King castle

Why All The King’s Horses And All The King’s Men Can’t Put Faith Into The Political Process Again – Unless We Have A Talk With Jeremy McLeod

How the development industry dominates the roost and is probably only second in influence to the oil and gas industry.

The NSW government looks increasingly fragile after losing two ministers. A little side-shift with the planning minister and we would all be so much better off – including the property and development industry.

By the time you read this, we’ll likely have our eyes on ‘the letter’ – a resignation minister from Buildings Commissioner David Chandler – which many suspect pushed Fair Trade Minister Eleni Petinos to the brink of infinity Politics. (Of course, in politics, there are all sorts of gravity-defying forces at work, so you can never be sure.)

Did Chandler jump in protest at attempts to force his hand to remove stop work orders from a particular company or other companies? Or did he jump in because…not sure what that alternative might be, except for the more nebulous concept that he was very upset about something.

That the letter was sudden and unexpected is an understatement. The man fired on 12 cylinders and had just extended his contract.

Admittedly, Prime Minister Dominic Perrottet (who faces an election on May 25), betrayed his discomfort when questioned about the circumstances of the letter of resignation from building commissioner David Chandler.

How dark the world of politics and influence really is. We know how powerful industry cabals can become with just a glance at the fossil fuel industry; but lately, the suspicion that the real estate development industry comes second is becoming a growing reality.

Not just Chandler and his efforts to clean up shoddy construction work that can destroy the life of an individual or family, without legal protection, and now entire communities and future home buyers.

For example, the abandonment of the State of Place Environmental Design and Planning Policy (D&P SEPP) by a newly installed planning minister, Anthony Roberts, in early April, long before he could seize the two sides of what was on offer.

This is the other side of the coin launched by Chandler. The sidelining by the outsized power of “certain developers” and “certain industry lobbyists” of fairly modest attempts to improve the quality of life and health of people living in vulnerable new suburbs and housing estates. Attempts to mitigate heat islands, amenities, walkability, etc.

The status quo is to maximize the yield, i.e. the number of housing units that can be extracted from a housing estate, without taking into account biodiversity, the urban canopy, etc.

In doing so, NSW Planning Minister Anthony Roberts showed that his ears belong only to the development industry. And that he is blind to the superior qualifications of his predecessor Rob Stokes and the vast contribution of local governments, professionals and large-scale community non-governmental organizations over two years.

At enormous cost.

The exact magnitude of this cost is expected to be revealed at the August 29 Budget Estimates Committee.

According to the truckload of documents now made public concerning the planning policy (which we too foresightedly renamed SEPP-gate a few moons ago), our suspicions and those of everyone else were unfortunately confirmed.

The real estate industry has a huge influence on this state government, and many others, we suspect. Also, there is extensive historical precedent for landowners running governments: remember that only landowners in many past jurisdictions have had the privilege of voting.

What’s new now is that we can see exactly how it happens.

The documents, revealed by a parliamentary motion in the NSW Legislative Council, show in detail who has the government’s ear and who does not. What is almost as powerful as what is revealed is what is not revealed.

There are letters, replies, thanks and meetings arranged to address the concerns of developers, but none by the Minister to ask for the other side of the story – of the two years of public/professional/local government consultation.

As Total Environment Center Executive Director Jeff Angel says, the documents prove that there is a listening ear for industry with easy access to developers and their representatives, and that due process of public consultation has been ignored.

Interestingly, Government Architect Abbie Galvin cautions against this: “…averting our eyes with things that impact climate, urban heat and amenity standards in base for new developments doesn’t make sense as it should help housing supply, approval speed and flood (long term) as opposed to hinder.

She advised suspending the SEPP for a while.

“I’m just afraid that if we shut down completely, all knowledge and continuity will be lost and difficult to regain. Given that the dollar investment so far has been huge.

But instead we have the king of the castle of cheap apartments, Meriton boss Harry Triguboff, who sent his dictates to the government a few months ago telling the planning minister that no one he knew called for changes to the state’s environmental planning policy. So why the hell do it?

In fact, if the minister wanted developers to spend more money, he was happy to spend it on parking. Its buyers wanted more parking lots. He was happy to do that.

Sadly, this is so short-sighted from Triguboff and his pals. Economists around the world have established that half of the world’s GDP comes from the natural environment. Property is most needy of all in its demands on nature to supply its raw materials and the places on which to build its product. You’d think it would be Harry sticking his hands to the road in front of the bulldozers and demanding that the real estate lobby start protecting its supply and delivery chain by protecting the environment.

Harry’s missive is just a few lines in an email.

There are a few more from Tom Forrest, managing director of the Urban Taskforce.
Compare those few emails to the weight of community submissions. Since it’s the community – us the people (taxpayers) – that will bear the cost of what the developers do.

Be a little patient with us.

Tom Forrest is outraged and fiery in his total rejection of Deloitte’s work around SEPP which said that for every $1 spent would yield $1.40 in profit.

How dare they, he said, signaling that he would launch his own Public Access to Government Information (GIPA) to ask for math details.

It’s the developer who pays that dollar, so where’s the benefit to them? He asks indignantly in the email.

But the truth is that the developer does NOT pay.

Developers pass all costs on to the consumer…banks won’t do business or engage in any development unless the developer can prove they are getting a nice margin of return.

You would expect that. Otherwise, the developer risks going bankrupt and the financier will not get his money back. They need to plan for a number of economic and geopolitical shocks – and now climate shocks – that could prevail between the loan extension and the repayment of their money, perhaps three or four years after the agreement is signed.

Ask Nightingale Housing founder Jeremy McLeod at the start of his radical housing model which aimed to be highly sustainable, affordable and beautiful, when he said he would cap developer profits at 15%. All transparently disclosed to stakeholders (in fact, Nightingale returned a check for about $100,000 to buyers at one point because it was part of a contingency fund that went unused).

The point of this story is that McLeod struggled tremendously to find a banker who would finance such a low profit margin. It almost knocked the whole model off the ground.

So if the cost of SEPP to provide habitable communities that are not flooded falls on the cost of the end product, it is NOT the developer who pays.

Those who pay are the end buyer and the landowner. This is because the feasibility takes into account all the costs before the first turf is turned. In fact, before the land was purchased.

Think of the developer as a kind of conduit to the final product. They must settle all their monies properly or they will go bankrupt.

So no, they will not pay for the SEPP. We all will…because we will pay for failed, shoddy development. One way or another.

That’s why, Minister Roberts, we need all of us to be part of this collaborative process.

You’re new to this job, so we’ll ignore the deception that all ministers have to deal with, and we kind of regret saying you should be fired. We can change your mind here if you can show us that you can change your mind when the facts change.
The first thing would be to listen to everyone when making a big decision.

The SEPP is not dead and buried. You can bring it back. You can help educate Harry T and the crowd that he can be a good global citizen. We think in his heart he would probably like to leave a legacy of good, affordable development. Perhaps even be the subject of a heroic statue that the people could erect in their honor as the villages did in honor of the founder of the city.

He might like to think he can expand his pioneering spirit to do what’s right for the people, a win-win collaborative outcome that takes into account our now common enemy: a hostile climate that is angry with all of us and intends to destroy us if we don’t behave.

Mr. Roberts, Harry and all of Tom Forrest surely want to be loved and honored.

They actually have a chance to leave a wonderful legacy.

You also.

Chat with Jeremy McLeod. He will help you.