The Property Council of Australia will review a proposed new affordable housing levy on Newcastle developments, but said greater government collaboration was needed to unlock much-needed housing supply.
Newcastle council endorsed its Affordable Housing Contribution Scheme Planning Proposal at its last meeting for 2023, voting to forward the planning proposal to the state government for Gateway determination.
The plan sets out how contributions for affordable housing would be levied on new development.
Larger developments in Stockton, two areas of Broadmeadow and the western corridor (Minmi, Fletcher and Maryland) will be subjected to a contribution rate of 3.3 to 5 per cent based on their size.
A 1 per cent contribution rate would also apply to all residential and mixed-use developments that result in an extra dwelling and more than 200 square metres of residential gross floor area in all other areas in the LGA.
Property Council of Australia's Hunter and Central Coast regional director Anita Hugo said the proposal would need to be coordinated with other government schemes.
"Industry is committed to finding solutions that will deliver affordable housing to market, and to work with local and state government to deliver incentives that will help get us there," Ms Hugo said.
"In this context it is important to understand how the various local and state schemes will work together to provide a cohesive and viable solution.
"If the various tiers of government don't find a way to coordinate planning changes, multiple layers or 'double-dipping' of taxes and charges occurs.
"This puts the viability of projects at risk, at a time when the market is already finding it incredibly difficult to get residential developments to stack up financially.
"The purpose of these efforts is to get affordable housing off the ground as soon as possible, and better coordination of state and local planning controls and developer contribution schemes will be an important step in making these projects viable.
"We'll be working through these proposals and will continue to advocate to government for changes that will maximise our chances of success in getting as many homes for everyone built as quickly as possible."
While the planning proposal was supported by a majority of Newcastle councillors, it drew condemnation from Liberal representatives.
Liberal councillor Callum Pull called the levy a "new tax... to the cost of housing in the city". He believed developers would pass on the additional costs to home buyers.
"This scheme is entirely something that is going to make the cost of housing more expensive," he said.
"When council then goes out into the market and goes to purchase these properties in terms of the monetary contribution... it means that first home buyers and new homeowners are going to be out there bidding against Newcastle council when they go to buy their home.
"This is a policy that brings us back to the idea of council-owned housing commission rather than real home ownership and and self determination."
But Labor councillor Elizabeth Adamczyk said the policy included provision for monetary contributions or in-kind dedication of dwellings or land.
She said developers may gift housing - such as a dwelling in a 100 unit apartment block - or contribute the equivalent money, and the council would then use that to work with community housing providers which would manage the dwellings.
"This is not about buying homes," she said.
"Council will not go out into the market and compete to buy apartments.
"This continued reductive argument that councillor Pull is putting forward, it reads like the young Liberals pitch for joining the party."
Cr Adamczyk said Newcastle had an identified need for more than 7000 social and affordable homes by 2041.
"The city in 2023 is now ranked in the top 10 local government areas in NSW with the highest housing need," she said.
"Seventy per cent of households are experiencing rental stress.
"When we allow housing to be treated only as an investment asset, as a commodity, wealth begets wealth.
"People are unable to get into the market unless they have parents for example or grandparents who are able to put their own homes up as equity or have wealth to put behind it.
"This is just not acceptable.
"The proposed developer contribution scheme is a means by which we can expect new development to contribute not just to housing in the city as it does but to affordable housing.
"This is critical social infrastructure and the value of that could not be understated or denied."
