBG 2:38 pm 13 May 16

pink little birdie said :

Canberra was founded as a “grand ponzi scheme” aka self financed by land LEASING over 100 years ago by the COMMONWEALTH GOVERNMENT.

My “Lease” says (from memory) that I have to pay them 5c/year in rent. They’ve never collected.

Name a single arbitrary lease resumption. Even that couple in Waramanga that had been in breach of their lease since the 1970s have never been chucked off their lease.

They can call it a “lease” but it’s no more liable to be resumed than freehold NSW land is. Probably less liable if anything.

pink little birdie 11:06 am 13 May 16

Yes keep releasing land for new houses it’s making the established houses cheaper..

far north Canberra and far south Canberra has houses for under $350,000

I would suggest a scheme like the NT had for low income earners first home buyers. where if you met the requirements the government would pay the 30% deposit towards the house and then when you sold it you would have to pay back 30% of the sale price. It would be a nice money spinner and addressing the issue of the deposit.
Link it to a price cap of say $100,000

pajs 11:02 am 13 May 16

Bit of a muddled argument in here. I think you are saying government should accelerate land releases in the ACT to bring down the prices of new properties, but directly regulate prices developers can ask buyers for those properties in order to stop developers taking a bigger slice and the prices not coming down? Can you see some problems with this as a plan?

I reckon you’d have more chance of getting an accelerated release of land dedicated to low-income buyers. There are also other options worth considering, including growing the stock of public housing, reform the rental laws to drive longer-term leases & reduce tenant price-high exposures, and supporting more housing cooperatives.

dungfungus 8:02 am 13 May 16

MERC600 said :

Dilandach said :

No such thing as “affordable housing” in Canberra. If you think there ever will be you are in dream land .ACT has limited area because most of it is locked up in National parks going to waste.
When there is less land for sale prices can only go up.

Any party that says they can bring “affordable housing” in Canberra is straight out lying to our faces.

So land is infinite? People will buy anything if it is only available?

What’s the problem then? Release all the land locked up in Car Parks going to waste and subdivide the Simpson Desert.

“People will buy anything….”
Land isn’t bought, it is leased (according to you).

rubaiyat 7:33 am 13 May 16

Dilandach said :

No such thing as “affordable housing” in Canberra. If you think there ever will be you are in dream land .ACT has limited area because most of it is locked up in National parks going to waste.
When there is less land for sale prices can only go up.

Any party that says they can bring “affordable housing” in Canberra is straight out lying to our faces.

So land is infinite? People will buy anything if it is only available?

What’s the problem then? Release all the land locked up in Car Parks going to waste and subdivide the Simpson Desert.

gazket 10:05 pm 12 May 16

No such thing as “affordable housing” in Canberra. If you think there ever will be you are in dream land .ACT has limited area because most of it is locked up in National parks going to waste.
When there is less land for sale prices can only go up.

Any party that says they can bring “affordable housing” in Canberra is straight out lying to our faces.

HiddenDragon 5:34 pm 12 May 16

“However “affordable housing” depends upon supply and demand which in turn depends upon the government’s release of housing blocks, something it has been parsimonious in doing in any great quantity, thus keeping up the price to the benefit of consolidated revenue.”

Precisely – and this inconvenient truth makes a mockery of the Government’s pretence that reducing stamp duty and increasing rates (more than commensurately) reflects a sincere concern about housing affordability.

rubaiyat 5:09 pm 12 May 16

I am a Rabbit™ said :

Unfortunately the current government has created a land ponzi scheme and in order for current debts to be met and not-needed infrastructure serviced, any open spaces that are found become “grist for the mill”.
This policy prevents new land being sold for “affordable housing” as revenue must always be optimised.
We still have our AAA credit rating though!

NO land in the ACT is sold.

You really need to stop blaming the current government for everything including shrinking your undies in the wash.

Canberra was founded as a “grand ponzi scheme” aka self financed by land LEASING over 100 years ago by the COMMONWEALTH GOVERNMENT.

dungfungus 3:24 pm 12 May 16

Unfortunately the current government has created a land ponzi scheme and in order for current debts to be met and not-needed infrastructure serviced, any open spaces that are found become “grist for the mill”.
This policy prevents new land being sold for “affordable housing” as revenue must always be optimised.
We still have our AAA credit rating though!

gooterz 8:12 pm 11 May 16

Some sections of Canberra really need a minimum height but these should be restricted to very small areas.
Otherwise we end up with both urban sprawl and much of expensive knockdown rebuild.
If only we could have an empty corridor that could be serviced by light rail. Ahem the current plans don’t provide for this.

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