BUILDING BLOCKS

A PRACTICAL APPROACH TO INFRASTRUCTURE AND LAND SUPPLY

Illawarra and Shoalhaven Edition August 2021 UDIA BUILDING BLOCKS NSW & SHOALHAVEN

Message from the CEO

Steve Mann UDIA NSW CEO

The Illawarra Shoalhaven is at a crisis point as we face a rapidly decreasing supply of serviced land for development. The critical shortage of greenfield housing extends throughout the region and is having a major impact on deteriorating housing affordibility.

House sales have seen up to a 50% lift beyond market expectations and we are well ahead of projected lot releases. This is the result of a combination of factors including record low interest rates, regional migration, government home purchase incentives and COVID-19 induced demand for space.

Our 2018 UDIA NSW Building Blocks report proposed several enabling infrastructure projects for the Illawarra Shoalhaven to support greenfield housing in the key urban release areas. Over the past three years, not much has changed.

In-migration is increasing, as people look for regional housing solutions out of . Whilst there have been lots released in West Lake Illawarra and apartment development in the Wollongong CBD and Kiama township, the pace of development is not keeping up with demand and house prices continue to climb.

Over the past 12 months, we have seen house prices rise by more than 20% in Shoalhaven and 12% in Wollongong. Kiama now has an average house price of $1million.

In June 2021, the Minister for Planning and Public Spaces released the Illawarra Shoalhaven Regional Plan 2041 and in August 2021, Transport for NSW (TfNSW) finalised the Illawarra Shoalhaven Regional Transport Plan.

UDIA NSW supports these plans and our new Building Blocks Illawarra Shoalhaven 2021 report, prepared in collaboration with Cardno, identifies the critical enabling infrastructure needed to further support up to 500,000 people that will live in the region by 2041.

To help achieve this, we request Government commits $136.6 million for six recommended water and sewer projects that will unblock 11,600 lots by 2024 in the West Lake Illawarra and Nowra-Bomaderry Urban Release Areas (URA).

Illawarra and Shoalhaven With no funding allocated in the NSW Budget 2021-22 for critical enabling Partner water and sewer infrastructure to support growth in the Illawarra Shoalhaven, we are concerned that the region will continue to suffer from rising house prices, home rental increases, housing stress and homelessness. The development industry will also suffer due to a dwindling greenfield pipeline and a direct threat to construction jobs.

The NSW Government needs to take urgent action to ramp up the delivery of enabling infrastructure to avoid dire consequences for jobs, housing affordability and the wider economy in the region. The recent announcement by the Minister for Planning and Public Spaces to establish a Regional Housing Taskforce to identify solutions to improve housing supply in regional NSW is a positive step and this Building Blocks report will be a key advocacy tool for the region.

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Above: Coast, by Fountaindale Group Cover Image: Coast, Manyana by Fountaindale Group

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West Lake Illawarra

West Lake Illawarra is the primary Urban Release Area (URA) in the Illawarra Shoalhaven region and is proposed for 20,000 dwellings, or 60% of the total 30,000 new houses to be provided in the region by 2041. There are still large areas of unzoned land at West Lake Illawarra, including Calderwood, Cleveland, and Avondale.

We have focused on the enabling infrastructure required to support zoned areas at Yallah Marshall Mount, North Macquarie and Tullimbar, which can result in greenfield housing being released in a three-year time frame.

Building Blocks Illawarra Shoalhaven 2021 recommends four key critical infrastructure projects for the West Lake Illawarra URA, unlocking 8,100 lots within three years, and more in the medium term.

These key projects are critical because without them development cannot proceed. The projects are:

1. Kembla Grange and Yallah Marshall Mount Sewage Pumping Station and associated Trunk Gravity Mains Capacity constraints require a major investment to ensure future development at Huntley, Cleveland and Avondale can proceed. There is also no capacity available to service proposed development at West Dapto Stage 3 and Yallah Marshall Mount.

2. Avondale Reservoir and Trunk Main Without a new reservoir, supply and pressure issues will continue to restrict development.

3. Calderwood Sewage Pumping Station, Rising Main and Trunk Main Future development on the northern side of Calderwood Road, including Town Centre East and the proposed school sites, are reliant on the future Calderwood sewage pumping station (SPS). The pump station was originally to be commissioned by end of 2021 but this has now pushed out to 2026 based on the latest Sydney Water Growth Servicing Plan.

4. Mt Terry Water Lead-In The Mt Terry Water Lead-In is required to service elevated pockets of lots within Calderwood especially those lots above Raised Level (RL) 60m.

LOT YIELD PROJECT (UNLOCKED LOT YIELD COST PER INFRASTRUCTURE COST STAGE WITHIN 3 (TOTAL) LOT YEARS) Kembla Grange and Strategic $56M 5,000 14,500 $3,860 Yallah Marshall Mount Planning SPS and associated Trunk Gravity Mains Avondale Reservoir Option $20M 5,100 7,700 $2,600 and Trunk Main Planning Calderwood SPS, Strategic $18M 1,900 4,500 $4,000 Rising Main and Trunk Planning Main Mt Terry Water Lead-In Concept $2.6M 1,200 1,200 $2,170 Planning TOTAL $96.6M 8,100* 19,000* $5,080 avg

* Some of the projects above have overlapping catchments for the lots benefitted. The total lot calculation seeks to ensure that lots are not double counted.

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West Lake Illawarra

The map below shows only those lots which are within the direct catchment of the projects listed. Lots not benefited by these projects have not been shown.

Mount Cordeaux Kembla Cordeaux Kembla Heights Heights

Farmborough Dombarton Heights Unanderra

Kembla Grange #_ Wongawilli

Brownsville Berkeley Avon AY RW TO MO ES C IN Horsley R West Dapto 1 and 2 P Kanahooka Y Urban Release Area A W H Kembla Grange and G I YMM SPS Project H S Approx. 14,500 Lots E Huntley C Kembla Grange N I SPS Catchment R West Dapto 3 P Dapto Urban Release Area Cleveland

Koonawarra West Dapto 4 Urban Release Area

Avondale Reservoir Project Avondale Approx. 7,700 Lots !* #_ Yallah Yallah Marshall Mount SPS Catchment Marshall Mount West Dapto 5 Haywards Bay Urban Release Area #_

Calderwood SPS Project Approx. 4,500 Lots Calderwood Calderwood Avondale SPS Catchment Reservoir Catchment Oak Flats

Macquarie Pass North RA ROAD Macquarie TONGAR Blackbutt Albion Park I W L LA A RR Rail A H IGH WA Calderwood Albion Park Y Urban Release Area Tullimbar

T Tongarra E Mt Terry Lead in R R Project Y

S Approx. 1,200 Lots T

R E Tullimbar E T Urban Release Area Legend Croom !* Proposed Reservoir

#_ Proposed Pump Station Proposed Water Main Yellow Rock RoberPtsroonposed Gravity Main Proposed Rising/Pressure Main Zoned Land Dunmore

Unzoned Land D

A

Curramore O Release SKtangiginhgts B Hoiullndary R O Approximate Water Servicing O R E Catchment B M Jamberoo A J Critical Infrastructure investment

1:55,000 Scale at A3 needed to accelerate land holdings Map Produced by Cardno NSW/ACT Pty Ltd (WOL) Date: 2021-06-07 | Project: 48982021-550 km Coordinate System: GDA 1994 MGA Zone 56 0 0.5 1 1.5 2 in the Illawarra Map: 48982021-550-GS-003-Critical Infrastructure Illawarra.mxd 05 r Basemap supplied by Esri WEST DAPTO, NSW Figure 1 - Lots within West Lake Illawarra URA that benefit from the listed projects

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Nowra-Bomaderry

Nowra-Bomaderry is the primary URA in Shoalhaven Region and covers land on the north side of the .

This URA presently remains underdeveloped. Building Blocks Illawarra Shoalhaven 2021 has identified two critical water and sewer projects along Moss Vale Road that could unlock 3,500 lots within three years.

1. Moss Vale Road North and South SPS The existing sewer network adjacent to the Moss Vale Road precinct is at capacity and is unable to accept additional loads, even as an interim solution. A new pump station and rising main are required to service these lots.

2. Moss Vale Road Reservoir and Potable Water upgrades The existing reservoir does not have the capacity to support the new Moss Vale Road precinct. A new additional reservoir of appropriate size is required to support the URA, as part of a long-term future supply scheme.

LOT YIELD PROJECT (UNLOCKED LOT YIELD COST PER INFRASTRUCTURE COST STAGE WITHIN 3 (TOTAL) LOT YEARS) Moss Vale Road North Detailed $26M $7,430 and South SPS Design 3,500 3,500 Moss Vale Road Concept $14M $4,000 Reservoir and Potable Design Water upgrades TOTAL $40M 3,500 3,500 $11,428 avg

These key projects are critical because without them development cannot proceed.

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Nowra-BomaderryRed Rocks

Beaumont M OSS VA L E ROAD

Browns The map belowMountain shows only those lots which are within the direct catchment of the projects listed. Lots not benefited by these projects have not been shown and rely on other critical infrastructure.

Cambewarra

Additional 3.5ML Reservoir PRINCES HIG !* HWAY

Moss Vale Road Reservoir & PW upgrades Approx 3500 lots

Meroo Meadow

APA23 Connection #_

#_ MVRN SPS

Tapitallee

SPS08 #_ #_ Bolong MVRS SPS

Moss Vale Road Diversion Bangalee North & South SPS Approx. 3,500 lots Bomaderry

North Nowra D OA LONG R BO

Longreach

Terara

Legend

!* Proposed Reservoir

#_ Proposed Sewer Pump Station Nowra

T

E

Proposed Water Main Mundamia E

R

T

Proposed Gravity Sewer S

T Proposed Pressure Main S A

E Eastern Gas Pipeline (Jemena) Zoned Land

Critical Infrastructure investment 1:30,000 Scale at A3 needed to accelerate land holdings Map Produced by Cardno NSW/ACT Pty Ltd (WOL) m Date: 2021-06-07 | Project: 48982021-550 Coordinate System: GDA 1994 MGA Zone 56 0 250 500 750 1,000 in the Shoalhaven Map: 48982021-550-GS-004-Critical Infrastructure Shoal .mxd 03 r Basemap supplied by Esri NOWRA, NSW

Figure 2 - Lots within Nowra Bomaderry URA that benefit from the listed projects

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Building Blocks Catalytic Infrastructure Methodology

UDIA and Cardno have identified catalyst infrastructure on land that is ‘ready to go’. We pinpointed areas where the last missing piece of infrastructure cannot be delivered by the development industry alone.

Our focus was on infrastructure, including roads, electricity, sewer, and water that can be delivered within 3 years.

UDIA NSW and Cardno have developed a framework that addresses the current market conditions and unlocks the most supply:

• Greenfield land released and/or zoned for residential development in the key urban release areas of the Illawarra Shoalhaven that can supply dwellings to market within 3 years. • Infrastructure projects that can be delivered within a 3-year time frame. • Infrastructure projects unlikely or unable to be delivered by developers.

BUILDING BLOCKS METHODOLOGY

Identify stakeholders, growth Review technical inputs and Infrastructure analysis and dwelling yields infrastructure projects

• DPIE Development Scenarios • Technical Reports • Identify Project Status • Development Pipeline (UDP) • SIC and LUIIP Infrastructure (Funded/Unfunded, Delivered • VPAs, Master Plans, ILPs etc Schedules etc) • Land Ownership • Identify Infrastructure Trigger • Review DPIE Housing Supply Points Forecasts • Define Infrastructure “Catchments” • Identify Funding Source and Delivery Time frames

Evaluation & recommendation Development industry ground of projects truthing

• Review & identify • Review Housing Supply infrastructure projects that Forecast Data with developer can release development intent within 3 years • Identify infrastructure • Identify High-Level Costs delivery & funding issues on • Calculate $ per dwelling key sites • Finalise recommended projects

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So What’s Changed since Building Blocks 2018

In the three years since Building Blocks Illawarra Shoalhaven 2018 was released, we have seen record dwelling completions in greenfield markets in 2018-19, followed by a significant slowdown in 2019-20. The response to COVID-19 towards greenfield housing, regional migration and the roll-out of HomeBuilder in mid-late 2020, has caused a major rebound to occur. We now have a fast-depleting supply of zoned and serviced greenfield land resulting in a housing supply and emerging affordability crisis.

In 2018, UDIA NSW identified 15 water, sewer, road, and electrical utility projects to support growth in the key URAs in the Illawarra Shoalhaven region. Since this time, there has not been a significant roll-out of enabling infrastructure to sustain greenfield supply.

Only a handful of these projects have progressed to design, including: Moss Vale Road and intersections, sewer pumping stations at Nowra-Bomadery, Northcliffe Drive extension. Some are due to commence construction within 12 months at Nowra-Bomaderry and 24 months at Mundamia. However, most projects previously identified have been deferred or delayed, especially at West Lake Illawarra.

This report has focused on those projects that are critical to housing release in these Urban Release Areas. However, we support funding for those secondary projects identified in Appendix A to ensure integrated planning and infrastructure outcomes.

The lack of a greenfield pipeline continues to present a major problem and now is the time to respond with firm infrastructure measures to offset an impending housing affordability crisis.

Conclusion

There is a land availability crisis in the Illawarra Shoalhaven region. This crisis can be averted through the funding of critical enabling infrastructure. Building Blocks Illawarra Shoalhaven 2021 identifies practical and realistic infrastructure solutions to help sustain greenfield housing supply in the region at the key urban release areas of West Lake Illawarra and Nowra-Bomaderry.

We recommend that the NSW Government provides direct funding ($136.6 million) for six water and sewer projects identified in the key urban release areas to unlock 13,600 greenfield lots within a three-year time frame.

We hope that the NSW Government commits to the projects we have recommended to sustain the greenfield supply, achieve housing affordability, and support the ongoing economic recovery in NSW.

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UDIA BUILDING BLOCKS NSW H U N T E R R E G I O N APPENDIX A – ILLAWARRA AND SHOALHAVEN REGION CATALYST ENABLING INFRASTRUCTURE

In the Building Blocks 2018 report, a number of projects were identified as being critical enabling infrastructure to support development in the Region. The following table identifies those projects previously identified by the report and updates their current status.

Urban Release Area / Infrastructure Current Status Precinct

West Lake Illawarra

Hayes Lane extension Road The Hayes Lane extension is now a part of the Western Ring Road project which has not progressed other than the Hayes Lane Bridge which is currently in concept design phase. The current contributions plan indicates delivery timing of 2021- 2051. Yallah Road / Marshall Road This project is currently only in investigation phase. The current Mount Road contributions plan indicates delivery timing of 2031-2056. SPS at Kembla Grange Sewer Some concept planning has occurred, but the project has been deferred by Sydney Water. This project is identified in the 2021 Building Blocks critical infrastructure project list. SPS and Rising Main Sewer Project has been delayed and is identified in the current Sydney (Calderwood) Water Growth Servicing Plan for delivery beyond 2025. This project is identified in the 2021 Building Blocks critical infrastructure project list.

SPS and Rising Sewer Projects have been delayed and is identified in the current Main and Lead-in (Yallah / Sydney Water Growth Servicing Plan for delivery beyond 2025. Marshall Mount Road) This project is identified in the 2021 Building Blocks critical infrastructure project list. Cleveland - Kembla Grange Sewer The project is identified in the current Sydney Water Growth rising main SPS connection Servicing Plan for delivery beyond 2025. This project is identified in the 2021 Building Blocks critical infrastructure project list.

Northcliffe Drive extension Road Some design work has commenced, but the current contributions plan indicates delivery timing of 2031-2036.

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Urban Release Area / Infrastructure Current Status Precinct Nowra Bomaderry Moss Vale Road Upgrade Road UDIA BUILDING BLOCKS Shoalhaven City Council (SCC) and Transport for NSW are NSW H U N T E R R E G I O N currently working on the draft concept designs to assist with the Housing Acceleration Fund (HAF) funded roundabout project. Two Moss Vale Road Road First roundabout into both the North and South of the precinct Intersections has HAF funding. Design is complete and construction is expected to commence in July 2021. There is no funding commitment to a 2nd roundabout (Main Road/Moss Vale Road) based on SCC designs. Bells Lane/Moss Vale Road/Far North Collector Road intersection is in detailed design with Federal Government funding. Electrical Lead In Electrical Endeavour Energy has advised that there is capacity for early stages of development, which is subject to further assessment.

Electrical Zone Substation Electrical Endeavour Energy is presently investigating a suitable site and discussions have commenced with property owners to service the Moss Vale Road precincts (North and South) in the longer term.

2 x Sewer Pumping Stations Sewer Both SPS’s are in detailed design and construction to commence at the start of 2022.

Mundamia URA

Update Road Road SCC has secured funding from the NSW Government’s Low-Cost Loan Initiative (LCLI) to upgrade three intersections on Yalwal Road (at George Evans Road, Rannoch Drive, Lightwood Drive). Delivery deadline is June 2023.

Intersection Yalwal Road and Road The SCC Contributions Plan includes all works, as well as design Albatross Road and construction. Extension of George Evans Road SCC has secured LCLI funding to deliver, which could also occur Road from Roundabout at via a planning agreement with first developer. Delivery deadline University is June 2023. SPS and Rising Main Sewer Design work partially complete and SCC will commence construction at the initial stages of the URA’s development.

11 UDIA NSW Level 5, 56 Clarence St, Sydney NSW 2000 P: 02 9262 1214 E: [email protected] W: www.udiansw.com.au

Cardno 16 Burelli St, Wollongong, NSW 2500 P: (02) 4231 9600 | W: www.cardno.com