"Landcom on steroids" ... Planning Minister Brad Hazzard says Urbangrowth NSW will have compulsory acquisition powers. Photo: Andrew Quilty

The Planning Minister, Brad Hazzard, said the new body, called Urbangrowth NSW, would be ''Landcom on steroids'' and would be modelled on government agencies in other states that have broad powers to encourage new housing projects.

''We learnt the lessons from Victoria and south-east Queensland and understand the benefits of having a government organisation that can drive delivery of housing,'' he said.

Under plans in the budget, the 30-year-old government agency Landcom will be merged with the 18-month-old Sydney Metropolitan Development Authority, to form a new body to co-ordinate developments on greenfield and existing urban areas.

Although many details of the new body have not been finalised, Mr Hazzard said its key function would be to assemble land, often by using government powers to buy properties and amalgamate them into sites suitable for large-scale developments.

''The critical thing is to identify and put together parcels of land that may not have been identified or where it is not practical for the private sector to do so,'' he said.

Developers have been lobbying for years for a body with these powers, arguing developments are often stopped because one landowner won't sell or holds out for an exorbitant price and stops them assembling the complete development site. The metropolitan development authority has powers to compulsory buy, but operates in only two areas, Redfern-Waterloo and Granville.

In contrast, Urbangrowth NSW will work across the state and identify areas such as Parramatta Road, which has often been cited as suitable for housing, and co-ordinate housing projects.

Urbangrowth NSW could be set up immediately with powers to force landowners to sell the new body their property, Mr Hazzard said, but he wanted to provide some protection for private landowners.

''SMDA have compulsory acquisition powers but there are no fairness provisions in it, we will look to ensure this does not operate in a willy-nilly fashion,'' he said.

The former Coalition leader John Brogden, recently made the chairman of Landcom, will be the head of Urbangrowth NSW.

Developer lobby groups including the Property Council of Australia and the Urban Development Institute of Australia were delighted with the plans for the new body but warned it would need money to buy sites to fulfil its potential.

''The most important thing is the body needs money, one thing we could not see is any major additional funding in the budget,'' the institute's NSW chief executive, Stephen Albin, said.

Mr Hazzard said Landcom already had its own funding but believed the government would be reluctant to agree to Mr Albin's suggestion the new body be given power to borrow money to buy land for development.

The Property Council's NSW executive director, Glenn Byres, said the new body would need to do far more than SMDA, which he said had made little impact on Sydney's historically low rates of housing construction.

''Its brief was not big enough for our liking and it was never used in a way we imagined it could be used,'' he said.

Source: www.smh.com.au/business/property/new-development-body-will-have-power-to-buy-up-land-from-holdouts-20120613-20alv.html