Want affordable housing in NSW? Don’t buy strata

In NSW particularly, government housing affordability policy is focused on promoting apartment living. However, the breadth and depth of problems within this sector are insufficiently recognised, let alone adequately addressed, to an extent that threatens the long-term success of this policy push. Buyers beware!

Loathsome bellicose fantasists are currently treating the whole world to a harsh lesson in toxic public policy and governance.

Dr Who fans may perceive in America an actual hostile anti-universe intruding into our own: the Orange Wiggle is a nasty idiot; a black bullet-proof limousine stands in for the yellow Wiggle car; ghastly global evil-doers and slavering sycophants have replaced gleeful kiddies; lies are the new truth; etcetera.

Elsewhere, having misled his nation and shrunk its global outputs to a single, little sought commodity – the export of misery – a deluded Russian fantasist imagines that bombing the citizens of another country is a winning way to encourage them to join his own.

Clearly, all this will end very badly. Putin is already on the International Criminal Court’s wanted list. When enough Americans realise their emperor has no clothes (see cartoon below), the 2024 film “Civil War” could be prophetic, perhaps even a Mussolini-like rendezvous with a Washington lamp post.

Adequacy of housing policy

Fortunately, our housing policy doesn’t quite exhibit these lurid characteristics, but predictions of catastrophic consequences have been evident for some time now.

Signature state government solutions to the worsening housing crisis currently emphasise high density development around transport nodes – TODs (Transit Oriented Development) – delivered by for-profit developers.

The idea has been around for some time, and a lot of administrative energy is being expended to jolly it along.

Is this the best answer to our affordable housing crisis? The long answer is NO; but why?

It’s the wrong model

The first reason is obvious. Just as Rolls Royce was never known for building cars for the people, housing affordability cannot be delivered by an industry geared to generate maximum profit from expensive land acquisition and complex construction projects.

As its name suggests, only the not-for-profit sector overcomes this objection.

Poor “hardware” and “software”

The second reason is that strata development in New South Wales continues to suffer from too many “hardware” and “software” faults.

Hardware: the title image is from a 06 December 2023 Daily Telegraph article titled “More than half of NSW strata buildings have defects, new research reveals”.

In 2018, the now infamous Opal Tower came to symbolise an industry that only recently had been let off the regulatory leash but went on to destroy the wealth of home purchasers with unaffordable building faults.

The consequent outrage led to the appointment of a new NSW Building Commissioner, David Chandler, whose articles raising the problems of this sector had previously spiced the pages of The Fifth Estate.

“Software” refers to the complex governance necessary to manage the complex “hardware” of shared property.

An ABC Four Corners program revealed that the intertwining arrangements of insurances, contracts, governing structures, and other arrangements required to smooth the relationships between occupants of multiply owned residential property had long been comprehensively “gamed” by developers, management agents, maintenance companies and other grifters for their own profit, all at the expense of those housed.

Though the state has started to focus its regulatory gaze on this “fourth tier of government” (the management of shared dwellings) there is, as yet, little news of substantial improvement.

It gets worse.

As reviewed more recently here, administration of these statutory obligations is notoriously fickle. Personal accounts of living in strata communities are rife with stories of managerial incompetence and pettifogging interference in personal lives to an extent that would be intolerable and unnecessary in discreetly owned residential property. Remedy is well beyond the reach of any legislative solution.

These shortcomings are largely overcome by attentive NFP developers who have a determined community focus, such as the development of housing cooperatives like Nightingale. The results render both the experience and dwelling product closer to that of many worthy European examples.

Then there’s the carbon cost…

Reflecting on the dubious environmental benefits of tall buildings, Martha Dillon in The Architectural Review reports on analysis by engineering company Buro Harpold’s Natasha Watson, whose team’s “modelling shows that the efficiency of structural material usage, by floor area, drops above just three storeys” (emphasis added). 

Dillon adds that, “According to a 2015 study commissioned by the Council on Tall Buildings and Urban Habitat, the whole life emissions of both energy use and materials for a 120 metre concrete and steel structure are nearly five times higher than those of its 60 m equivalent”, and that “even at city level, the huge carbon cost of skyscrapers fails to outweigh any potential benefits that they might achieve from restraining urban sprawl”.

“This means that high-density low-rise cities such as Paris are more carbon-efficient than high-density high-rise cities such as New York.”

…and of course land utilisation

Dillon goes on to query the popularity of tall buildings and concurs with a number of authors that the predominance of tall buildings in many cities merely reflects higher unit land prices –  developers very reasonably need to recover the cost of developable land after all – and, it generally follows, greater socio-economic segregation within those cities.

Though higher densities in towers are likely the only solution for already-costly land within dense city centres and around valuable urban infrastructure, like new metro stations, yet even in these instances Paris and Barcelona provide powerful counter examples.

Also, it’s an investment…

These problems are exacerbated by the “financialisation of housing”.

For too many, housing has become an asset investment class rather than shelter, and the logics of the market have overridden accommodation concerns, which are in turn reflected in legislative and taxation settings, often to the detriment of those housed, like renters.

…but most importantly, strata is “un-Australian”

In a recent article in The Fifth Estate Cathy Sherry contrasted strata law pitfalls with Torrens title ownership of land containing a single dwelling.

A long-standing and still preferred type of property ownership in Australia, lovingly parodied in “The Castle”, the idea has deep roots that extend back at least to South Australia’s establishment, which was partly funded on the speculative sale of land to disgusted British small-scale investors whose personal betterment dreams were frustrated by Britain’s land-owning classes.

For ill or good, both political hues tacitly agree this is still the bedrock of Australian national affordable suburbanism.

For example, the recently appointed national Minister for Cities, Homelessness and Affordable Housing Clare O’Neil observed, “We need more housing of all kinds, and medium-density housing in the middle-ring suburbs is obviously going to be a really important part of the mix”.

This concurs with Peter Barber’s observations, also evinced in his own social and affordable housing work (which recently won for him the Royal Institute of British Architects’ Gold Medal); “I am interested in medium-rise higher-density housing and often try to explore the possibility of achieving this with houses instead of flats” (emphasis added).

“Missing middle” development, promoted by both hues of government, seeks to increase the density of long-standing and culturally accepted settlement patterns in Australia, not impose multi-residential higher density on to a resistant population.

Reconfiguring suburban lots has long been a common approach among West Coast American cities that share similar settlement patterns to those in Australia.

For example, Los Angeles has long promoted ADU’s (Auxiliary Dwelling Units) on existing suburban lots and is currently seeking more densification insights with its “Small lots, big impacts” competition.

Have the problems been licked?

Are we now heading for less troubled affordability waters?

Sadly no.

To be clear, strata living definitely has a place in Australia’s cities but not as the primary means of addressing our housing affordability crisis.

Despite years of determined drive by ministers from both parties, “missing middle” planning changes are being strongly resisted by the comfortably housed.

Hence, the balance of the national minister’s portfolio underscores the significance of her remarks.

Unless all urban denizens – not just those with dedicated moorings for their “tinnies” – can be adequately housed, our cities cannot be truly productive.

Sadly, and returning to the theme of toxic policy, too many of our urban endeavours are terminally frustrated, consider for example our intractably persistent “urban hellscapes”.

So, what to conclude? It’s a conundrum; but if one is seeking affordable housing DON’T buy “for profit” strata in New South Wales.

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