Page 2799 - Week 09 - Thursday, 27 September 2007
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The estate development plan for Franklin 2 has been approved and includes the action plan requirement that 15 per cent of blocks are in the smaller affordable range; that is, $200,000 to $300,000 for house and land, with $60,000 to $100,000 for the land component. The Franklin 2 estate will also include a demonstration housing precinct. As more estates are developed by the land development agency, they, too, will include the requirement to provide 15 per cent affordable house and land packages. I would reiterate that this requirement to provide 15 per cent of affordable blocks is not inclusionary zoning by stealth, but provides a range of choice across new estates by salt and peppering a mix of smaller, and hence cheaper, blocks.
The government is introducing regular englobo land sales and is targeting two land sales annually, with at least one-third of land released through this means. The first englobo release was at Macgregor west, which is being developed by the Village Building Company. The LDA is developing a program of series of englobo releases on an annual basis for the coming four years. There will also be over-the-counter sales of affordable housing blocks. Work on the legislative changes that will be required to enable this to occur is progressing well.
While increasing land supply is a major plank of the strategy, the government has no intention of precipitating a fall in property values or engineering a solution for some Canberrans that will harm the interests of others. Giving people a foot in the door is also the aim of the action plan’s initiatives for first home buyers. The government knows that the first step into the housing market is often the hardest. We are putting in place a range of measures to make that step a little less daunting and a lot less painful.
The government’s innovative package of measures includes land rent and shared equity schemes, including for public and community housing tenants. Through an initiative unique to the ACT, we are introducing a land rental scheme, allowing eligible home buyers to rent their land rather than to buy it outright. By paying rent on a block of land rather than finding the full purchase cost, home buyers can potentially reduce their housing costs by hundreds of dollars a week. On average, we expect land rent payments to be around a quarter of the mortgage costs of purchasing a block.
The scheme takes advantage of the ACT’s land leasehold system and will make buying a home a possibility for many people who might previously have thought home ownership out of their reach. The initiative will enable Canberrans to purchase a typical house and rent the land for the same monthly payment that they now make to rent an equivalent house.
Shared equity programs are a feature of many of the individual strategies that make up the action plan. In addition to the shared equity programs to be offered through Community Housing Canberra and the private rental scheme, we propose extending shared equity options to public housing tenants on incomes of more than $50,000. To further broaden the reach of shared equity programs, we will seek expressions of interest from not-for-profit providers, expanding the range of choices beyond the products currently available in the market. Discussions have been held with a number of financial institutions regarding the development of new finance packages to support both land rent and shared equity initiatives.
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