Anthony Albanese has given Sydney Local Council $2.6 million to review housing plans it has already rejected, but surrounding communities are not happy.
While the Inner West Council, which includes Marrickville voters, received a large donation, nearby Burwood Council received nothing.
Darcy Byrne, the Labor mayor of the Inner West and a former aide to Mr Albanese, said the $2.6 million was just a “small investment that will allow us to complete our local planning audits by the end of the year”.
It will be used as part of a $4.72 million masterplanned project for five ‘housing research precincts’ in Marrickville, Dulwich Hill, Ashfield, Croydon and Parramatta Road.
“The return on investment for putting extra staff into a council, specifically to get more housing supply, will be good. We can do it more quickly and effectively at a local level,” Mr Byrne told the Sydney Morning Herald.
But Burwood Mayor John Faker, who is also from the Labor Party, said his council had applied for funding for $1.4 million worth of projects but had received nothing.
“I am surprised, disappointed and find this tremendous negligence by the federal government downright unfair, especially for communities like ours who do the hard work,” he said.
Mr Faker said the lack of funding meant that programmes with the potential to deliver more than 8,000 homes would likely have to be delayed.
Darcy Byrne (pictured right), the mayor of the Inner West’s Labor and a former aide to Mr Albanese (pictured centre), said the $2.6 million was just a “small investment that will allow us to complete our local planning audits by the end of the year”.
Mr Albanese said the housing crisis, which has led to huge rent increases and an increasingly limited chance for people on average incomes to secure housing, must be addressed with better planning and higher population densities in major cities.
He said the problem has been neglected for too long and more housing needs to be built around train stations and transport corridors.
The prime minister also said the government “wants to help developers build rental housing, especially affordable housing.”
‘We must seize every opportunity to increase the housing supply.’
But his plan to build 1.2 million homes could trigger an insolvency crisis in the coming years, an expert told Daily Mail Australia.
Australia is facing a housing crisis as building permits lag far behind population growth fuelled by immigration.
New data from the Australian Bureau of Statistics shows local governments approved just 163,759 new homes in the year to May.
But this was still far short of Labor’s target of building 240,000 a year over five years, starting on July 1, as part of the Prime Minister’s goal of building 1.2 million homes.
Matthew Caddy, a partner at McGrathNicol in Melbourne with more than 25 years’ experience handling corporate insolvencies, says artificially inflating apartment construction is more likely to trigger an insolvency crisis in the coming years.
“If the government focuses on a certain area at a certain time, it can lead to a peak. But we also see that those peaks on the other side are often not managed well,” he said.
“You bring the demand forward and sometimes you create an artificial demand. On the other hand, it is not unusual that you then see an abnormal number of bankruptcies.”
The low number of building permits is also due to the fact that 487,820 migrants moved to Australia in the year to April, leaving a shortage of 78,422 homes. This figure is based on households with an average of 2.5 people.
But Burwood Mayor John Faker, who is also from the Labor Party, said his council had applied for $1.4 million in funding for projects but had received nothing.
Despite the housing shortage, developers in particular are struggling, with construction companies now accounting for more than a quarter of Australia’s bankrupt companies.
“Many feasibility studies are not profitable, which reduces construction activity,” Mr Caddy said.
‘The number of bankruptcies in the construction sector more often relates to construction projects with a higher density than to developments in the ground and construction sector.
‘With such projects, the margins are very small and when demand falls, everyone has to compete for what is available and that squeezes margins even further.’