Professional services firm PwC has entered the affordable housing fray, suggesting a “simple but potentially profound” solution that would allow for the increased densification of low density areas while providing additional affordable rental units for Sydney.

Land currently locked up as R2 low density in Sydney

Its Affordable Housing Initiative proposes an amendment to the NSW planning rules that would allow multi-dwelling housing in R2 low density zoned land on lots larger than 600 square metres, provided that a proportion of the dwellings are designated as affordable rental housing.

The changes, to State Environment Planning Policy (Affordable Rental Housing) 2009 (AHSEPP), would both address the “missing middle” of medium density development and the lack of affordable rental properties.

“We believe the key to gaining traction on affordable housing is not just building more high-rise units, but rather by addressing the so-called ‘missing middle’ – housing options like more townhouses, terraces and manor houses, which are more energy efficient than detached housing and also offer more variety and flexibility for Sydney’s changing demographic,” a report on the initiative said.

The small scale of development would attract individuals, small developers and community housing providers, the report said, who would be incentivised to undertake development of between 3-10 dwellings on single residential lots.

The scale of development is also designed to reduce community concern.

The size and size and scale of projects would be appropriate to their surroundings, and provide an uplift in density without compromising the character of the area or placing a significant strain on surrounding infrastructure, the report said.

Rather than proposing amendments to local LEPs to permit multi-dwelling development in R2 zones, the AHSEPP would allow for the multi-dwelling land use to be permissible with consent only if affordable housing were included.

“This condition would have a collateral benefit of steadying the pace of additional multi-dwelling houses within R2 zones, maintaining the balance of single dwellings and multi-dwelling housing.”

Whether residents would go for the plan is another question, however, with pushes for increased densification routinely facing community opposition. For example, recent planning changes in Melbourne have been opposed due to concerns around heritage.

The plan could also take advantage of the NSW Government’s push to extend complying development to medium density housing types.

The report noted, however, that medium density development was not appropriate for all areas, but that there were already areas where complying development could not be undertaken, including heritage conservation areas and ecologically and environmentally sensitive areas.

In the end, increases in density are unavoidable giving rising populations and the need to curtail urban sprawl. PwC’s view is that low-rise townhouse-style development can provide that density without compromising on neighbourhood character.

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  1. It is one solution, small to medium sized developer friendly, but ultimately does not consider the lack of integration of services (hopefully the developer will co-locate child care services and other family friendly needs with the development. Worse case scenario – the land will be flipped by developers, eventually residential accommodation will be built but the underlying land value rise will be passed onto the new purchasers. Not really addressing the problem of affordability, just unlocking more land previously ring-fenced off.

    Perhaps having Local Government to commit to a City West or similar funding levy is the only way forward – it works.