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Issue #1448      24 March 2010

NSW government to seize homes for developers

In an astonishing move, the NSW government has announced it will enact legislation allowing it to compulsorily seize residents’ homes for new development. The government has claimed that the legislation is required to meet Sydney’s need to meet residential requirements by the year 2035, when the city’s population may well reach six million. The legislation is based on the assumption that compulsory acquisition may be required “for the public good”. According to the government it will only be used in the case of homes in areas close to major transport arteries and traffic routes.

However, the legislation could be used in virtually any case of home ownership, on the pretext that it would create employment, and would help to meet the city’s housing needs.

The legislation effectively penalises anyone who lives in the nominated areas, and sets a general precedent under which virtually anyone’s home is up for grabs. This sort of legislation has been introduced in the US, to enormous controversy, but has never before been proposed for use in Australia.

At the moment, traffic and transport authorities may compulsorily acquire land, but only for public purposes, such as the construction of major new rail lines. The NSW government legislation, on the other hand, would enable homes to be compulsorily acquired, simply for redevelopment by private interests.

Last week Stephen Albin, head of the developer lobby group the Urban Developer Institute, claimed that acquiring property under the legislation would be “the same as acquiring land for a road or railway.”

But it certainly would not. The legislation relates to existing road and rail systems, and is not specifically related to new transport infrastructure. Implementation of the legislation would, in fact, place a potentially catastrophic load on the existing hard-pressed transport networks, so the legislation actually poses a major threat to the operation of the existing transport networks, rather than offering a solution to transport problems. In short, the government’s claim that it will help to meet the state’s housing needs is simply an excuse to enable the government to seize homes at will, in order to help developers maximize their profits.

Transport authorities rarely resume properties, and only then under conditions that require compensation for homeowners. When the Howard government acquired homes under aircraft flight paths in inner Sydney on a voluntary basis, homeowners were paid the full market value, plus a special compensation payment, plus all their legal expenses. In some cases where property was resumed in Britain, the former owners were entitled to claim compensation for increases in value of the property as a result of the redevelopment, over a ten-year period.

This certainly wouldn’t suit the development lobby. Stephen Albin commented that homeowners should not receive full compensation for losing their homes. Ignoring the NSW 3A legislation, which the government can use to ram through big development applications, as well as the virtual guarantee of profit provided by compulsory government acquisition of homes, he protested bitterly: “Developers are taking the risk… these landowners are not taking risk”!

Political suicide

The government has studiously ignored the option of supporting the development of new medium to high density housing estates in outer areas, with proper public transport links and fully planned services, thereby removing the need for ever-higher density redevelopment in the existing inner areas. The government has also ignored the idea of developing public housing as a state enterprise, in order to meet the needs of people who cannot afford to buy a home on the private market, and to force a reduction in house prices in general.

Up till now the NSW Premier, Kristina Keneally, has confounded her critics by regaining some of the public esteem squandered by her predecessors. She did so in a number of shrewd moves, including cancellation of construction of the extremely unpopular new Metro rail line. However, it would be difficult to think of an initiative more calculated to rouse public wrath than legislation to compulsorily acquire homes for the benefit of developers.

This is not the first time that NSW Labor has attempted to help itself to residential property, for the benefit of the developers. In 2008, with former Planning Minister Frank Sartor at the helm, the government drafted legislation that would allow it to compulsorily acquire land of “net public benefit”, and only withdrew the proposal after furious public opposition.

However, this time the proposal is based on the formation of a new development authority. Doubtless the government is hoping that the public will believe that an “independent” body will ensure natural justice prevails. Unfortunately, at this very moment the Sydney Harbour Foreshore Authority is under suspicion of having entered into corrupt transactions regarding the leasing of property it owns in the Sydney Rocks area.

If the government gets its legislation through parliament, it will no doubt attempt to delay implementation of the scheme until after next year’s NSW elections, in order to lull the public into a false sense of security. It will be the job of the many community organisations to make the public aware of the full implications of this corrupt and grossly unjust legislation.

Next article – Rally calls for compensation for Mr Ward’s family

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