Navigating Bureaucracy: How Sydney’s Development Approval Process Exacerbates the Housing Crisis

Sydney's Development Approval Process

Sydney, an iconic city of stunning beauty and global influence, is wrestling with a severe housing crisis marked by skyrocketing prices and a dire shortage of available homes. While the factors fueling this crisis are complex, the city’s development application (DA) process is a significant yet often overlooked contributor.

What is a Development Application?

A development application is a formal request for permission to construct, renovate, or demolish structures. Essentially, it’s the gateway to changing how land is used in Sydney. The DA process is administered by local councils, sometimes with state-level involvement for larger projects, ensuring new developments meet planning regulations, environmental standards, and community expectations.

A Maze of Complexity

Despite being well-intentioned, Sydney’s DA process has amassed a reputation for being notoriously complex, slow, and unpredictable. Let’s break down why it’s an impediment:

  • Overly Complicated Rules: Local Environmental Plans (LEPs) and Development Control Plans (DCPs), the regulatory blueprints that DAs must comply with, are often convoluted and open to broad interpretation. Developers and builders spend significant time and money deciphering these documents and trying to align proposals to vague provisions.
  • Extended Timelines: DAs for even modest projects can languish for months within council systems. Larger projects may take years to receive a decision. These delays translate into higher costs, discouraging potential developers, and reducing the supply of new housing stock.
  • Uncertainty: The subjective nature of many planning rules and the potential for shifting community objections contribute to uncertainty throughout the process. Developers may invest heavily into a project only to face unforeseen hurdles or outright rejection.

Housing Supply Consequences

In 2023, just 32,600 new dwellings were completed in Sydney. Compared to 2018 when 56,300 swellings were delivered, it is clear that something is wrong with our current system.  

These hurdles within the development approval system have serious repercussions for the city’s housing landscape: 

  • Discouraged Development: The complicated, costly, and risky approval process discourages developers, especially smaller-scale builders who are crucial for increasing diversity in the housing market. Fewer projects mean less added supply.
  • Increased Costs:  Bureaucratic delays and the risk of project alterations due to council feedback inflate project costs. These expenses are ultimately passed on to homebuyers or renters, adding to affordability woes.
  • Stagnant Housing Choices: The focus on preserving existing neighbourhood character within many planning rules often restricts innovative housing types, such as medium-density developments. This limits the range of housing options available, catering to a narrower segment of buyers.

The Way Forward

Sydney cannot continue with a development application process that works against the pressing need for more affordable housing. Changes are needed to make the system better:

Simplify Regulations:  Planning codes should be written in clear, concise language, reducing ambiguity, potential conflict and misinterpretation.

Streamline Process:  Set and enforce strict timelines for DA assessment. Create designated fast-tracking processes for straightforward projects.

Improve Transparency: Ensure residents can access easy-to-understand information about proposed developments, promoting constructive participation.

Promote Density:  Shift planning rules to favour appropriately located medium-density housing, increasing supply and choice.

With prices continuing to climb and a large shortage of available homes, action needs to be taken to address Sydney’s housing crisis. Whilst improving the development process will not immediately rectify the shortcomings of Sydney’s property, it can encourage developers to start projects without the fear of a costly and drawn-out approval process.

By simplifying regulations, streamlining the process, and rezoning desirable hubs to promote density, we can begin to tackle this crisis and ensure that living in Sydney remains a viable option for all in years to come.

About Rose & Jones Buyers Agents

Rose & Jones has been helping clients find and purchase properties in Sydney, The Gold Coast, and the Northern Rivers since 1998. A renowned property buyers agency across residential, commercial and industrial sectors, every one of our property experts meets our high standards, so you won’t have to compromise yours. With access to a wide network of off-market properties, our team can help you find the perfect property. Also offering property management services and investment advice, make Rose & Jones your go-to when it comes to real estate in New South Wales and Queensland.

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