The NSW Biodiversity Offsets Scheme (BOS) poses a threat to Wagga's housing supply, according to local developers.
Subscribe now for unlimited access.
or signup to continue reading
Established by the former state government in the Biodiversity Conservation Act 2016, the scheme mandates applications for development or clearing approvals must set out how impacts on biodiversity will be avoided and minimised.
"Unavoidable" impacts can be offset by the purchase and/or retirement of biodiversity credits or payment to the Biodiversity Conservation Fund (BCF). These offsets are sold through the BCF by individual landowners, who conserve native habitat on their properties.
In other news
'NO ONE BUILDS TO LOSE MONEY'
Wagga MP Joe McGirr is one of the scheme's political detractors, declaring despite its "reasonable objective" of environmental conservation, it is fundamentally broken.
"There are issues with the scheme including disproportionately expensive assessments, a lack of credits in the regions, and few discernible environmental gains," Dr McGirr said.
"Concerns have been raised to me by members of the business community wanting to build homes but finding themselves increasingly confronted by high barriers of entry, complex processes and a lack of government accountability.
"These issues are making new developments commercially unviable. No one builds to lose money. Yet west of the divide I have been informed that the cost of credits can be 10 times that of east of the divide."
Dr McGirr pointed to the challenges faced by Transgrid's Humelink project as an example of where this adds unreasonable costs that could be better spent.
"With the estimated project value being $3.3 billion but with an additional $1.2 billion in offsets, this money could be much better spent undergrounding the Humelink so as to minimise fire risk, protect habitat and prime farmland, and preserve visual amenity," he said.
Dr McGirr's comments put him on similar footing to local developers who say the costs of developing new land is out of control. While they often place blame on Wagga City Council, many of the regulations making the construction process slower and dearer are state ones like Biodiversity Conservation Act.
![NSW housing and water minister Rose Jackson met with the member for Wagga, Joe McGirr, in the city earlier this month. Picture by Madeline Begley NSW housing and water minister Rose Jackson met with the member for Wagga, Joe McGirr, in the city earlier this month. Picture by Madeline Begley](/images/transform/v1/crop/frm/200569959/78e8bec8-4ea3-4fb2-85b2-3b5d85454d73.JPG/r0_533_5217_3478_w1200_h678_fmax.jpg)
Wagga developers are particularly vulnerable to cost blowouts under the scheme due the high cost of purchasing credits west of the Great Dividing Range.
While in coastal regions, developers can often buy credits on the open market, the last resort - buying credits through the BCF - is often the only option in Wagga.
Property developer Graham Walker is advising a review of the Biodiversity Conservation Act, led by former Treasury secretary Ken Henry.
"There are not a lot of credits available [west of the divide] - we could not find any credits," he said.
"You may have bought some land as a developer, then you can't find the credits. Your only option then is to develop a portion of it, and let the rest go native. That obviously solves the problem with the species and the credits, but means where council were expecting to get 3000 houses, they're only getting a few hundred."
Mr Walker said he had seen low-cost housing and industrial plans in other towns like Moree cancelled because the cost of credits ran to hundreds of thousands of dollars per lot.
DELAYS AND UNPREDICTABILITY
With housing supply in Wagga insufficient to meet demand, prices have been rising dramatically for at least 18 months. The only solution to this bind, according to successive housing ministers, is to build new homes to reduce competition for existing ones.
An examination of the most recent Census data suggests it is not only the absolute number, but types of housing being built that are behind market demands.
New developments continue to focus on the Australian dream - three and four-bedroom freestanding homes - while a growing number of Wagga residents are looking to downsize to save on costs.
Local property developers have said that as the costs of construction continue to balloon under this, and other "green tape", they will be forced to sell the property for more to remain profitable, and insure against future risks.
Property developer Damasa's director Manuel Donebus said bureaucratic expenses account for nearly 15 per cent of the total costs of one of their new commercial developments.
"The Stage 2 building we're looking to do in Morgan Street ... for a project that size, it'll cost us $2.5 million," he said.
![Wagga's deputy mayor Jenny McKinnon wants to see more medium-density housing. Picture by Madeline Begley Wagga's deputy mayor Jenny McKinnon wants to see more medium-density housing. Picture by Madeline Begley](/images/transform/v1/crop/frm/200569959/e7419bb8-11e6-4725-8260-9b6f5ec2f69e.jpg/r0_340_5458_3409_w1200_h678_fmax.jpg)
"Just to get to the DA [development application] stage, we will have spent at least $1.5 million. So you're spending more than a million bucks ... and there were still two councillors who voted against it, despite council recommending it for approval."
Property valuer with Fitzpatricks Greg Howick said developers he works with say they have no choice but to pass these costs onto the eventual homeowners, who in turn may pass them onto tenants in the form of higher rents.
"My personal view is Australia is the most over-regulated country in the world," he said.
"You can't have development and retain 100 per cent of trees - it has to be if you go through this area, you plant up another area for the betterment of the city.
"It's when you have a tree that's got to be retained, which means you can't build on that section of land at all, and you destroy the output of the property. That's the difficult part."
Mr Walker said part of the problem is the unpredictability of the BOS. Developers have to spend tens of thousands of dollars before they reach the point they know what the offsets will cost them. In the long term, he said property development will become too high-risk.
"You actually have to own the land, have lodged your DA, and then they tell you how much you're going to have to pay," he said.
"The amounts they've been charging carries an enormous amount of risk - they're risk rated because they don't know they can find the credits anyway. By the time you find out, you're already stuck."
![Property developer and Damasa director Manuel Donebus. Property developer and Damasa director Manuel Donebus.](/images/transform/v1/crop/frm/200569959/1fffb3fb-6d25-47c2-841d-85465412b52d.jpg/r0_0_904_678_w1200_h678_fmax.jpg)
GROW UP, NOT OUT
Deputy mayor and Greens Party member Jenny McKinnon said she understands the concerns of local developers, and doesn't think the BOS is delivering for the environment either.
"Our Riverina area only has something like one per cent of completely undisturbed vegetation left," Cr McKinnon said.
"What that means is every example of that undisturbed vegetation is extremely valuable in this area.
"My feeling is surely we can be doing our building on areas that have already been cleared? Surely we don't need to be cutting down any more of that area."
Cr McKinnon said while she was deeply concerned about undisturbed bush, she was less concerned about reclearing urban areas with non-native or young trees.
Cr McKinnon said developers should be more ambitious when it came to urban infill and planning rules should focus on ways to "build up, not out", without compromising the character of the city.
"We've already got really big blocks of land that people have built on in Wagga. In some of the newer suburbs, the houses fill up most of the block," she said.
"In some of the older suburbs, we've already made changes to development control plans to allow for secondary buildings, but not many people are taking that up.
"I think we need to get used to the idea in Wagga of having two and three-storey residential buildings so we can have more people closer to the centre of town."
The principle of building denser housing on a single block has the double dividend of reducing per-residence land and utility costs, as well as circumventing many of the environmental issues developers say have made housing slower to build, and more expensive to buy.
Director for the Centre for Equitable Housing at Per Capita Matt Lloyd-Cape agrees. He previously said regional councils need to make bolder decisions when it comes to planning and development, noting the single greatest cost is land purchase, and this could be reduced by creating smaller subdivisions or building more apartments.
Councillor Richard Foley has expressed similar opinions about urban consolidation, suggesting a shift to focus more energy on low-cost, mediumdensity housing.
A report on the outcome of the Biodiversity Conservation Act review will be tabled in Parliament by August 24.
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
- Download our app from the Apple Store or Google Play
- Bookmark dailyadvertiser.com.au
- Follow us on Twitter
- Follow us on Instagram
- Follow us on Google News
- Make sure you are signed up for our breaking and regular headlines newsletters