LAND SPECULATION BY PROPERTY DEVELOPERS
I have written to both the Victorian Planning Minister and Shadow Minister for Planning about the problem of land speculation – property developers purchasing parcels of land, getting zoning and planning approvals, then not actually building anything, but rather reselling the sites at higher prices without having to contribute anything to the land or community.
As Moreland Council CEO Peter Brown has pointed out, this behaviour has a circular effect, with the next developer requesting even more storeys or dwellings as a means of recouping their high purchase costs. The City of Moreland has a number of key sites where this has been going on – the former Tip Top site in Brunswick, the old Coburg High School site, Pentridge and the former Kodak site in North Coburg. In September last year the Kodak site was sold to new developers for $79 million after being bought for $40 million in 2006. All the developers have done is to profit from the increased land value which is a consequence of the infrastructure and community facilities which everyone else’s work and taxes and rates have built up. In the process they have made housing less affordable.
One solution that has been raised to address this issue is to make planning permits for redevelopment sites non-transferable. I believe this could help encourage developers thinking of purchasing key land parcels to actually develop the land, rather than engaging in speculation. I have asked both Victorian Planning Minister and the Shadow Planning Minister to investigate this issue.
KELVIN THOMSON MP
Member for Wills
Monday 24th January, 2011