Developers urge state takeover of council planning powers
A dispute over housing density in Sydney has broadened into a challenge to local government planning authority, with developer groups urging the NSW government to intervene where councils resist state housing targets.
Urban Taskforce Australia has identified Woollahra and Mosman councils as local authorities it says are obstructing higher-density plans. The group wants the state to consider removing planning powers or appointing an administrator to manage housing projects where councils do not support government policy.
Density plans divide state and local government
Woollahra Council is opposing the Minns government’s proposal for 9,400 additional homes around a revived train station in Sydney’s inner east. It has submitted a substantially smaller alternative.
Mosman Council has taken a similar approach to proposals for greater housing density in its harbourside area. Urban Taskforce said the alternative plans advanced by both councils were either unrealistic or did not satisfy the targets of the state’s low- and mid-rise housing policy.
The councils maintain that existing infrastructure cannot support the proposed number of new homes. The NSW government does not support Woollahra Council’s alternative, which Mayor Sarah Dixon has described as more sustainable for the area.
Developers link planning resistance to project finance
Urban Taskforce chief executive Tom Forrest raised the issue in a submission to the Productivity Commission’s housing supply inquiry.
The submission said anti-development attitudes among some councils were affecting project feasibility and making development finance more difficult to secure. It pointed to Woollahra’s campaign against rezoning around the proposed station and Mosman’s alternative master-planning process.
Forrest subsequently urged the NSW government to remove planning powers from councils such as Woollahra and Mosman or use the planning minister’s authority to appoint an administrator to take control of council housing projects.
The Business Council of Australia also supported transferring local planning functions to state governments where councils blocked housing delivery. Its submission said strong performance should be rewarded, while persistent failure to meet statutory obligations should trigger escalation, additional support and, when required, a transfer of assessment or decision-making functions.
The proposals were presented as recommendations from industry organisations seeking changes to housing approval processes.
Productivity Commission examines approval pathways
The Productivity Commission’s interim report, released in July, called for broader upzoning, including allowing three-storey homes on most residential land.
It invited submissions on how governments should respond to councils considered slow or obstructive in their approval processes. The report raised the possibility of linking grant funding to performance through a combination of incentives and sanctions.
The commission’s final report is due to be delivered to federal Treasurer Jim Chalmers by the end of March 2027.
For property developers and financiers, the dispute centres on both housing supply and the certainty required to assess projects. Urban Taskforce argues that resistance to state targets can undermine feasibility and access to finance, while the councils contend that additional housing must be matched by adequate infrastructure.
Dixon said the NSW government’s approach relied on penalties without sufficient incentives, highlighting the continuing disagreement over how density targets should be implemented and which level of government should control key planning decisions.
SOURCE ATTRIBUTION:
Based on reporting by Madeleine Bower. Source: supplied article.
