Local government has come under attack from the Business Council of Australia for being too slow in signing off on housing approvals which, it says, is fuelling the country’s housing crisis.

Housing approvals are at “near-decade lows” and proceeding at a “glacial pace”, BCA chief executive Bran Black said. “We’re not signing off on enough homes,” he added.

There needs to be more “transparency to whether councils are doing the basic job of managing home approvals”, Black said. Too often, councils “sit on decisions for months with little clear reasoning”.

Local Government NSW refuted the criticism, calling the BCA’s claims “inaccurate and unhelpful”.

“The scale and intensity of the housing and homelessness crisis is vast and warrants all spheres of government working in genuine partnership to achieve the best outcomes for the community – it won’t be solved by pointing the finger at local government,” LGNSW president Darriea Turley said.

Turley said councils are only able to approve applications received. “With the slowdown in the construction sector, we have seen a decline in the number of applications being submitted and the number of commencements.”

Councils “were absolutely committed” to a fast and effective approvals process, she added. “but not at the cost of compromising best practices and sound planning”.

Councils want to ensure the planning for urban renewal and increased density is done well, Turley said, “in a genuine collaborative way, which has proven to be the most effective way of establishing successful and sustainable communities”.

Black’s remarks follow the release of a BCA report – It’s time to say yes to housing – which calls for significant rezoning of land in order to allow more homes to be built.

Zoning laws are blocking construction of more homes in areas of demand according to the report, which calls on major rezoning reforms to boost Australia’s housing supply.

“We need state and territory governments to unlock more land for more homes in cities and towns across Australia so we can fix this supply crisis,” Black said. “These changes need to allow for greater density and height near good transport services, while at the same time protecting the quality of life, green space and heritage of an area.”

Among the reforms the BCA is calling for:

• an extensive program of land rezoning across major cities and towns to allow medium and high-density development in the vicinity of infrastructure and services
• a transparent process for home builders to put forward proposals to boost housing supply through rezoning, managed by state governments
• consolidated zoning types that are broad and consistent across entire states, providing clarity for home builders.

The National Housing Accord – signed off by federal, state and territory governments in 2023 – commits to building 1.2 million well-located homes over five years. State, territory and local governments will receive $3.5 billion of Commonwealth funding to support the delivery of the target.

However, as the BCA notes, data from the Australian Bureau of Statistics show the number of new homes under construction is already falling well short of expectations. “Until we can fix that problem, it will be very hard to hit our housing targets,” Black said. There was “so much more to do” to meet demand, Black said, adding there was “the need for even more ambition”.