I have to admit, I’d never heard of this guy before. But boy, is he a breath of fresh air! He's basically revealing why real estate is so expensive… Something that anyone who has been involved in development has experienced first hand.
But who is this Bob Day?
Bob Day, one of the senate newbies, has used his maiden speech to call out government corruption, and the tyranny of ridiculous planning laws. It was a barn-burner and it could change everything.
The new senate looks like it’s going to be a barrel of monkeys, maybe literally. But it finally seems we might have a pollie who gets housing, and just might have the balls to do something about.
Meet South Australian Senator Bob Day. He’s from the Family First Party. I don’t really know what they’re about. I guess they’re pro-families, but you know, who isn’t?
(I’ve been thinking about starting a pro-anti-pollie party…) Huh?
Anyway, Senators usually use their first speech in parliament to lay out the issues that are most important to them, and the issues they plan to be going hard on.
And so what’s Bob Day about?
Housing.
More specifically, how corrupt planning regimes and bureaucratic idiocy keeps land costs up, and housing out of the reach of young Australians.
And he actually knows what he’s talking about. He used to be a builder, and his story here about the rigmarole he went through trying to develop a block of units is cracker.
But let’s take a look at a bit of his maiden speech. After a few pleasantries, he cuts to the chase:
…The single most important factor affecting housing affordability has been land. In no other area of the economy has the interference of government been so pronounced, so unsuccessful in its implementation and so catastrophic in its effect.
That’s it Bob. Kick those complacent pollies square in the nuts.
The deliberate policy to limit urban growth—that is, limiting the supply of land on the urban fringes of our cities by introducing urban growth boundaries and, at the same time, promoting urban densification—has been a disaster socially, economically and environmentally. And it was all designed for one purpose: to make money.
This is where he really got my attention. Was he really going to call a spade a spade and expose the corruption at the heart of our planning laws? Yep.
Land developers, in cahoots with state government land management agencies, have made billions of dollars and, at the same time, ruined the home ownership prospects of a whole generation of young Australians. If there is one commodity Australia is not short of, it is land. Yet, to buy a block of land on which to build their first home, young couples are forced to camp out overnight by rent-seeking land developers and their state government cronies for the privilege of paying an exorbitant amount of money for a measly one-tenth of an acre of former farmland—land that developers and state governments between them managed to convert from $10,000 a hectare to $1 million a hectare. It leaves all other forms of price gouging in its wake.
Ouch. But he’s got it right. By locking up land (and making it harder to develop the existing city) we’re tying our kids to mountains of debt. And he’s calling the pollies out on their complacency.
When challenged about this and asked, ‘Why are you letting this happen?’, a senior state government politician admitted, ‘We need the money.’
It is why politicians are so easily captured and conned by the constant procession of rent-seeking crony capitalists whose job it is to enrich one group of Australians—themselves—at the expense of another: first homebuyers. Rent seekers are the scourge of business and politics. They tarnish the political process, distort the market and, in the case of land development, distort the entire economy.
Bang-flippin-on. Crony-capitalism is the biggest threat to freedom, prosperity and meat-pies there is. To hear a politician call it out is a breath of fresh air.
But what I really loved about Day’s speech is how he jumped from the macro picture, to street-level view…
The second barrier is the proliferation of federal, state and local government planning and building controls, which add cost, confusion and delay. Let me give you one example.
A few years ago I bought a block of land on a very busy main road in one of Australia’s capital cities. I submitted plans to the local shire council to build 12 semidetached home units on the land and, as the zoning allowed for such a development, I did not expect any problems. That was, of course, until I came up against the shire council town planner, who said he would recommend the development for approval subject to the provision of noise attenuation devices across the front of the property. ‘Noise attenuation’ is a fancy name for soundproofing.
I tried to point out to him that there were thousands of kilometres of main roads across the country with many hundreds of thousands of dwellings along them and that it seemed to work in most places without sound attenuation… But he was having none of it. He wanted his noise attenuation devices. He rejected all my pleas and I had an acoustic engineer design a front fence to assist with noise attenuation. No sooner had I finished the job than the royal society for the deaf bought the units—all 12 of them!
We’ve all been there. And we all know we’ve got to build up the inner city. Unless we stop our cities growing (never going to happen), all those people have got to go somewhere. Unless we want to keep sprawling out and creating ‘suburbs’ 4 hours from the CBD, we’ve got to build up. And yet, councils can make it a nightmare.
And of course, this supply-phobia keeps prices on the up and up, and out of the reach of young Australians.
This issue deserves to be front and centre. Good on you Bob for taking a stand. I think you’ve got a difficult road ahead of you – the major parties aren’t going to like it, but I salute you.
Tell me some of the ridiculous charges, costs and stupid red tape you’ve had to live with in the real estate development process… Let it rip!
Vern Silver says
There needs to be more said about this. I have a mate who lives in south Eltham – his neighbours one and all had swimming pols and tennis courts but when he applied to put one in – the local council denied him… The upshot was that my mate is a constitutional lawyer… so he built his pool anyways… and put in his tennis court…
Of course the local council tried to sue him and get him to remove it – but the truth is that according to the Australian constitution local councils are powerless and in fact are breaking constitutional law by charging any money at all for permission to build.
In the end my mate told them that according to the constitution (which is ultimately a revamped British Constitution) he was legally able to request that he be tried by the British land court and that if they wanted to take him to court over his (tennis) court they could take him to court in England…
Courting disaster? No… according to the constitution we are still kings of our own domain and can do whatever the hell we want with our land… when the council looked this up they found that it was going to cost them $300,000 odd bucks to take him to court in England… and they gave up.
That was 8 years ago – and it’s still tennis and swimming round at his place every time I’m down there 🙂
Vern Silver says
There needs to be more said about this. I have a mate who lives in south Eltham – his neighbours one and all had swimming pols and tennis courts but when he applied to put one in – the local council denied him… The upshot was that my mate is a constitutional lawyer… so he built his pool anyways… and put in his tennis court…
Of course the local council tried to sue him and get him to remove it – but the truth is that according to the Australian constitution local councils are powerless and in fact are breaking constitutional law by charging any money at all for permission to build.
In the end my mate told them that according to the constitution (which is ultimately a revamped British Constitution) he was legally able to request that he be tried by the British land court and that if they wanted to take him to court over his (tennis) court they could take him to court in England…
Courting disaster? No… according to the constitution we are still kings of our own domain and can do whatever the hell we want with our land… when the council looked this up they found that it was going to cost them $300,000 odd bucks to take him to court in England… and they gave up.
That was 8 years ago – and it’s still tennis and swimming round at his place every time I’m down there 🙂
Steven Hambly says
It took me 5 years to get building and subdivision approval in the Hunter Valley on a 1012 sqm splitter type corner block. It has never flooded there before (flood model indicated otherwise) and every other house is single storey in the area. I was forced to build a double storey house with all living spaces metres off the ground and the fence and underneath house area had to allow flood flow but also create privacy. It was a ridiculous waste of time and money and now the flood study has disappeared and they sent out a survey to all residents asking if they have ever been flooded? Councils are a joke sometimes.
Steven Hambly says
It took me 5 years to get building and subdivision approval in the Hunter Valley on a 1012 sqm splitter type corner block. It has never flooded there before (flood model indicated otherwise) and every other house is single storey in the area. I was forced to build a double storey house with all living spaces metres off the ground and the fence and underneath house area had to allow flood flow but also create privacy. It was a ridiculous waste of time and money and now the flood study has disappeared and they sent out a survey to all residents asking if they have ever been flooded? Councils are a joke sometimes.
Peter Connolly says
I’m trying to do a simple subdivision of one block into two, both with street frontage. The local council is making me pay for a footpath that isn’t yet installed, may not be installed on my street, and cost over $8,000. Sure takes a big chunk out it any profit I might make.
Peter Connolly says
I’m trying to do a simple subdivision of one block into two, both with street frontage. The local council is making me pay for a footpath that isn’t yet installed, may not be installed on my street, and cost over $8,000. Sure takes a big chunk out it any profit I might make.
Hitendra Jagdale says
Talking of Sec 94 contributions if you look closely at Holroyd Council’s sec 94 contributions for newly zoned areas in Pendle Hill, Wentworthville etc your eyes will pop out. $ 7700 for 1 br unit, $ 13500 for 2 br unit and approx. $ 15000 for 3 br unit and these are charged per unit hence if you had 20 X 2 br units the developer will have to pay $ 270000 just in sec 94
Hitendra Jagdale says
Talking of Sec 94 contributions if you look closely at Holroyd Council’s sec 94 contributions for newly zoned areas in Pendle Hill, Wentworthville etc your eyes will pop out. $ 7700 for 1 br unit, $ 13500 for 2 br unit and approx. $ 15000 for 3 br unit and these are charged per unit hence if you had 20 X 2 br units the developer will have to pay $ 270000 just in sec 94
Hitendra Jagdale says
Also it is worth investigating why construction costs dont come down even when there is a down turn in the economy?? Is it due to the monopolies in supply chain in each sector..bricks, cement , steel, etc etc
Hitendra Jagdale says
Also it is worth investigating why construction costs dont come down even when there is a down turn in the economy?? Is it due to the monopolies in supply chain in each sector..bricks, cement , steel, etc etc
Peter says
Bob Day……..at last a politician with some first hand knowledge of why the next generation will be paralyzed by debt. As we all know, it is the accelerated cost of land due to restricted supply that translates into a fading dream for the generations to come. As an owner(10 years) of 100acres of prime land located 3km. from a large rural city, I can only say……vote one for BOB everyDAY. My prayers have been answered
Jon Giaan says
ouch. surprised they didn’t want you to build an ark too while you were at it…
Simon says
the materials don’t cost much, land costs, and paperwork costs
Simon says
1.9 million australians in govt. / public service, that’s 50% more per capita than america, and a lot more work in private sector, just in the business of complying with govt, like the 500,000 on sickness benefits aren’t on the dole, but just as unemployed.
that’s a hell of a lot of people for the working part of society to support
Robert says
Catherine Cashmore recently published a list of several federal MPs’ property holdings in an article called “Our distrust is very expensive: We can’t have a trustworthy financial market without an honest property system”. If you google those words you’ll find it. The list is on the last page. Politicians are engaging in insider trading and market manipulation for their own enrichment. The problem we have is that so many Australians are with them for the ride. Bob will not save the day. There is too much vested interest against him.
George says
I have just encountered a similar problem in a town that recently flooded in Qld, 2013. Bought a house with two street access on a 1200m2 splitter block after council advising that out if the 3 potential splitter blocks I was looking at purchasing this was the easiest to get approval for and in there words a no brainer. Lodged application and to my surprise they rejected it based on risk to flooding…. Even though in all of history this house has never seen flood water and every other house in this street had already done what I planned to do. Funny thing is they were encouraging developement at the time to stimulate the economy… Go figure…
George
Steven Hambly says
Sorry to hear that. It feels like the world comes crashing down when councils reject what seems like a simple development.
Razzman says
I despise councils. Many years ago before I bought a house on a main road I asked the council if I could turn it into a child care centre. They said they could not say no or yes until they saw plans, however they would not look at said plans unless I was the owner of it (huh?). It revolved around making allowance for parking for staff at the time. I bought the place, put in plans for parking. Not only did they have the gall to say I needed parking for a few of the parents cars as well (that’s right parking for many cars that pull up for 5 secs to drop off or pick up their children not just one park) BUT at the council meeting where they made the decision to reject my plan, when I was present, the wanker heading the meeting had the gall to say that such rejections come about because people do not consult with the council first!!!! And they got upset when I replied in no uncertain terms disregarding their stupid meeting rules and let them have it. Councils are the worse level of opaque, unfair and greedy ‘government’, State is next, Federal government departments are the most accountable (doesn’t mean they are ok). There is no chance of fixing corrupt councils they are full of ‘would be’s if they could be’s’.