A former chair of the Property Council in the Hunter says mandating social housing targets in inner-city development projects is "likely to kill" them.
The NSW government revealed last week that it had set a 30 per cent minimum requirement for affordable and social housing on the "premium" Honeysuckle HQ site as part of its efforts to improve housing supply.
Neil Petherbridge, who was Property Council Hunter chair from 2017 to 2022, said he could not comment about specific projects but believed social housing targets were not appropriate for redevelopments designed to drive economic growth.
"Incorporating large slabs of social housing into a development is likely to kill a whole development," he said.
"We also know from history that building large towers of social housing leads to social issues and hence recent trends have been to spread them out through the suburbs."
The Herald understands social and community housing already has been integrated into several private apartment buildings near Newcastle beach and in Wickham.
A Newcastle woman who recently bought an apartment in a new development near the Honeysuckle HQ site said she did not support social housing at the "gateway" to the city.
"I don't have a problem with social housing because I have family in social housing and my husband comes from social housing, but I just feel when you get off at a train station and we're trying to build this beautiful city, that should be for everyone who brings money in and gives money back for social housing," she said.
"Not all people in social housing are a problem, but you do get your problem areas.
"That area there being the gateway to the city, if people don't feel safe or they're confronted even by the small 20 per cent, they won't come."
The woman was concerned social housing targets would discourage investment in the inner-city.
"I don't think people will buy in areas where there is social housing.
"I know they've put them into other unit blocks and there's been problems.
"I just don't think it's the right location. Two blocks back away from where you're going to bring people in, fine.
"They had all these businesses that were going to go in there. That was what the original plan was. It looked like a great entry into the city.
"And now you're talking about social housing. People probably won't invest, and that's the unfortunate thing, because it does come with that stigma.
"Why build it in that position where it's a prime location that can give more money back to the city. I don't get it."
The social housing waiting list has grown by 45 per cent in Newcastle and Lake Macquarie since June 2021 and now stands at 3186.
The median wait time at June 30 was 22.5 months and the median wait for priority housing was 3.2 months.
Mr Petherbridge, who said his views were not necessarily those of the Property Council, supported "build-to-rent" affordable housing as a viable component of key redevelopment sites.
"We could even look at some innovation like a rent-to-buy model," he said.
He said governments could mandate that a developer build social housing on nearby sites.
"Nobody can deny the desperate need for social housing, however, you could build twice as many dwellings at Broadmeadow in Hunter Park for the same investment or spread them across the surrounding suburbs in blocks of four to six and achieve a much better outcome for the occupants."
Community Housing Industry Association NSW's head of public affairs, Caitlin McDowell, said the evidence showed there "isn't quite as much to fear as people imagine".
"There are really positive examples of mixed-tenure developments going back the best part of a decade in NSW, particularly in Sydney, where you've got developments of significant size and scale," she said.
"You're looking at anywhere from 200 to 800 properties.
"They often have a large proportion of private market housing as well and a lower mix of social and affordable housing.
"I think the key thing is you can't tell from the outside which tenure belongs to which resident.
"We know that's important in making people feel safe. It helps to reduce stigmatisation. It help to create positive neighbourhood effects."
The three-hectare Honeysuckle HQ site is the last parcel of public land to be sold as part of the 30-year-old redevelopment of Newcastle's former industrial waterfront.
The site stretches from Cottage Creek to the Wickham marina and includes a one-hectare land parcel on the southern side of Honeysuckle Drive with a height limit up to 90 metres.
Hunter and Central Coast Development Corporation, which is managing the land sale, said last week that it had not abandoned plans for a "dynamic" mixed-use development at Honeysuckle HQ, despite increasing the affordable and social housing component of the project.
HCCDC has whittled down the sale process to three shortlisted proponents.
Ms McDowell said the housing affordability crisis meant many more people across NSW needed equitable access to somewhere to live.
"We need to ask why couldn't social housing work in this context?" she said.
"People living in social housing have dreams and aspirations and hopes for the future just like anyone else in the community.
"There are people in social and affordable housing who do want to have the opportunity, where possible, to participate in the economic life of their communities.
"Having an opportunity to live in a community which is close to those opportunities, like work and education and amenities people need in order to live a good life, there's no reason why we can't imagine a future where social housing is part of what you would imagine a good strong community to be."
