Proposed increases to developer charges in West Dapto will push up the price of new homes: UDIA and Property Council of Australia

Wollongong City Council recently exhibited its Draft West Dapto Development Contributions Plan (2020), which will be debated next week.

A total of 33 submissions were received by council during the exhibition period.

Among them were the Urban Development Institute of Australia and the Property Council of Australia, who urged council to reconsider a proposed 17 per cent increase in charges on new homes in West Dapto.

They say developers in the Illawarra are facing a huge jump in costs if council proceeds with the Draft Plan.

The plan proposes to charge developers $52,950 per lot.

This is an increase of more than 17 per cent on current charges, which have already risen by 50 per cent over the past two years.

"Since December 31, 2017, almost $23,000 in extra council charges have been added to the cost of a new home," they said.

Comparatively, developers have to pay $15,467 per home at Calderwood.

UDIA regional manager Keiran Thomas said these extra charges will inevitably be passed on in the price of a new home.

"At a time when house prices are finally starting to calm down, council wants new home buyers in West Dapto to pay thousands more," he said.

"This has the potential to kill new projects, and put a home further out of reach for the next generation in the Illawarra.

"We think there are significant savings council could find in their infrastructure plans, like realigning roads, shortening bridges and removing unnecessary traffic light intersections.

"Our initial analysis suggests more than $200 million, or $10,000 per lot could be saved with some sensible revisions."

Property Council Illawarra regional director Michelle Guido agreed, saying housing needed to be more affordable for the people of Wollongong.

"As our region continues to grow, it is vital that we work together to boost housing supply and look at more innovative and efficient ways to deliver services and infrastructure to support this growth," she said.

Council will consider the draft plan at next Monday's meeting.

Council staff have recommended the draft plan be submitted to the Independent Pricing and Regulatory Tribunal, along with copies of all submissions received for independent review.

They've also recommended a report be presented back to council with the IPART recommendations and NSW Minister for Planning's advice in relation to the finalisation of the 2020 Plan.

The Draft 2020 Plan is the biennial review of the current adopted West Dapto Section 94 Development Contributions Plan (2017).

Council's report said the draft plan is a key document for the Urban Release Area, providing the mechanism to collect development contributions to fund essential local infrastructure required to support new development.

"The current 2017 Plan assisted in addressing the risk associated with a shortfall in funding essential local infrastructure to support West Dapto, which was estimated by IPART at the time of their 2016 report to be $428 million," the report said.

"Finalising this Draft 2020 Plan will further address the risk by ensuring that the full cost of local infrastructure eligible to be funded under Section 7.11 can be funded through development contributions and/or Local Infrastructure Growth Scheme funding after July 1, 2020."

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