Authorised by K Carra for The Greens, Brisbane - AN 2020/0139

 

MAKE DEVELOPERS PAY FOR MORE PUBLIC INFRASTRUCTURE:

COMMUNITY NEED, NOT DEVELOPER GREED 

Our suburbs are growing. With more new residents moving in, especially into apartments, we need more public green space, footpaths, safe crossings, cycleways, libraries, community hubs and public transport services. We can create cities that support a good life for all of us - that provide more opportunities to get together, get around and get active - but we need developers to contribute to the cost of this public infrastructure from the enormous profits they make building in our suburbs. 

 

THE CHALLENGE

Right now in Brisbane, investment in local infrastructure and services like pedestrian crossings, parks, flood mitigation and public transport isn’t keeping pace with population growth. What’s more, as real estate prices become more inflated, the cost of providing local facilities like parks, libraries and bike lanes rises. 

 

Developers aren’t paying their fair share as they profit from activities that put more pressure on already stretched resources. On top of this, Council frequently waives infrastructure charges, which means that funding is falling short of what our growing neighbourhoods need.  

 

Infrastructure charges levied by Council are capped at the State level, creating a disconnect between the state legislation and the level of funding that local communities actually need. The Queensland State Government has the power to sell off public land for private development using a Priority Development Area (PDA). Developments made under a PDA are given priority and special exemptions, including exemptions from paying infrastructure charges to local councils. That means that Brisbane City Council still has to deliver new public parks and community facilities, and upgrade council roads with new pedestrian crossings etc., without receiving funds from the developers who make huge profits on PDAs! 

 

This is just one example of how developers are not paying their fair share. The Greens’ plan will ensure that our communities don’t keep getting short changed. 

 

ACTION

The Greens will increase Council infrastructure charges paid by developers to fund public facilities like parks, community spaces and public and active transport infrastructure. 

 

To facilitate this, we will call on the Queensland State government to:

  1. Remove the one-size-fits-all cap it imposes on infrastructure charges (currently sitting at $20k for 1 or 2-bedroom dwellings and $28k for 3+ bedroom dwellings).

  2. Remove the infrastructure charges exemption for State Government 'Priority Development Areas' and declared mining areas which currently leaves Council footing the bill for necessary new infrastructure while private developers make big money. 

 

For inner city developments, where rapidly inflating land values are increasing the true cost of infrastructure, we will set minimum infrastructure charges as follows:

  • 1 bedroom or studio dwelling: $40,000 

  • 2 bedroom dwelling: $50,000

  • 3+ bedroom dwelling: $60,000.

We would also provide the following discounts to encourage good development:

  • 75% discount for code assessable DAs where an existing residential or commercial building is being retrofitted for a change of use that would ordinarily trigger payment of new infrastructure charges (like converting an old warehouse so that the attached office is turned into a residential flat).

  • 50% discount for non-profit community housing and public housing dwellings where rent is fixed at maximum 30% of income.

 

We would also conduct a comprehensive two-year review of Council’s infrastructure charge calculation methodology for all of Brisbane including areas outside the inner city. 

 

THE BENEFITS

 

With rapidly inflating land values, the cost of providing infrastructure is growing, and increased infrastructure charges would allow Council to more adequately cover those costs. 

Increasing infrastructure charges would mean residents get more:

  • community hubs like public halls, markets and libraries 

  • parks and green spaces to balance rapid growth and densification (the increasing density of people living in urban areas)

  • fast, accessible and well-connected public transport 

  • safe, connected pedestrian and cycling infrastructure 

  • resilient suburbs, with better flood mitigation and planning for the impacts of climate change. 

 

FURTHER DETAILS

 

The Queensland Government currently imposes an arbitrary $20,000 cap on “infrastructure charges” per 1 or 2 bedroom dwelling for new developments which local governments use to fund vital facilities like parks and public transport. This ignores the fact that local councils know far better than State government how much infrastructure costs in their area and therefore what charges are reasonable to cover those costs. 

 

The Greens would remove these caps on infrastructure charges so that local councils have the flexibility to charge developers according to the cost of delivering crucial infrastructure.  

 

Council would then conduct a comprehensive, two-year review of infrastructure charge calculations across Brisbane. While that review is being completed we would raise infrastructure charges in the inner-city to account for particularly high actual infrastructure costs.

 

This would set the minimum charge as follows:

  • 1 bedroom or studio dwelling: $40,000 

  • 2 bedroom dwelling: $50,000

  • 3+ bedroom dwelling: $60,000. 

 

The  “inner city” refers to dwellings within the following wards:

  • Paddington

  • Central

  • The Gabba

  • Walter Taylor

  • Morningside

  • Coorparoo 

 

This is based on wards which overlap closely with Translink’s “Zone 1” fare zone. 

 

BUDGET IMPACT

 

By removing the infrastructure charge cap and raising infrastructure charges for the inner city, we could raise approximately $305.4 million every year to fund public infrastructure. 

 

This is a conservative figure calculated by multiplying the annual number of dwellings approved in Brisbane by $40,000. We have used the minimum charge to balance lower charges outside the inner-city with the higher charges for 2+ bedroom dwellings. 

 

FAQs

 

Will this discourage development and investment in Brisbane?

 

Developers make massive profits and can afford to pay more to fund the public infrastructure that neighbourhoods need. This plan will actually also help incentivise good, sustainable and community-building development through discounts for certain types of projects. 

 

Why are you charging developers more money? Isn’t it expensive and risky to build new homes? 

 

Developers are already making massive profits. Just one developer, Lend Lease, made $500 million in property development in Australia, which was a 13.7% profit margin. Cameron Murray and Paul Frijters have calculated that governments across Australia give away $11 billion in value every year to developers. 

 

Our plan would properly tax the windfall profits that developers get for free, while allowing Council to fund the infrastructure that local residents need when these same developments lead to considerable population growth. 

Housing is already expensive, won’t your plan just push up prices? 

 

No. This plan is aimed at property developers who make windfall profits. 

 

Treating housing and land as a speculative commodity instead of a place to live has driven up housing prices. The discounts we are offering for public housing and community housing would also increase the supply of non-profit housing to assist people who’ve been locked out of the housing market.

 

Won’t this formula produce ridiculous infrastructure charges for high land values in the inner city? 

 

If higher infrastructure charges in a certain area increases the costs of private development, this is likely to place downward pressure on land values in that area, which would in turn benefit owner-occupiers who are paying high rates due to artificially inflated land values.  

 

This sounds like a State issue, why are you announcing this now?

 

We’re sick of the major parties passing the buck between levels of government. This plan is about State and Council putting politics aside and working together to deliver proper community facilities for our neighbourhoods.