This NSW housing authority has been inundated with proposals. Only two have been approved

Only two development proposals fast-tracked by the NSW government’s divisive Housing Delivery Authority have been approved, one year after it started taking applications to accelerate construction of major apartment complexes.

Planning Minister Paul Scully told a budget estimates hearing on Wednesday that his department had approved the proposals after the three-person authority recommended they be declared as “state significant”, sending them on a faster assessment pathway that bypasses local councils.

The first was for a $110 million complex of 106 units in Gordon. The second was an approval for early construction works to prepare a site on Danks Street in Waterloo for a mixed-use precinct of 850 build-to-rent units in nine buildings, which is subject to a separate development application.

Scully denied that the rate of progress was disappointing as NSW faces an uphill battle to deliver 377,000 new homes by 2029 under the National Housing Accord – about 75,000 dwellings a year.

Scully said the Gordon and Waterloo development applications were assessed and approved in an average of 184 days, which he said was “quite quick given that’s the end-to-end time frame”.

“I’m not disappointed in the approval process,” he said.

However, he was disappointed developers were taking too long to submit environmental statements to enable their plans to proceed, saying: “The department, in fairness to them, can only approve what’s in front of them.”

Developers had submitted 1070 expressions of interest for large residential developments since the three-person Housing Delivery Authority started accepting applications last January.

Of those, 624 projects have been assessed and 308 have been declared as state significant developments, representing 102,000 potential homes, to be decided by the state government.

Scully told the hearing 18,000 dwellings in transport-oriented development (TOD) zones were in the planning pipeline, nearly 1800 of which had been approved. There had also been 480 development applications in areas covered by the low- to mid-rise policy, about 75 of which had been approved.

Industry analysis suggests NSW completed 42,000 in the first year of the Housing Accord period, and is on track to fall nearly 157,000 dwellings short of its five-year target.

Scully rejected opposition housing spokesman Chris Rath’s suggestion the shortfall of new homes suggested the Minns government’s reforms aimed at boosting housing were a “colossal failure”.

“You’re saying we’re 40 per cent behind a target that’s not done for another 2.5 years,” he said.

But Scully conceded: “I would prefer to be much further advanced.”

Scully said Labor had inherited a “confused and confusing” planning system from the former Coalition state government, and its planning system reforms had contributed to an increase in construction commencements, and a decrease in approval time frames for residential projects.

“We’ve had 75,000 construction commencements, which is up 10 per cent in the past 12 months. They’re rising, which is a good sign. There’s a lag because it takes time to actually build something.”

Rath questioned whether “all the rezonings in the world” would help the state meet its housing targets when developments in parts of Sydney were “stalling because they are no longer feasible”.

Scully said it was wrong to conclude that the housing sector was “a homogenous sector”, and the government was finding that “feasibility differs across projects and across geography” in Sydney.

“What we’re seeing is areas that have not done any of the heavy lifting when it came to housing over the past decade or so are slightly more feasible than other areas. I think that goes to pent-up demand, it goes to restricted supply, all those things that have had a price impact.

“The price mechanism, unfortunately, is working, but it’s not working in the interests of people who are looking to rent or to buy a home.”

Scully said complaints about the state’s planning system in constraining housing supply, before the Labor’s widespread reforms, missed factors including surging land values across Sydney in the past decade, interest rates, access to finance, labour costs and shortages, and macroeconomic conditions.

Scully also faced questions about the decision by the state government’s own development arm, Landcom, to abandon plans to build up to 1500 homes across three projects on Sydney’s outskirts.

Rath told Scully he was “flabbergasted you couldn’t agree among your own agencies on the value of this land”, which was owned by another state government agency, the Office of Strategic Lands.

Scully insisted the decision was not about feasibility.

“Landcom made an offer [to buy the land], that offer was not accepted, there were negotiations over a period of time. At some point, you either decide to proceed and pay a price you wouldn’t want to pay, or you decide to move into other priorities.

“You can describe it as Landcom pulling up stumps on western Sydney – it was anything but.”

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