Landcom criticised for slow pace in delivering new homes
Last month, Landcom CEO Alex Wendler revealed the state developer had “decided not to acquire three publicly owned sites in Sydney’s west despite working with Landcom”. [Office of Strategic Lands] “To develop the sites for several years.”
Problem? The two institutions could not agree on the land value.
Opposition planning spokesman Chris Rath was incredulous at the budget estimates: “This is state-owned land that a government agency called Landcom wants to buy for development and you couldn’t agree on a price. Why don’t you get this land for free?”
His views are also shared in politics. Many people cannot understand why a taxpayer-funded government developer is using funds to purchase land currently owned by taxpayers.
Planning Minister Paul Scully responded to Rath: “This is a policy decision.” “This is not something Landcom made up. This is one of accounting standards and treasury policy.”
Treasury policy requires both Landcom and Homes NSW to pay market value rather than current use for land that is often vacant, known as its “highest and best use” or highest possible valuation.
This is one of the reasons why neither Landcom nor Homes NSW have purchased more sites through the audit of excess public land, despite the first and second call for designated land. They purchased seven of approximately 60 sites.
Instead, most of the sites have been sold to developers or private buyers through public auctions since April 2025, generating more than $90 million. Although Premier Chris Minns said surplus land sales would provide 21,000 new homes, only five of the sites sold so far have had a development application submitted.
In August, the government said state developers had conducted due diligence on about 18 properties. Landcom took the lead with two men. Landcom, a state-owned company that must pay 70 per cent of net profits after tax to the government as dividends, has announced two sites: Carpentry in Annandale and another in Chatswood, which the government says together will offer more than 2000 homes.
Only two of 10 land control sites evaluated by Landcom were acquired in the 2024-25 financial year, according to the developer’s last financial year business plan. Homes NSW purchased three sites in Camden, Box Hill and Menai for $30.4 million.
Laurence Troy, professor of urbanism at the University of Sydney, said: “I don’t think there is any particular justification for paying full freight. If we have a housing crisis, why don’t we use the full range of government tools to solve the problem?”
Wendler said his agency is a “price setter” and that “we are not part of the bureaucracy that decides policy.”
Landcom has turned down vacant land next door to the Royal North Shore Hospital in St Leonards. Property and Development NSW, the body leading the inspection, said the site was “perfectly located to provide high quality housing and housing for key workers in a high amenity area and with excellent public transport links”. Areas in Chippendale, Parramatta and Rouse Hill are all sold on the private market.
There is dismay within the Labor Party that Landcom is not acting urgently enough to address the housing crisis. A senior party source said: “There are concerns within the government about Landcom’s performance in providing emergency housing at a time when the priority is clearly to increase supply.”
Landcom has a target of delivering 1,800 affordable homes by June 2029. The agency had identified only 1,477 residences so far. The total sales target for the last two years was 8081. Landcom has achieved approximately 50 percent of this target.
Wendler said his agency is working with faith-based and community housing providers to close the affordable housing gap. He attributed the deal gap to a freeze on state-owned land sales in May 2023 and developers asking for a payment delay.
“There’s nothing we did wrong,” he said.
Reflecting the view of private developers, Wendler said Landcom withdrew the bid because the cost of construction for 1,000 homes in Edmondson Park was higher than the price offered.
Troy called on the state government to return Landcom’s authority to the intent it had when it was first established under the Whitlam government. During downturns in the development cycle when the private market struggled to provide housing, the state developer would act as a countercyclical force, ensuring consistent supply.
“They should become a more significant player in housing supply rather than just facilitating and planning new housing,” he said.
“History tells you that institutions like Landcom can offer housing cheaper than anyone else because of the advantages they have as a government-backed institution. If they use those capacities, they can supply much more consistently.”
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Max Maddison is the state political correspondent for The Sydney Morning Herald.
