Increased infrastructure investment needed to fast track housing growth

City of Newcastle is calling on the NSW Government to significantly increase investment into critical infrastructure to help councils meet their ambitious housing targets.

Newcastle was allocated the highest housing target in the Hunter region when the NSW Government released five-year housing targets for 43 local government areas in May 2024.

City of Newcastle’s Executive Director of Planning and Environment Michelle Bisson said the forecast modelling does not consider barriers in the market that affect completion rates.

“Over the past decade City of Newcastle has been laying the groundwork for future growth, planning for higher density living and diverse housing options, and creating frameworks to deliver more streamlined and efficient development assessments,” Ms Bisson said.

“This placed us on track to exceed the long-term housing forecasts under the NSW Government’s Hunter Regional Plan 2041.

“But the NSW Government revised our target last year, compressing 62% of the previous 20-year target into just five years, disproportionately front-loading delivery expectations.

“The methodology used is based on theoretical housing capacity modelling without considering the economic and environmental constraints impacting delivery.

“While local councils play a key role in facilitating housing growth through zoning, development assessment and infrastructure planning, they are not responsible for housing construction and have little control over delivery.

There are currently more than 2,000 dwellings in Newcastle that have been approved but not yet constructed. Council has no ability to make a developer commence construction.

“The pace and scale of housing delivery is primarily driven by market conditions, including financial viability, construction costs, labour costs, provision of infrastructure, workforce availability, and investor confidence.”

Newcastle’s target of 11,100 completed dwellings by 2029 almost doubles the previous forecast for delivery under the Hunter Regional Plan 2041.

This equates to an average of 2,220 dwellings needing to be built per year. Under the Hunter Regional Plan 2041 target, an average of 940 dwellings were required to be constructed per year.

During the peak construction periods of 2016 to 2018, and 2020 to 2021, City of Newcastle averaged approval of 1,364 and 1,129 dwellings per year respectively.

City of Newcastle is consistently ranked as the top performing council within the Hunter region and among the top-performing councils in all of NSW for development assessment and determination.

This is due in part to the implementation of its award-winning Accelerated Development Application System, which streamlines the assessment of routine and code-compliant applications to improve efficiency and reduce timeframes.

Councillors will consider a report at next week’s Council meeting that outlines the challenges being faced by City of Newcastle, opportunities to address housing delivery and the need for more equitable access to NSW Government funding.

“Current trends and market conditions indicate that achieving the revised 2029 target is extremely unlikely without a significant injection of funding for enabling infrastructure by the NSW Government,” Ms Bisson said.

“The best chance of achieving this target would be through the Broadmeadow Place Strategy, a shared vision developed in collaboration with the NSW Government that has the potential to deliver 20,000 new homes for 40,000 people.

“We will continue to advocate for the NSW Government to accelerate its investment in the infrastructure needed to enable development in this precinct.

“Consideration should also be given to the parameters around a range of infrastructure funding programs that City of Newcastle has been excluded from, or disadvantaged by. For example, there is more than half a billion in Government community infrastructure funding that only Sydney councils are eligible to receive. Newcastle and Lake Macquarie are not entitled to even one dollar of this.

“The report to Council recommends continued advocacy to the NSW Government for a funding model that recognises planning performance, as well as the reinstatement of the Mine Grouting Fund to unlock stalled development.

“We will continue to leverage every available tool to eliminate barriers and streamline delivery pathways, and will continue to work with the NSW Government to secure the long-term supply of well-located housing across the city.”