An aerial of the Harold Park urban renewal site.

Mirvac’s Harold Park urban renewal precinct in Sydney is set to become home to an affordable housing development for low- and middle-income earners.

Land on the site will be sold by the City of Sydney to an affordable housing provider to develop 76 apartments to be opened by late 2018, in order to provide more housing options for key workers.

Long-term affordable rental accommodation typically sees rents capped at 30 per cent of household income.

The 2500 square metre affordable-housing lot was approved for sale by the council at a discounted price of $10.3 million, with the proceeds going to a fund dedicated to delivering more affordable housing.

“The cost of housing in Sydney is reaching a crisis point and local, state and federal governments need to work together to ensure that police officers, nurses, hospitality staff and other essential workers can continue living in the city close to jobs,” Lord Mayor Clover Moore said.

“The soaring cost of land and real estate is making housing in the inner-city less affordable and forcing many lower-income earners to outlying suburbs. This is an economic as well as a social issue for our city.”

Ms Moore said having a diverse range of housing for important for cultural and social vitality, as well as economic growth and liveability.

Up to 20 of the Harold Park units will comply with design guidelines that make them suitable for elderly residents and people with disabilities.

As part of the $1.1 billion Harold Park urban renewal project, developer Mirvac was required by the City of Sydney and the Central Sydney Planning Committee to dedicate land for affordable housing and open space, and reserve the former tram sheds for community use.

The City of Sydney has used a range of mechanism to create more affordable housing, including implementing affordable housing levies in areas permitted by the NSW Government, amending planning controls and negotiating voluntary planning agreements, transferring land to community housing providers and investing in affordable housing projects.