cobran20

SMH: Private land to be seized for housing

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THE state government is rushing to prepare laws to create a development authority with sweeping powers to compulsorily acquire and rezone privately owned land for resale to developers.

With Sydney's population set to grow 40 per cent to 6 million in the next 25 years, the government has decided it needs a metropolitan development authority to buy privately owned land near rail and bus routes for medium- and high-density housing.

Legislation for the new authority, believed to be the first of its kind in Australia, will be introduced before June in an attempt to increase housing construction rates, which are the lowest on record even though the city's population is growing at the fastest rate since the 1960s.

Cabinet is still fine-tuning details, including the contentious issue of the amount of compensation paid to landowners whose properties are compulsorily acquired by the government for resale.

While government departments such as the Roads and Traffic Authority have the power to compulsorily acquire land, they can do so only when it is used for a public purpose.

In contrast, the metropolitan development authority would allow compulsory acquisition of land for private companies to construct and sell housing for profit.

A spokesman for the Planning Minister, Tony Kelly, said the move was about ''driving urban renewal at key strategic sites throughout Sydney''.

While the proposal is likely to be contentious, developer groups say it is the only practical way to meet the housing construction targets contained in the principal planning document for Sydney, the Metropolitan Strategy.

It says Sydney needs 26,000 new homes a year but only 14,000 are being built, a shortfall developers say is largely due to the difficulty in obtaining suitable sites.

As well as acquiring land, the authority will decide which areas should be included in new areas for housing and employment and then ''partner with councils'' to rezone them.

The plan for the authority follows the release of draft legislation two years ago by the former planning minister Frank Sartor to give the government powers to compulsorily acquire land for urban renewal where there was a ''net public benefit''.

The proposal lapsed after a public backlash, and developer bodies are keen to avoid this happening again.

One lobby group, the Urban Taskforce, wants the government to pass on to landowners the full increase in value that results from rezoning.

''Landholder compensation must be valued based on the rezoned value of the land following the granting of the final development approval in connection with the urban renewal project,'' the taskforce chief executive, Aaron Gadiel, said in a letter to Mr Kelly.

He said the government should look at the British model where, for 10 years after compulsory acquisition, a landowner is entitled to claim compensation for any increased value of the land from rezoning or other planning approval.

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Operation Seek and Pilfer.

Instead of confiscating people's homes governments should INVEST IN PUBLIC INFRASTRUCTURE YOU FREAKING HACKS!

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A land tax on undeveloped land zoned for residential purposes would have similar effect, without the government spending money.

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This could be a very significant development.

If it is desired to increase the population of our cities by such a large amount, then compulsory acquisition is needed.

However I don't trust these clowns to get it right.

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I see it as something that could work, but...

I wouldn't trust the current NSW state government to get this right with their track record for corruption and dealing with developers while promising and then continually canning infrastructure.

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It was bound to happen, the idiots in Government seem to have just woken up to the fact that unless they address the housing issue, then there much loves plans to hugely boast immigration wont work.

How this will play out re our RE bubble, I suppose it depends on how far the Government takes it. 

But lets all understand this, our Government couldn't give a flying F$ck about me or you (aka citizen Joe Average), and how we have been Royally screwed in terms of the cost of housing. All they are concerned with is enabling much larger immigration, basically because of the economic inertia it generates that forces the economy to grow.

Edited by Silver Surfer

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I am also concerned about the land being "sold to developers".

By my reading of it, the government actually requires a builder, not a developer. Govt grabs all the land, govts declares its new purpose (eg highrise) and then it gets sold off to a developer. For what purpose? Better call for several quotes for construction and then select the best quote. I see no benefit in selling it to developers.

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I am also concerned about the land being "sold to developers".

By my reading of it, the government actually requires a builder, not a developer. Govt grabs all the land, govts declares its new purpose (eg highrise) and then it gets sold off to a developer. For what purpose? Better call for several quotes for construction and then select the best quote. I see no benefit in selling it to developers.

There is no intention of making housing cheaper, just making more available.

Edited by Silver Surfer

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I'm hoping this is just an ambit claim to get changes in zoning through.

I think it reasonable that the state govt can override a lot of the obstructive local council planning restrictions, in fact I hope they do. It's too hard to redevelop in many established suburbs, and the rules vary from council to council. You also have the ridiculous situation of zero medium to high density housing around several established railway stations in Sydney because medium density is prohibited by the local council. I see a great example of this when I go for a bike ride down to Como in Sydney's south, there's a station there surrounded only by low density detached houses, no shops, no units, no townhouses, a total waste of good infrastructure.

But the state forcibly acquiring private property on behalf of wealthy connected private interests is completely unnaceptable, a real breach of property rights, and quite frankly completely unneeded to get higher density happening.

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With Sydney's population set to grow 40 per cent to 6 million in the next 25 years, the government has decided it needs a metropolitan development authority to buy privately owned land near rail and bus routes for medium- and high-density housing.

Really? What do they plan to do for a living?

The head of the Property Council, Ken Morrison, said the authority was vital if Sydney was going to house its swelling population as the vast tracts of industrial land used in the past for development had largely gone.

Exactly, what does Sydney plan to do for a living?

''It's the same as acquiring land for a road or a railway.''

Funny, I thought it was for "profit". So in theory the Grannies could buy there homes back from the developers?

Edited by wulfgar

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Whilst this could be beneficial to the overall situation, in theory, in practice this will just be another way that the government can help its cronie developer friends turn a buck.

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Really? What do they plan to do for a living?

Exactly, what does Sydney plan to do for a living?

Hey wulfie, don't you read Battellino speaches?

the commodity boom will last for very long time and I believe everyone in Australia should live and eat on it.

I also guess politician and some RBA members think that when the boom will slow/stop or bust we will think about what to do then...:shocking:

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Legislation for the new authority, believed to be the first of its kind in Australia, will be introduced before June in an attempt to increase housing construction rates, which are the lowest on record

More housing is a great thing -- build, build, build. I'm all for it!!

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More housing is a great thing -- build, build, build. I'm all for it!!

Exactly - doesn't matter how or why.

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Erm, why do they have to confiscate the land to give (oh, i'm sorry "sell" for a pittance) to developers? Why not just rezone the land as residential. It will be worth so much that the current owners will sell it in a heartbeat. Doubly screwing the landowner. Giving him/her no choice in the matter and then reaping all the profits (well, funnelling them into corrupt pockets). Absurd.

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A land tax on undeveloped land zoned for residential purposes would have similar effect, without the government spending money.

Exactly. Even a uniform land tax based on land value has the same effect.

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I do think that zoning should not be the responsibility of local councils. Local councils do not have responsibility for infrastructure like: hospitals, schools, trains, etc... On the other hand, placing this responsibility on a corrupt state government to indulge developers is not good either. China confiscates land for development purposes, and we should not follow their path for non-infrastructure purposes. What happens when a new train line is built? people would see their homes under threat and oppose new public transport: not healthy. It can be done voluntarily, whenever an appropriate property is up for sale, it is designated to be replaced with medium density housing.

But needless to say, the property bubble is now deflating (money supply tightening, money demand falling), and vacant properties held by speculators will pop up like weeds.

Recall the Ku-ring-gai Residents' Alliance. The’d be trembling and shaking. Plus an old news article from the North Shore Times about them.

[sarcasm] If Australian cities run out of land, we could always build some islands off the coast like Dubai and hope that the ocean water levels don't rise. [/sarcasm]

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I would need to see far more detail before I could make a considered response, but;

I don't like the tone of the notion.

Where's the democratic process in determining the nature of freehold title.

I would suggest there may eventuate a court-case in governments interfering in the change of title.

I'm well aware that government have always reserved the right to reclaim land and buildings for infrastructure projects such as roads, or public words, with associated compensation paid to the owners, usually at way below current values.

But this is a whole new concept.

This is a commercial venture involving a government body, buying at well reduced prices and selling at increased prices to developers.

Its immoral.

Who retains ownership of the land?

Does the government dictate the style of development?

Does the developer retain profits made from the development?

Is there limits set on the density?

Can government intervene at any stage, if the development does not suit their requirements?

I would doubt too many developers would enter into an arrangement where there expenditure could suddenly be confiscated by the government, seeing them lose vast amounts of money on their development costs.

Like I said, the devil is in the detail, but I couldn't condone it being done this way.

Surely there is room for negotiation with current land-holders to obtain an option on purchasing by developers, with Government subsidies or grants for purchase.

This smacks of outright socialism.

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I wouldn't call it socialism solomon. With socialism the the state would retain ownership and do the development itself. I think this proposal is more like corruption or kleptocracy, the state would use it's power to advantage a connected wealthy elite, at the expense of ordinary citizens.

I really think it's quite different to aquiring land for public infrastructure, like a railroad etc, where there is a clear and identifiable public good, and those benefits are shared by the public. I think if implemented and used as proposed, I imagine some quite serious legal challenges would occur. Agree with Urchin, rezoning is all that's needed. There's ample historical evidence in all of our cities to support that.

As I said earlier, I hope it's just an outrageous ambit claim put up to get what that they really want through.

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Rezoning or releasing more land will create too much supply and drive prices down. Taxing unused land will deter much financial party support. The gubberment is left with no choice but to aquire the land of holders that don't donate to their party - for an amount determined by the government of course.

You have to factor into all of this that the NSW state government is more or less insolvent and they can't risk any potential revenue on building public housing but, by the same token, if cheaper accomodation isn't built, they will face a massive amount of LLs unable to procure rent because they don't have a police force large enough to remove the tenants - nor do they really want to go down that path.

Ultimately, from the POV of proberty bears, this can only be good news. More land is being utilized for dense/cheaper housing construction. By hook or by crook, who gives a sh*t. Australias housing bubble has to end.

Edited by ummester

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Section 51(xxxi) of the Australian Constitution

From Wikipedia, the free encyclopedia

Section 51(xxxi) of the Australian Constitution is a subsection of Section 51 of the Australian Constitution providing that the Commonwealth has the power to make laws with respect to "the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws." It is both a power and a constitutional guarantee of just compensation for property rights contingent on its exercise.

The language of s 51(xxxi) was adapted from the final words of the Fifth Amendment to the United States Constitution. Unlike the American provision, however, it is primarily a grant of Commonwealth law-making power. It is clear that the requirement of "just terms" does not affect the State Parliaments. In Grace Bros Pty Ltd v The Commonwealth (1946) Justice Dixon stated that the inclusion of the condition was to "prevent arbitrary exercises of the power at the expense of a State or a subject."

The interpretation of the terms "acquisition" and "just terms" by the High Court of Australia have had the effect, however, of limiting its protection of property rights. Moreover, it operates at any time the Commonwealth makes a compulsory acquisition of property. As such, it is a contingent guarantee rather than a general constitutional right or freedom to enjoy property rights.

The Commonwealth may only acquire property on just terms for a "purpose in respect of which the Parliament has power to make laws". This means that every law supported by s 51(xxxi) must also be supported by at least one additional legislative power.

The effect of the section was famously the subject of the iconic Australian film The Castle.

Government acting as enforcers for developers to acquire prime real estate. I wonder if they drive around together picking likely redevelopment locations. ICAC will be flat out.

All aboard! The 2010 gravy train is about to depart.

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i'm in favour if there are tight controls around it and it's just basically forcing landbankers to release land. if it's forcing people out of their family homes, then not so keen.

i see so many decent parcels of land in urban brisbane that are sitting around doing nothing, and have been for years and years.

eg my drive to work

1. an old petrol station (i know, since when do petrol stations close?) that could be turned into 10 units and fit the density of the area. perhaps 16, or more even

2. a large block of land closer to the city that's cleared, fenced and has had a sign up with artist impressions of commercial leases for years - the signs so faded you can't really read it. it promises a 3-4 story complex. it could easily be a 6 story residential tower, the one across the road is. the one across the rd is 70's, so if the only way is up it should be 10 floors.

3. a row of 2 story commercial places (3 or 4) that have been vacant and for lease for ~2 years, even closer to the city. could be renovated into 6 - 8, groovy warehouse style places or combined with neighbouring property to create a massive 20 storey residential tower and fit in with the area.

these are the sorts of places i would like to see used for residential, they're not being used for commercial, since there is too much commercial in brisneyland. of course finance would need to be secured, and that is hard at the moment.

nsw's plans need to provide financing for their plan or it's just housing in the sky.

ps - i don't trust any governemnt to manage this sort of stuff - but there must be some sort of solution.

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cobran, I would join in a heartbeat, but too often these days, it has too much of a socialist leaning to it.

I think a land tax that does not tax away all the rent on raw land is the best answer, and will allow a transition. I think the existing 2% land tax in NSW if it was rolled out to all land would be enough to set the wheels in motion to a more efficient tax system.

Our governments already believe in georgism when it comes to business; taxi licenses, fishing licenses, mineral licenses, land tax are all examples, but for the individual they neglect to apply the same reasoning.

A good article on the man and the neo classical economists response to him:

http://homepage.ntlworld.com/janusg/coe/cofe01.htm

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i'm in favour if there are tight controls around it and it's just basically forcing landbankers to release land. if it's forcing people out of their family homes, then not so keen.

From the story

With Sydney's population set to grow 40 per cent to 6 million in the next 25 years, the government has decided it needs a metropolitan development authority to buy privately owned land near rail and bus routes for medium- and high-density housing.

Sounds like they want to force people to sell up their homes, or small businesses, not get hoarders to release greenfield sites, unless they are redefining the concept of hoarding to include 'refusing to sell to developers'. If granny want's to stay in her detached house that happens to be near at train station, she should be under no obligation to sell if she doesn't want to.

On the flip side, I don't think granny should be able to prevent neighbours from redeveloping by complaining to council, because it will 'change the character' of the sleepy little suburb she moved to 50 yrs ago. A good friend of mine is a town planner, and he mentions nimbyism as a major impediment to a lot of redevelopment proceeding, adding delays and expense, and even preventing good development from going ahead. All because a tiny minority of serial complainers have a voice out of proportion to their numbers.

He also mentioned that there are plans to change the strata rules, to allow redevelopment to happen on a 80or90% majority vote of the strata owners. At the moment I believe it's a 100% vote required to redevelop a strata titled site, which of course means it hardly ever happens as invariably someone doesn't agree, and again has stopped many worthwhile projects going ahead. I think this would be a good change, as it would allow for the renewal of lots of those crappy old 3 story walk ups apartment blocks, or commercial sites, many of which are reaching their use buy date, or are just plain old eyesores.

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