IT is 2014 and Canberra is embarking on its next century with population set to soar, targets set for inner-city growth and affordable and sustainable housing, and a light rail system planned to link new suburbs to the city centre. What’s wrong with this picture?Despite these strategies, development taxes, fees and charges will continue to stifle investment and that old, hoary chestnut, the lease variation charge, remains a significant tax on redevelopment.
Contrary to the Territory’s positive policy to increase urban density, the LVC almost forces new development into greenfield subdivisions or on to vacant residential sites in established suburbs.
This is not the stuff of development folklore – rather, the facts show that in the first year following the introduction of the tax, the number of development applications processed in the ACT fell by 56 per cent as projects were delayed or abandoned. In its current form, the LVC could effectively put an end to urban infill and adaptive reuse of old commercial buildings in Canberra.
The same is true of commence and complete fees. Initially introduced as a disincentive to “land banking” of residential blocks, these fees have been extended to cover commercial, mixed use and multi-unit sites.
In the current economic climate, some owners have no choice but to “weather the storm” as they wait for new tenants or bank finance. The fees – which in some cases can be hundreds of thousands or even millions of dollars – unreasonably penalise these owners, jeopardising Canberra businesses and the future of our construction industry.
The Government’s soon-to-be-released “stimulus package” has the potential to resolve the obvious and unnecessary barriers to positive investment in Canberra, freeing industry to once again respond to the needs of our community and to set a new standard for future innovative urban development.
Catherine Carter is ACT executive director of the Property Council of Australia.