“Paltry” planning requirements for affordable housing across Sydney pale in comparison with cities such as London, say planners who believe the state government must intervene to disrupt the status quo of councils frequently rejecting development proposals.
Efforts to boost affordable housing should be focused in suburbs surrounding Sydney’s metro and train stations, the managing director of prominent architecture firm Bates Smart, Philip Vivian, said. However a “planning vacuum” along these corridors is effectively giving developers “windfall gains” with no requirement to build the types of homes the city needs.
Instead, Vivian said the state government should step in to deal with housing proposals within a short radius of stations – along new and existing lines – and incentivise developers to include ambitious affordable housing components through fast-tracking planning approvals.
Councils across Sydney broadly have low requirements for how much of a new private developer’s housing project must be affordable housing, which is commonly 5% and can be lower, Vivian said.
“For years we have not been creating affordable housing and we’ve set the benchmark way too low,” Vivian said. “The City of London aims for a minimum of 30%, and what’s fascinating in their rules is if a developer provides 35% or more of their project as affordable housing, you are fast-tracked through the DA [development approval] system, and you have lower requirements.”
Vivian said requiring 20% affordable housing from developers building projects within 400 metres, or a five minute walk, from metro and train stations would provide a fairer return for the public who has “paid a fortune for the transport system” and is now in the grips of a housing and rental crisis.
However Vivian said current affordable housing requirements in Sydney are acting as a disincentive to developers, who broadly work to a 20% profit margin on residential developments. “If there’s a 5% requirement, it is coming out of the floorspace they can build under that zoning,” he said.
For strategies such as his to work, the 20% affordable housing requirement should be bonus homes the developers can build on top of the zoning limit, so there is a financial incentive to build less-lucrative affordable housing.
Currently, state governments only govern development proposals for the land above stations, while councils are responsible for surrounding areas – with medium density and affordable development proposals often hamstrung by vocal opposition from the local community.
Vivian believes the state government must “take control” of areas within a 400m radius of stations, to allow for greater density zoning.
The idea is similar to recently proposed planning rule changes that would see the state government deal with residential development projects with a capital investment of more than $100m and 20% affordable housing – which generated concern from councils worried it would strip them of power.
The chief executive of the Committee for Sydney, Eamon Waterford, supported ideas such as incentivising developers to build more affordable housing with faster approvals. “But given the scale of the challenge we have now, let’s not pretend the private sector can solve the affordable housing crisis alone.”
Waterford backed calls for the state government “to step in in precincts around stations” and developer master plans “rather than leaving it all to local councils”.
“We have a lot of train stations in Sydney with low density around them,” he said. “It’s not reasonable to assume a local government can effectively manage a city-wide challenge like this when dealing with a local community so intractably resistant to growth”.
Waterford also stressed high-density towers were not the only solution for development around stations, pointing to inner-Sydney’s history of medium density low-rise housing. “Look at somewhere like Newtown. It’s one of the densest suburbs in Sydney and there are no skyscrapers.”
The call for action comes after the new housing minister in New South Wales, Rose Jackson, cited London’s ambitious affordable housing targets when declaring anti-development in Sydney communities would have to “get out of the way”.
However the Minns government is yet to set targets or introduce new policies to address the housing shortage. It went to the election with a 30% target for affordable and social housing that only applies to surplus public land. Developers Lendlease and Mirvac have backed that requirement but not such a rule for private developments.
The Minns government has asked the Greater Cities Commission to “align housing targets with population growth and key transport infrastructure”, according to an agency spokesperson.
“Affordable housing is also one of the government’s priorities and we will be looking at ways to increase this important type of housing in NSW,” the spokesperson said.
“This includes things like what incentives we may consider to encourage developers to incorporate more affordable housing projects.”
