Chief Minister Andrew Barr: “We will need to make some changes.” Photo: Ian Bushnell.
The ACT Government is open to being flexible on tax and planning rules to mitigate some of the risk associated with housing proposals, but it will want to see some community benefit in return.
The government has finalised its draft major plan amendment to support more Missing Middle homes in Canberra’s suburbs, proposing planning changes to support the construction of more townhouses, row houses, duplexes and low-rise apartments.
The property industry has welcomed the changes, but it still has concerns about project viability under the current tax settings, particularly Lease Variation Charges.
It is understood that while big developers will fare well in 2026, it will be crunch time for the smaller ones, which the government will rely on to supply the Missing Middle, as they are less able to absorb costs.
The government also supports the adaptive reuse of office buildings, but there are obstacles to implementing this approach.
Chief Minister Andrew Barr said the government was prepared to do more to help developers, but the community needed to get something in return.
Mr Barr said it couldn’t just be a private windfall gain.
“It has to be something back for the community, but that can be in a number of different forms,” he said.
“That can be around contributions to the public realm. So, for example, if a number of blocks are to be consolidated and there’s to be more housing density, it might be that the footpath needs to be improved, or it might need signalisation of a particular intersection.
“We’re looking at ways that developers could make a contribution towards those sorts of very practical bits of community infrastructure that would go hand in hand with increased residential population.”
Mr Barr said that for small-scale development, it could also provide a proportion of the housing at below-market rates.
At the other end of the spectrum, enabling adaptive reuse or knockdown rebuild of older Commonwealth government buildings that now have no other practical use may involve a combination of community infrastructure, affordable housing, and sustainability features.
“We’ll do some further policy work through the rest of this year and into next year, but I take on board the point that we will need to make some changes if we want to see the sorts of development outcomes that we’re looking for,” Mr Barr said.
“But at the same time, this is not about a massive transfer of unearned windfall gains to a small number of developers; there must be a benefit back to the community.”
Mr Barr said he understood developers faced planning and economic risks, so the government could put in place a framework that de-risked some of those things and provided a greater degree of certainty.
He said the government could also be more flexible around the timing of LVC payments to help developers manage their cash flows.
Deferring payment until just before the certificate of occupancy meant the developer would have sold the property and would be in a better position to make the LVC payment.
On adaptive reuse, developers face logistical and planning hurdles for converting offices into housing, such as the requirement for private open space or balconies.
Mr Barr said that in the CBD, some planning rules, including height, came under the jurisdiction of the National Capital Authority.
“We need to consider those,” he said.
“I imagine that there’ll be some things that will be general to and consistent across all of those CBD blocks, and others where you might require a bespoke solution, and it will depend on the building and its location, really.
“So we need to continue that dialogue, but we’re certainly open to that.”
But for some of the former APS buildings, the only viable outcome would be a knockdown rebuild.
“Some of the large floorplate Commonwealth buildings could potentially be internally reconfigured to offer a series of smaller tenancies, and there are some Commonwealth buildings being vacated that might be suitable for some of the ACT Government service expansion,” he said.
“For example, bringing the police headquarters from the old Winchester Centre in Belconnen into the CBD.”
