Councils across New South Wales have called on the state government to establish a $5 billion interest-free loan facility to fund infrastructure projects they say are preventing new housing developments from proceeding.
The proposal is outlined in a new plan, Unlocking Homes, released by Local Government NSW (LGNSW), the peak body representing councils across the state.
LGNSW said the measures could help unlock up to 70,000 homes, particularly in regional areas and Western Sydney where infrastructure constraints are limiting housing supply.
Infrastructure funding proposal
Under the plan, councils would gain access to a $5 billion interest-free loan facility to finance upfront infrastructure works including roads, water, sewage and stormwater systems.
LGNSW said councils would repay the loans after receiving developer contributions linked to housing projects.
The organisation argues that a lack of early infrastructure investment is delaying residential construction in areas targeted for growth.
Darcy Byrne, president of LGNSW and mayor of Inner West Council, said infrastructure shortages were a major barrier to new housing.
“We are seeing across Western Sydney, in particular, that without up-front investment in roads, water, sewage and stormwater, housing is simply not being built,” Byrne said.
Call for broader developer contributions
The plan also recommends expanding the range of projects that can be funded through developer contributions.
LGNSW wants councils to be able to use those funds for social infrastructure, including libraries, childcare facilities and swimming pools.
Byrne said local government agreed with the NSW government’s assessment that the housing crisis remained the state’s biggest challenge.
“We agree with the NSW Government that the housing crisis is the number one challenge facing the State, but we also know that too little investment in the basic infrastructure needed for new homes is making the crisis worse,” he said.
“Put simply, if we are serious about actually fixing the housing crisis, we need the NSW Government to do more to fix the infrastructure roadblocks that are preventing housing supply.”
The proposal has been put forward as councils seek additional support to accelerate housing construction and address infrastructure gaps across growing communities.