SDA housing, co-living projects and ethical investment models is where Australia should be pushing boundaries. Projects built for people who need a safe roof over their head. Yet instead of clearing the way to make that happen, Australia has built an extra room onto the industry to store the growing pile of red tape straggling the building industry.
Red tape smothers good ideas before they get a chance to breathe. The building sector cops the worst of it. We’re not talking about applying for a casino licence, we’re talking about building homes for people who can’t wait another five years for the paperwork to be in order.
The latest AICD and Mandala Partners paper confirms what operators in this sector have been saying for years. Compliance has ballooned from chewing up a quarter of board time to more than half. It’s dressed up as governance, but it’s really admin bloat. Out of the $160 billion spent on compliance every year, a huge slice goes into projects that stall or die because the rulebook is so tangled the only people winning are the lawyers.
In SDA, the regulatory load is a place where the intentions are good, but once you’re in the system, it feels like you’re on another planet. Operators battle layers of oversight, understand one, only to find two more buried underneath. They’re expected to navigate a process designed by a committee that has never spoken to an SDA provider. While compliance teams and lawyers are not short of work, the thing that actually matters, getting people into homes, is pushed to the back of the queue.
Co-living and ethical housing don’t fare any better. It takes two years to approve a build that takes eight months to construct. Mandala’s link between compliance-heavy industries and lower capital growth is painfully obvious: when your day is spent proving you’re not a risk, there’s no time left to build anything.
Meanwhile, charities and NFPs, the lifeblood of SDA, are sinking under the weight. Compliance roles in healthcare, aged care and disability have surged 355% since 2010. These are the people doing the hardest, most impactful work, and yet they’re shuffling paperwork instead of delivering support.
The saddest part is that regulation should make things better. Instead, it’s made Australia one of the most awkward countries in the developed world to get a socially beneficial project off the ground. Our tax settings reflect this absurdity, where there’s no meaningful incentive to downsize, encouragement for modern housing models, and nothing that speeds up ethical developments. The system assumes every operator is a potential problem and every idea is a potential mess.
The AICD reforms are practical and sensible; lift reporting thresholds, clean up the regulatory requirements instead of adding fresh clutter and question whether every new regulation is needed. These changes give the SDA, co-living and ethical housing
Australia doesn’t have a shortage of builders, money or ambition. What we do have is a system that doesn’t know when to get out of the way. Years are wasted wrestling with forms, permits and contradictory rules, and the people who lose the most are the ones waiting for homes that should’ve been built.