Seven key policy agenda items emerged from The Fifth Estate’s Surround Sound on Housing: affordable/sustainable/innovative that can start to change the game for housing. They’ve been distilled from the event with contributions from our panelists, guests and readers and have been shaped to make a quick summary of thinking for the benefit of governments, government agencies, developers and community groups and individuals interested to help solve this growing critical issue of concern for our future.

1. The problem needs systems thinking

Tackling affordable housing (below-market rental housing), and housing affordability requires systems thinking. One system or one level of government is not enough. Both supply and demand levers need to be pulled. For instance, we need federal intervention into tax concessions such as negative gearing. We also need state planning reforms, through policies such as inclusionary zoning for mandatory affordable housing provision, such as targets put forward by the Greater Sydney Commission.

“The notion that there’s going to be a simple, single silver bullet that will solve this problem is one we should leave behind,” UrbanGrowth NSW’s Steve Driscoll said.

2. We need affordable housing targets, which might be flexible and require incentives

Mandatory affordable housing contribution is accepted by all. Its level and incentives required remain contentious.

The level flagged by the GSC of 5-10 per cent might be too small for the problem. The NSW Federation of Housing Associations’ Wendy Hayhurst said on government land it could be 30 per cent.

Developers are already being hit by “value capture” charges for other infrastructure, so they need incentives such as floor space bonuses to protect viability. Five per cent affordable housing would need a 10 per cent floor space bonus.

3. Transparency is mandatory

A transparent mechanism is needed to work out value capture on a rezoned site, and thus the appropriate prices landowners could be paid.

Landowners also need incentives to sell. Some were currently not accepting lower payments for their land, as they knew what the next-door neighbour had been paid and wouldn’t accept less, Frasers Property’s Nigel Edgar said.

“We need transparency so developers know exactly what they can afford to pay.”

Parramatta Council’s Sue Weatherley summed it up with an example – the Northwest Rail Link. “A significant piece of infrastructure where a lot of individual landowners who bought their land for $400,000 in 1996 were able to sell it for $12 million. That $12 million was funded by the taxpayers of NSW. Simple as that.”

Viability tests needed to be made public, John Nicolades of Bridge Housing and the University of Sydney’s Peter Phibbs said.

“Here’s a chance to get out of the nonsense, the name-calling – the world’s going to end – and have a sensible conversation with the community, open up your books, and show … if the community says, ‘Okay, you guys are getting whacked. We’re not getting any supply,’ they’ll be okay [with lower affordable housing contributions],” Phibbs said.

4. Make affordable housing “economic infrastructure”

Well-placed social and affordable housing can have big economic returns, in addition to social impact, with reports that benefits can be 7:1 on a benefit-cost ratio (SGS Economics and Planning).

Governments could invest in affordable housing and stimulate growth in the market downturns. Affordable housing needs to be “de-linked” from developers, said Robert Pradolin (affordable housing advocate and former Frasers Property executive)

The cost-benefit ratios can easily surpass those of roads, for instance.

5. Bring super funds on board with the right incentives

Repackaging affordable housing as economic infrastructure could help to attract the super funds, as the expectation of receiving returns similar to other property classes could be removed.

Super funds could invest in developments that were a mixture of affordable and market housing, ISPT’s David McFadyen said.

Create tax credits, such as the Low-Income Housing Tax Credit that exists in the US, which provides an equal reduction in income tax for every dollar invested in affordable housing, said PPB Advisory’s Garry McLean.

6. Enable more flexible frameworks for people creating alternative community housing and enable more communication between sectors

From the Nightingale Model and Smart Urban Villages, there is a raft of creative solutions in development.

The affordability crisis has merged with the emerging sharing economy and generated new models where “young, smart, intelligent people are creating their own little urban colonies, UTS and Urban Apostles’ Jason Twill said.

This deliberate housing needs assistance to enable the sharing of amenities such as parking and laundries.

The AGEncy project is creating solutions for older people who want alternative housing for their retirement.

7. Support the development of innovation and positive disruption

From building materials to construction methods, infrastructure delivery and new governance models, innovation and disruption needs to be fostered and steered in positive directions. In manufacturing and construction there is the potential for new skills and jobs, and in communities the potential to develop new governance models that go hand in hand with new models of community housing.

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  1. You forgot to mention to Building Costs in Australia. Nobody talks about this except experts or people who build overseas.

    # 8 . Import skilled labor/ incentivize apprentiships. Australia has the 2nd highest paid sparkies and highest paid Plumbers. Our chippies are in the top 5 in the World.

    I can build a block of units in Europe for what it costs to build a basic 3 bedder here.