Regulations Add to High Costs of Housing

The Urban Development Institute of Australia has long been concerned about the high costs of housing throughout Australia; in fact this was the key issue we focussed on in our discussions with both the Federal Government and the opposition during the lead-up to the 2013 Federal election.

In the Northern Territory the costs of housing are particularly high, which when combined with the generally high costs of other items we use in our daily lives, create a situation where some people are unable to afford to live here.  With costs continuing to rise, this problem will only get worse.

There are many factors which influence the cost of housing, however one area that is rarely discussed is the rising cost of compliance and the now fanatical over-regulation of the construction industry.

This bureaucracy exists in a multitude of layers.  Every aspect of the construction industry is now covered by an “Australian Standard”.  In fact there are now over 6000 Australian Standards.  At any one time hundreds of standards are being developed, upgraded or extended.  Those questioning why there are more traffic control lollipop girls than there are road construction workers need to carefully read the traffic management Australian Standard to understand how ridiculous the requirements have become.

In addition, construction must comply with the Building Code of Australia (BCA).  Each year this monumental publication expands at an ever-increasing rate and its scope continues to expand.  Anyone wondering why it costs $2,500 to employ a Building Certifier for the construction of a $5,000 carport should download a copy of the BCA to understand just how complicated the certifier’s role is.

But bureaucratic controls do not end there.  The Disability Discrimination Act governs access to buildings, disabled toilets and the like.  This legislation requires attention to such matters as the provision of Braille guidance to access an airport control tower.  The development industry considers the latest updates of this Act to be unnecessarily complex because they add a staggering cost to any new building.  They also ensure that most unique architectural designs can no longer be built.

Work Health and Safety Acts and safety issues which must be considered in design add further complexity.  The bureaucratic requirements of Work Health and Safety legislation result in very substantial productivity losses for the industry, in addition to teaching a whole generation of trade workers that they no longer need to think for themselves about personal safety.

Two other areas of particular concern for the development industry are duplication within the environmental approval process, and attempts to add new noise metrics to the existing regime governing development around airports.

UDIA is fully supportive of the goals of the Environment Protection and Biodiversity Conservation (EPBC) Act, and we believe that if applied efficiently this legislation can contribute towards achieving the triple bottom line of sustainability.  However, around the nation our members have firsthand experience of some of the problems associated with the application of the Act.

The current system in which the EPBC Act is invoked late in the planning process and State and Federal processes are routinely duplicated is unsustainable.  Duplication of State and Federal environmental processes results in significant costs and delays for development projects.  A failure to streamline the process will exacerbate housing delivery and adversely affect housing affordability.

UDIA and the development industry have warmly welcomed the Government’s decision to implement a ‘one stop shop’ for environmental approvals by devolving federal approval responsibilities to the approval process in each state and territory.  This decision is likely to improve approval times and reduce costs for both developers and the government, whilst maintaining the objectives of the EPBC Act. 

Has a tipping point been reached where there are people engaged in developing and administering rules than there are people doing real work?  The industry believes that if we have not already reached this point, then we must be getting close to it.

Excessive and unnecessary regulation and red tape are significant contributors to the cost of new homes, and also act as significant barriers to new investment.  UDIA welcomes the Federal Government’s recent commitment to reducing red tape and regulatory complexity, and looks forward to working with the Government to reduce the burden of red tape and regulation on the housing industry.

Perhaps as our politicians face the New Year and wonder how they can cut red tape, they should start by ensuring that no new regulation can be enacted without two existing regulations being revoked.