Sydney’s affordable housing crisis seems to have multiple state agencies and local councils all competing with different policies to solve the crisis, says the Urban Taskforce.
“The recent announcement that Landcom is now to be the state government agency to set targets for affordable housing rental homes in Sydney seems to overlap the Greater Sydney Commission’s role as well as the Department of Planning’s policy position on affordable housing,” says Urban Taskforce CEO, Chris Johnson. “On top of this every council in metropolitan Sydney is establishing their own separate approach with even more ambitious affordable housing targets than the three state government agencies.”
“Recently the elected councillors of the Inner West Council threw out the robust affordable housing target proposed by the previous administrator Richard Pearson for 15% of all new housing to be affordable. In a strongly worded minute to the council dated 31 October 2017, the council has doubled the target to 30% of all new housing to be affordable and on government owned land a massive target of 50% of homes should be affordable. Essentially this means that any developer of new housing must give 30% or 50% of the homes they build to the council and hope that the remains 70% or 50% will still be financially viable”
“The robust figures for the Inner West Council are ahead of the City of Parramatta’s recent proposal for 5% of all existing zoned housing and 10% of all uplift zoned housing to be given to council free-of-charge for use as affordable housing.”
“The Urban Taskforce has reviewed the financial feasibility report behind the City of Parramatta proposal and has found it has many errors that fundamentally questions the whole approach. It seems that land costs were wrong by over $100 million in some cases and our concern is that the flawed economic reports are giving council’s confidence that the levies can easily be accommodated by the development industry.”
“The Chief Executive of Landcom, John Brogden, has said he will renegotiate the 3% affordable housing levy currently applied to the giant Green Square project long after the land has been bought with a clear understanding of the levies required.”
“There seems to be a feeding frenzy driven by an emotional need to produce as many affordable homes as possible to help offset the escalating costs of Sydney’s housing. The approach seems to be to simply tell the developers of new housing to provide free of charge 10% or 30% or even 50% of whatever they build to Landcom or to the Inner West Council or to the City of Parramatta Council. The Greater Sydney Commission does seem to have some understanding of the economics of building new housing when they qualify their targets. They say that only in special areas a 5% to 10% levy could be applied only on the rezoning uplift component and only if this is economically viable. The rest of the cavalier bushrangers are simply demanding as much treasure as they can get out of the property industry.”
‘What they completely fail to understand is that the cost of any housing provided free of charge is added onto the cost of all the other homes in that development, which drives house prices even higher. “
“The Urban Taskforce has consistently said that affordable housing can be provided if there is sufficient incentive. This will generally be through the provision of increased floor space to make the donation of housing units viable. A detailed proposal by the Urban Taskforce has suggested that 40,000 affordable homes could be delivered in Sydney over 10 years if the Affordable Rental Housing SEPP was slightly modified.”
“The Urban Taskforce believes a clear single agency in the NSW Government must drive policy on affordable housing. The agency must understand the realities of the housing market and the implications of any levy on overall housing supply. If levies are too high then new housing projects will not proceed. The lack of leadership is leading to a chaotic feeding frenzy by state and local government.
