Since the WA Inc days of the 1980s after which a Western Australian premier and an America’s Cup winner were jailed and when the state lost hundreds of millions of dollars in irregular skyscraper investments, government links to the property sector have been a touchy topic in Perth.

But with the government of Brian Burke and the dealings of late sailing impressario Alan Bond beyond living memory of many at The Urban Developer’s inaugural Perth Developer Symposium, delegates discuss the role of government in property development without too much trepidation.

Department of Planning, Lands and Heritage director general Anthony Kannis explains that WA’s Perth and Peel @ 3.5 million plan, released in 2018, set the western metropolis a target of 47 per cent urban infill by the time the city reached a population of 3.5 million.

“At the moment, I think we’re sitting between 30 and 35 per cent and there’s been that sort of gap for a few years so we need to overcome barriers ... to development, unfortunately,” he says of Perth and the adjoining Peel region that now have a combined population of more than 2.5 million.

“There are other factors such as viability; if you see where the infill is happening, it’s happening in the [affluent] western suburbs.

“We’ve got to actually identify ways where ... it is viable for infill to occur in the areas where people aren’t paying $1.5-million, $2-million, $3-million [for apartments], or $30-million for penthouses.”

At the event, on a sunny March day in the 45-storey Brookfield Place in central Perth, Kannis says the cost to government of servicing urban sprawl with health, transport and other infrastructure is about to reach a prohibitive threshold.

“We are now getting to the point where the land that we need to develop for greenfields is not the natural drained area; it is areas that are complex,” he says.

“Partly complicated by the fact the government owns all the utilities here—I think we’re probably all a bit thankful for that at this point in time compared to some other jurisdictions—but ultimately the government’s balance sheet ... has to deal with that.

“So the taxpayer’s going to see the impact of developing that land, which is more complex to develop and therefore there is the better opportunity to analyse the difference between the cost to the community of greenfields versus infill.”

Anthony Kannis at The Urban developer's inaugural Perth Development Symposium.

▲ Anthony Kannis says development on Perth’s fringe is about to reach a prohibitive threshold. Image: Twelfth Photography

Kannis says that planning reforms in recent years now allow development applications for infill to go through channels other than local government.

“The significant development pathway is one that is being used, [also] the development assessment panels pathway; they’re mechnisms where you can look at wider issues affecting the city, as opposed to localised issues,” he says.

“It doesn’t mean that people don’t have their say but certainly I think the decision-making is a bit more balanced.”

Urbis director Megan Gammon agrees Western Australia has a “really good statutory planning system”.

“This is where we boast in WA because our [approval] timeframes on paper are 98 to 120 days,” she says.

“They don’t all occur strictly within that [period] but I’d say most of our projects are approved within six months.

“We speak to our ... east coast colleagues, particularly [in] New South Wales and they complain about how long it takes to get approval; 12 months, 24 months is not uncommon.”

However, Gammon says WA falls short on strategic guidance for urban infill.

“Yes, we’ve got targets but we need a stronger vision for infill and how we’re going to deliver it,” she says.

“We’re in a position now where we’ve got some local governments performing well ... and then we’ve got other local governments which ... are nowhere close to their targets.”

Megan Gammon speaks at the inaugural Perth Developer Symposium.

▲ Megan Gammon says approval times in WA are the envy of the nation but more strategic guidance on urban infill is needed. Image: Twelfth Photography

She says that, with Perth and Peel likely to accommodate three million people by 2036, WA has a problem on its hands.

“We understand there’s a health check under way; the Department of Planning is leading this,” she says.

“I must admit I’m a bit sceptical of what this is going to entail.

“I’ve been told it’s not a full review, so exactly what is that going to deliver?”

Edge Visionary Living owner and director David Hillam says the WA government does have a role to play in stopping the sprawl but needs to start thinking counter-cyclically.

“In our view, they need to be doing less public sector spending or public sector construction because those projects where the government doesn’t have the same concern for what buildings cost; they’ve got a surplus, they’re building very expensive buildings, they’re sucking the trades out of the apartment sector,” he says.

“The government does say that they’re starting to slow down but all evidence is that they’re still pushing ahead with a lot of work which perhaps they should be looking to put on the back-burner.

“There’s a lot of subsidisation of urban sprawl ... if the [government] actually reflect[ed] on what they’re spending to go to [the outer northern suburb of] Two Rocks, they could actually be putting some of that money into the inner ring and making apartment living more attractive but also more affordable.”

David Hillam at The Urban Developer's inaugural Perth Developer Symposium.

▲ David Hillam says the WA government is subsidising sprawl and the Federal government is making five-storey buildings unviable. Image: Chris Thomson

Turning his attention to the Federal government, Hillam says he supports the Section J elements of the National Construction Code concerning sustainability.

“But my observation is that the panel that sits down and looks at the NCC every year, their mandate is to make apartments more expensive,” he quips.

“Fire systems in four-storey buildings; that’s got to change ... it’s contributing to capital costs, recurrent costs and it’s contrary to sustainable principles [because] you’re creating all this effort to make apartment buildings function.

“So, five-storey buildings are not viable any more.”

Also in relation to the federal government, H-U (Human Urban) director Kyle Jeavons says a recent GST ruling concerning co-living projects is a “terrible outcome”.

“In essence, if you considered that [your project] was short-stay accommodation, like a hotel, you’d get away without paying GST on construction and you get 5.5 per cent on revenue,” he says.

“But unfortunately it’s the other way.

“It’s probably going to be ... 5 per cent ... in the negative for co-living to work.”

Kyle Jeavons at the Perth Developer Symposium.

▲ Kyle Jeavons says a recent GST ruling is “terrible” for co-living projects. Image: Chris Thomson

On a related point, Sirona Urban project director Kate Stevenson says that, for student accomodation, if a developer has a university underpinning or underwriting 50 per cent of rooms then GST is also payable.

She says that if taxes and legislation were simplified then the difference between co-living, student accommodation and build-to-rent would evaporate.

“Developers should know their market, should know their customer, so the fact we’re still talking with local government and state government about how many car bays we should be putting in build-to-rent, that we should be putting in build-to-sell, it kind of blows my mind ... because we’re going to be stuck with a product we can’t sell if we don’t get it right,” she says.

“I’ve had a bit of an experience in the last couple of years where we had a local government and a state government disagreeing about car parking; one saying you haven’t got enough and another saying you’ve got too much.”

She says that as soon as developers are boxed into “talking about ratcheting different costs, taxes and really making it quite complex, we’ve lost sight of why we’re doing it, which is to provide homes for people to live in”.

Kate Stevenson at the Perth Developer Symposium.

▲ Kate Stevenson says WA developers should be freed to focus on providing homes for people. Image: Chris Thomson

Candidly summing up, Dan Sweet, chief property officer of Skyfields, Perth Airport’s development arm, tells the symposium what his ideal role for government in creating a better metropolis would be.

“I honestly hope it’s local, state and federal government getting together and saying: ‘If you’re sitting on high-value, dense land we’re going to smack you with a stick and if you’re doing things that are making land work then we’re gonna give you a carrot,’” he says.

Skyfields by Perth Airport chief property officer Dan Sweet at The Urban Developer's inaugural Perth Developer Symposium.

▲ Dan Sweet recommends the carrot and stick approach for Perth. Image: Twelfth Photography

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