Sydney property developer Toplace, owned by Jean Nassif — currently on the run from an arrest warrant in NSW — is the dodgy developer from casting, the epitome of what many Australians think property development companies are.
It has constructed a number of substandard buildings that have left owners in limbo, unable to sell and worried they might collapse or never be finished. Its principals are alleged to have carried out a major fraud. A Liberal MP has alleged Nassif paid figures in his party to remove Liberal councillors in the Hills Shire Council and replace them with councillors who would approve Toplace projects. The firm has both Labor and Liberal connections.
Yesterday it was placed into administration, stranding many creditors and victims of its poor building standards.
The standard discourse around NIMBYism is of affluent property owners using regulatory processes to stifle property development because of the impact on their quality of life and property values, at the expense of the much larger cohort of people, usually younger and poorer, who would benefit from higher-density housing in areas with existing infrastructure near employment opportunities.
Even if the heavily promoted idea that too much regulation inhibits more housing supply is deeply flawed — developers and land owners have a strong incentive to withhold more housing supply to maximise its value, regardless of regulatory impediments — there’s certainly substance to the narrative, especially in more affluent areas with lower-density housing.
But less attention is paid to other factors that drive opposition to higher-density development. One is the belief that its benefits primarily accrue not to people needing housing, but to property developers who are adept at gaming, and distorting, the regulatory system to create windfall profits for themselves, including by corruptly influencing politicians at local and state levels to achieve their goals.
The spate of major developments found to be uninhabitable in Sydney as a result of poor building standards and corrupt certification practices fed this belief, particularly when builders and developers responsible for major defects would vanish and resurface in different companies, unencumbered by responsibility for the havoc they had caused.
It forced the previous NSW government to significantly toughen building standards and their enforcement, including the appointment of David Chandler as building commissioner — though not before unsuccessful efforts by Coalition figures to nobble Chandler or force him out. Chandler has proved a dynamo when it comes to going after dodgy developments, identifying developers and builders who provide quality buildings, and restoring a measure of trust for would-be apartment purchasers.
The collapse of Toplace will undo a large measure of that work.
A lesson that’s emerged over the 2010s has been that when people feel an economic system doesn’t serve the public interest or the interests of most citizens, but serves special interests instead, support for that system falls, and support for those who claim they want to disrupt that system rise.
That’s particularly the case for systems where benefits flow to the private sector. Voters of all stripes hate privatisation, seeing in it simply the transfer of government services and assets to private corporations that deliver poorer services and higher prices. Workers suffering years of stagnant wages object to industrial relations deregulation and corporate tax cuts. Voters who think market economics has undermined their social and economic standing support political outliers and extremists.
Critics of NIMBYism seem to have missed this lesson. Many Australians — rightly — see property development as a game in which the rules are heavily tilted in favour of developers, even those who manifestly fail to provide suitable housing. The collapse of an outfit like Toplace merely confirms the image of a rigged game, one in which even the purported beneficiaries of higher density development, apartment buyers, are left stranded and financially wrecked.
Having taken development in Sydney entirely out of the hands of local councils and handed it to expert panels, the NSW government — now led by raging anti-NIMBY Premier Chris Minns — owns the narrative of property development. Anything less than a substantial reform of property development regulation will leave people convinced it’s a rigged game in which the public interest is always the loser.
What would a fair future of property development look like? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
