The Minns housing plan is fantastic news, but only for real estate developers
Where exactly do these new high-rises fit in suburbs that already have a home on almost every square inch of land? There are two main options. The government will continue to demolish high-quality, mid-rise council housing, as it did in Waterloo, to build high-rise buildings. The second option is mandatory adoption by developers.
Yes, you read that correctly. People who live in houses will be fine. The only authority that can compulsorily buy houses is the government, and if they did, defeat in the next election would be guaranteed.
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However, under strata cancellation legislation introduced in 2015 to facilitate the refurbishment of existing buildings, if a developer buys 75 percent of the apartments in a block, or if 75 percent of the existing owners – who are in the block – remain mostly investors – agree will be forced to sell.
The justification given for this legislation was to save owners from unnecessary maintenance costs for buildings that would have to be demolished. However, the project developers are not pushing to refurbish run-down buildings in western Sydney. Medium-sized projects in the high-grade East and Lower North are more profitable to refurbish, especially when height restrictions are increased. It doesn’t matter that it may be excellent housing stock and that it’s already someone’s home.
One of the most striking things about the sudden unbridled enthusiasm for high-density development is the complete absence of consideration for the Strata Title, the law that will facilitate and then regulate each of these developments, including the 15 percent affordable housing component. Affordable rental properties will be owned by a not-for-profit or other entity that becomes part of the ownership corporation and owns and manages a building jointly with lay people. Strata 101 shows us that owners with different motivations struggle to manage buildings together.
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Alternatively, if the developers are really smart, they can exempt the affordable housing owner from the homeowners’ association by making it a separate stratified property that is not regulated by the strata statutes’ consumer protection laws.
At this point, I would bet my life that I’ve lost the economists blindly pushing housing “reform,” although I’m not a reader living in such a complex development and aware of the challenges.
We all agree there’s a housing crisis, but we’re doing even more of what we’ve been doing for the last two decades – by giving developers the opportunity to sell high-rise buildings to the highest bidder, with no regard for the needs of the Taking people who legally and socially live in them will lead to complex developments – will not solve our problems. New ones will just pop up.
Professor Cathy Sherry, Macquarie Law School and Smart Green Cities, is the author of Strata Title Property Rights: Private management of condominium properties.
