Housing crisis as 860 dwellings are in development

By ERWIN CHLANDA

There is land for 860 dwellings in various stages of development in Alice Springs, yet if you wanted to buy a residential block you’d be pushed to find one. And this is counting only 150 dwellings in Kilgariff which will ultimately provide 4500.
Nothing illustrates more how dysfunctional the town’s land development “system” is, a key reason for the current exodus of productive, middle-class families.
The main players in that “system” are the developers, NT Government, the Power & Water Corporation (an arm of the government) and the Town Council.
The biggest major projects – Coolibah Estate, Emily Valley and White Gums – are foundering or are being delayed for these reasons:-
• failure by the government to support developments – for instance, how close to their boundary should water, power and sewerage headworks be taken?
• the council’s unreasonable demands – for example, could sheet flow of storm water be made to work, or should a project be plunged into failure by requiring for tiny creeks, “drains that could accommodate the Suez Canal”, as real estate veteran Doug Fraser puts it?
• the Labor government, supposedly on the side of the battlers, has consistently taken the side of the speculators by dribbling out in tiny quantities low cost housing land and blocks for first time buyers, lest “flooding” the market would depress prices.
These are the do or die questions and our so-called leaders have opted for die.
Well done.
Why is the government flagging just 150 dwellings in phase one for Kilgariff when it will ultimately have 30 times as many dwellings?
At the other end of the spectrum are the projects that would make a mining camp appear a leafy suburb: 74 dwellings jammed into the old drive-in is one example; the proposed cheek-by-jowl development in Mt Johns Valley (see drawing) is another.
What is a housing block worth? There are so few available that it’s difficult to tell.
The hard numbers are for blocks in Stirling Heights, says Mr Fraser, which went for an average $120,000 in 2006, and Albrecht Drive for an average of $150,000 in 2009.
Only about 40 blocks each in Stirling Heights and Albrecht Drive were turned off.
A fortune could have been saved by keeping the work going in Stirling Heights – with all the machinery for digging trenches and building roads  already in place – rather than capping off that project and re-starting three years later in Albrecht Drive.
Three times as many blocks should have been built at Stirling Heights, says Mr Fraser.
The Mt Johns Valley blocks, at $300,000, will not meet the demand of the first home buyer: “They are at the top end of the market,” he says.
There was a rush of deposits paid for the blocks some two years ago but – in the wake of construction delays – several were handed back.
“The majority of the blocks remain unsold,” says Mr Fraser.
In his view the malaise started when the new government clamped the breaks on land releases 10 years ago. Commentators at the time said the administration was bending over backwards for the newly recognised native title holders.

Mr Fraser says most of the world’s towns and cities grow from their fringes: Alice did with Larapinta, Morris Soak, Dixon Road, New Eastside, Sadadeen.
Native title put a stop to this process although the government – as the Opposition tirelessly pointed out – had options of putting the public good ahead of the demands of a minority.
Instead of taking advantage of the vast amount of space around the town, developers had to buy up “infill” such as old caravan parks, at a massive cost, and the residential land crisis was born.

PHOTO at right: Town council mandated storm water drain at Ron Sterry’s Coolibah Estate – one of the stalled developments.

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4 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Gavin Carpenter
    Posted January 25, 2012 at 9:00 pm

    So what’s new? Prior to Self-Government even, the Commonwealth bureaucracy made only small, limited land releases and onerous demands on private housing development.
    A proposal by Peko Mines to build a sizable subdivision in Tennant Creek was thwarted by the Government of the day. Consequently Warrego township was built at Warrego Mine to the detriment of Tennant. The overall subdivision conditions required were well above the standards the Government themselves were producing at the time.
    Peko did their own thing at Warrego rather than comply with the idiotic rules foisted on them.
    The more things change, the more they stay the same, in many cases get worse!

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  2. Steve Brown
    Posted January 21, 2012 at 5:47 pm

    The planning debacle is not a simple, single issue, problem!
    When land release was first halted as government wrestled with the native title issue it didn’t take long for the greedy, the speculators amongst us to realize that land restriction meant escalating house prices.
    Lobbyists, landlords, homeowners throughout our bureaucracies soon saw it as being in their interest to shut off land supply. Government, always willing to withhold funds, enthusiastically endorsed that policy expressing a heartfelt wish to protect people’s investments.
    Trouble is with this kind of self-centered greed driven approach like any pyramid scheme is that when you push prices high enough you eventually reach a point of un-affordability where your workers, the ones you rely on to do the chores and pay the rent, can’t afford to stay. They begin to leave in droves, the result of which we now see in Alice, a collapsing economy.
    Missing from the list of projects displayed in this article is the proposed White Gums Sub division of 500 allotments. This project ticked all the boxes through the planning process, enjoyed enormous public support, had some 200 prospective buyers waiting enthusiastically in the wings. Yet against the wishes and the hopes and dreams of many passionate Centralians the scheme was bought to a grinding halt by Minister Delia Lawrie with the following statement: “The government feels that Alice Springs infrastructure is not presently capable of supporting a project of this size, we will review the situation in 18 months.” That was four years ago. That project was worth in the vicinity of $200 million to the town’s economy. How much better a situation would Alice be in now if this and all the projects knocked back or halted for no good reason over the past eight years had gone ahead. How much better placed would we have been to weather the coming storm? The past eight years of deplorable government have seen a massive escalation not only in house prices but in regulation, requirements, hurdles, fees and charges that have to be payed or jumped before any project can begin.
    Many are illogical and absurd, many put into place with the deliberate intention of slowing or bringing these projects to an end.
    The drainage requirements described in this article are a blatant example of what is utterly ridiculous and completely unnecessary, but doing the intended job … halting the project.
    PAWA have also played a huge part in bringing development to halt, automatically objecting to every new project, deliberately setting the bar too high, advising the Minister against proceeding with projects as they see all new infrastructures as a threat to their bottom line’
    PAWA thinks that shows how gloriously well they operate as a supposedly private business.
    The new and by far the most effective game used by our bureaucracies to stifle developments is the practice of “not setting the bar at all” – a continual repositioning of the goalposts whenever you get near.
    The article mentions the 81 unit retirement village at White Gums. The latest government ploy for that project 18 months on, is to demand a completely designed sewage system for the project. This is an enormously expensive thing to do. Because the department demands it now without giving any guarantee they’ll subsequently approve the project, the developer has to gamble on the project going ahead and spend the money [for the design and planning – ED].
    With a project approval rate of zero would you spend the money? The sad result for Alice from demands like this is that this and other projects are extremely unlikely to proceed. Once again Alice Springs loses out! And yet out there in the public space the minister is busily talking up retirement villages, and how they’re working with business to get some! Sabotage would be a much better description of their procedures!
    How do we fix it? Elect strong leadership! Demand forward thinking! Deregulate, scrap the red tape! Get affordable housing into the market place ASAP! Bring in incentive schemes for long term stayers, schemes such as buying up or building affordable houses, renting them at affordable rates.
    Good tenants who stay five years have the right to purchase at cost, automatically qualifying for NT government loans with all the previous five years rent being converted to a deposit against the purchase price.
    Give our kids, our workers some incentive to stay! When we do our economy will rebuild! It’s is also a matter of great imperative that we lobby whatever government is in power to bring PAWA back into the fold.
    Back directly under the minister’s control as part of a new Department of Planning and Infrastructure that actually has the in-house expertise required to develop the Territory into the foreseeable future.
    The privatized model simply does not cut it when because of continual growth large capital input is required on a continual basis. The present privatized model results in PAWA finding it in their interest to work directly against the Territory’s development, particularly in areas viewed as being more expensive to operate – and that is outside Darwin!

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  3. Bob Durnan
    Posted January 21, 2012 at 5:04 pm

    Dave Nixon (@ Posted January 21, 2012 at 10:36 am) is right. It is even more urgent that his approach – infill and sensible improvisation for permanent, temporary and semi-permanent accommodation – be permitted in relation to the overwhelmingly urgent need for extra shelter on many remote communities.
    Why deny people relatively affordable solutions to some of their most basic needs because of the unaffordable costs of new essential services (power, water, sewerage, roads) infrastructure?
    Many remote families who are dependent on public housing would be only too happy to have a house extension, a granny flat or two, and/or a couple of strong demountable sleepouts added to their existing dwellings. It may not be ideal, and certainly won’t please certain interest groups and dogmatists, but there is really no alternative in the short term while longer term solutions are being developed and possibly eventually funded.

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  4. David Nixon
    Posted January 21, 2012 at 10:36 am

    I have a 72 square meter house on a 907 square meter block but no money to develop to the standards required by NT Govt regulations. I suggest that it not an uncommon situation. Surely urban infill (allowing the deployment of transportable homes) is a cheaper strategy for alleviating the crisis – no headworks for starters!
    Having seen much of Tasmania and regional Victoria across the past month, the cost of Alice’s real estate and its building regulations strike me as self imposed lunacy.

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