Letter to Premier Rockliff: Failing Construction Sector

Dear Premier Rockliff and Minister Vincent,

I am writing to you to express my concerns about the failing construction sector in Hobart and around the state. At present the City of Hobart has more than 800 approved dwellings but none of them are being built. We recently learned that the Macquarie Place development at the old Motors site on Macquarie Street has failed despite significant pre-purchases. 

I have recently met with builders, property developers and architects to understand the market as best as possible. I have learned that construction costs and headworks are the main impediments. Some of those extra cost pressures can be offset with some additional height for medium density builds.

Firstly, anything The State can do to assist with construction costs will be well received by the industry. Ideas that have come to me include subsidising transport of specialist plant an equipment. For example, it costs at least $500,000 just to get a tower crane to site in Hobart. In addition, I understand that providing freight subsidies for building materials that we don’t produce in Tasmania would go a long way. Material such as steel reinforcing, structural steel and plaster board. 

Secondly, headworks are a significant impediment to development in the City of Hobart. This primarily relates to storm water infrastructure in the city centre. I understand the Council applied for a Federal grant through the Urban Precincts and Partnerships Program but was ultimately unsuccessful. Any assistance the state can provide to urgently and strategically uplift our storm water system would be a massive help.

Thirdly, the time it has taken for the Tasmanian Planning Commission to assess and implement the Tasmanian Planning Scheme in the Hobart context has been unacceptable. I understand the City of Hobart has a suite of amendments in the form of upzoning and special area plans which actively encourage development. Many of the proposed changes enable higher buildings in our city centre which will assist developers and builders from a viability perspective. I am pessimistic that these will progress in a timely fashion through the Tasmanian Planning Commission. I would ask that these are prioritised as a Ministerial Directive. I also understand there may be legislative means to short-cut some of the legislated requirements. 

Lastly, appeals are an important part of any democracy. In the planning context, it is my understanding that third party appeals are slow to be processed through TASCAT which contributes to projects being delayed, sometimes by more than 12 months. In an environment with steadily increasing cost burden, these delays can be the difference between project success and failure. I think the State Government could assist here by fast tracking medium density development appeals through TASCAT. 

Thank you for taking time out of your day to read this correspondence. I am happy to meet with either of you to discuss further. We desperately need help to build more homes for Tasmanians and in the long run, its cheaper to build them in city centres as infill compared to urban fringe developments. 

Kind Regards,

Councillor Ryan Posselt

Hobart City Council