Radical shake up needed to encourage affordable housing

The Committee for Sydney has called for a radical shakeup of the way affordable housing is delivered in Sydney saying the problem was urgent with serious economic as well as social consequences. And it claims to have the development industry’s support.

Recommendations include “inclusionary zoning” which would specify mandated targets for affordable housing and new ways for state treasury to assess the sale of government land, so that this would be supported.

Community housing could also be empowered with controlling public housing since it was doing a much better job.

Dr Tim Williams, chief executive of the Committee for Sydney and lead author of the report, A city for all, five game-changers for affordable housing in Sydney, said London often mandated 40 per cent affordable housing in major residential developments, sometimes 50 per cent.

•   See also Dr Williams article published in The Fifth Estate’s Spinifex column on Thursday, Tim Williams on challenging Sydney to be great: eight debates we have to have

In the lead up to The Fifth Estate’s Surround Sound for Sustainable Precincts in Sydney on Wednesday night, and during the event, the issue of affordable housing was consistently raised by panellists.

Dr Williams, one of our Surround Sound panellists, told The Fifth Estate said he particularly wanted to focus on this issue. David Rolls Head of Cities and Urban Renewal for Mirvac and Paul Walker Head of Investment, Urban Regeneration of Lend Lease likewise.

The introduction to the paper is signed by Dominic Williams, general manage for PAYCE Consolidated and CfS chair Lucy Turnbull.

Mr Williams said Mayor of London Boris Johnson had tasked his transport agency, Transport for London, to form “a series of long-term joint ventures with developers to unlock social, affordable and private housing supply at up to 50 sites owned by Transport for London”.

In the Sydney Morning Herald on Thursday, an opinion piece from Dr Williams said what was happening in Sydney right now, was “housing pornography”.

“This is where your dinner party guests get really stimulated when discussing the explosion in house prices in the Emerald City and the wealth effect this represents for them,” he said. “Better still, this particular coitus doesn’t seem as likely to be interrupted as soon as the other kind.”

Access to housing wealth however, was unavailable to large sections of Sydney society, and while it was of not much concern to the wealthy it should absolutely concern political leaders.

In the paper Dr Williams highlighted recent research from the US (by Hsieh, C-T and Moretti, ) that showed that if “supply in the nation’s most productive cities reached the levels of the most ‘housing- friendly’ cities, national GDP would be raised by up to 10 per cent.”

That was an improvement that could also be mirrored in Australia, the report flagged. “Given Sydney’s centrality to Australian wealth-generation at the moment, this is a matter of national importance,” it said.

Rising house prices attracted and locked in investment into bricks and mortar rather than more productive activity, the report said.

For instance, tech-start-ups, “which are the life-blood of Sydney’s increasingly knowledge-based economy but which can all too easily be undermined by a lack of funding or unaffordable living costs.”

Sydney was the third most expensive city in the world in which to buy or rent, it said.

The five “game-changers” are:

1. Maximise the use of public land. Government holds significant land, whether it’s Transport for NSW holding land next to train stations, or the Ministry for Health with land next to hospitals. We recommend that the NSW Government audit its entire land-bank in Sydney to identify the potential sites for affordable housing initiatives.
2. Transfer public housing stock to the community housing sector. Community housing providers are offering better outcomes for vulnerable and marginalised people than the Government is. Transferring stock will allow them to expand their offering and use their stock to leverage more private investment and create more housing.
3. Government incentives to trigger private investment into affordable housing. Leveraging the Premier’s $1billon new social and affordable housing fund to support private investment.
4. 1 Invest significantly in the existing public housing stock. Ensuring properties are used to improve the lives of the people on the margins and make the next step on the housing ladder that much easier.
5. Create the conditions in which private sector developers can deliver a proportion of affordable homes in all developments. The private sector is supportive of “inclusionary zoning” under the right conditions. The key is for developers to know before they buy the land what the obligations will be so that these can be factored into the purchase price.