Anthony Albanese has given his local Sydney council $2.6 million to revamp housing plans it had already rejected, but neighbouring councils are not happy.
While Inner West Council, which includes the Prime Minister’s Marrickville electorate, received a large helping hand, nearby Burwood Council received nothing.
Darcy Byrne, Labour mayor of the Inner West and a former member of Albanese’s staff, said the $2.6m was only a “small investment that will enable us to complete our local planning checks by the end of the year”.
It will be used as part of a $4.72 million masterplan project for five “housing research areas” in Marrickville, Dulwich Hill, Ashfield, Croydon and Parramatta Road.
“The return on investment in hiring additional staff to a council specifically to increase housing supply will be good. We can do it faster and more effectively at a local level,” Byrne told the The Sydney Morning Herald.
But Burwood Mayor John Faker, who is also a Labour candidate, said his council had sought funding for $1.4m of the project but had received nothing.
“I am shocked, disappointed and find this massive oversight by the federal government extremely unfair, particularly for communities like ours that are doing the heavy lifting,” he said.
Faker said the lack of funding would mean programs that had the potential to build more than 8,000 homes would likely have to slow down.
Darcy Byrne (pictured right), Labour mayor of the Inner West and former member of Albanese’s staff (pictured centre), said the $2.6 million was just a “small investment that will enable us to complete our local planning controls by the end of the year”.
Mr Albanese said the housing crisis, which has led to massive rent increases and a decreasing ability of people on average incomes to afford housing, needs to be addressed with better planning and higher densities in major cities.
He said the issue had been neglected for too long and there needed to be more housing around train stations and transport corridors.
The Prime Minister also said the government wants to “help developers build rental housing, particularly affordable housing.”
“We need to take advantage of every opportunity to increase the housing supply.”
But its plan to build 1.2 million homes could trigger an insolvency crisis in the coming years, an expert told Daily Mail Australia.
Australia has a housing crisis as building approvals lag far behind immigration-driven population growth.
Local councils and state governments approved just 163,759 new dwellings in the year to May, new data from the Australian Bureau of Statistics showed.
But this figure is well below Labour’s target of building 240,000 homes a year for five years, starting on 1 July, as part of the Prime Minister’s goal of building 1.2 million homes.
Matthew Caddy, a Melbourne-based partner at McGrathNicol with more than 25 years’ experience handling corporate insolvencies, said artificially boosting apartment construction was more likely to trigger an insolvency crisis in the coming years.
“If the government focuses on a particular area at a particular time, that can lead to an increase, but we also see that, in the wake of those increases, they are usually not well managed on the other side,” he said.
“If you anticipate demand, you sometimes create it artificially; on the other hand, it is not uncommon to then see an abnormal amount of insolvencies.”
The low level of building approvals has also been caused by 487,820 migrants moving to Australia in the year to April, leaving a shortfall of 78,422 homes – a figure based on households with an average of 2.5 people.
But Burwood Mayor John Faker, who is also a Labour candidate, said his council had sought funding for $1.4m of the project but had received nothing.
Despite the housing shortage, apartment developers in particular are struggling: construction companies now account for more than a quarter of failed businesses in Australia.
“Many feasibility projects are not profitable, which has led to a slowdown in construction activity,” Caddy said.
‘Most insolvencies in the construction sector relate to higher-density construction projects, rather than land and building developments.
“In these projects, margins are very tight and when there is reduced demand, everyone competes for what is available and that further reduces margins.”