Landcom chief executive John Brogden can’t say much yet but the NSW government land agency is about to change its stripes.
Tasked with the tough job of tackling affordable housing in Sydney, one of the most expensive cities in the world to rent or buy a house or flat, the reinvented Landcom is looking closely into disruptive models such as the Nightingale Housing model and co-housing in order to find solutions.
Soon to emerge will be a trial of some of these models in four demonstration sites – three in metropolitan areas and one in a regional location.
In an interview with The Fifth Estate, Brogden said the role of the land agency was to “demonstrate typology of housing diversity and different financial models”.
The models will look at both buying and selling options because “there are two crises in affordability in Sydney – one is the inability to buy the other is the inability to affordably rent”.
“Our objective is to get an outcome where there is a lot of variety in the demonstration sites.”
The idea is to use the agency’s unique position and “patient capital” to experiment with affordable housing that the “private sector can’t afford to do”.
Landcom has been around for a long time
Brogden, recently confirmed permanent chief executive of the organisation, was previously chairman of Landcom and then of UrbanGrowth NSW when Landcom was merged into UrbanGrowth.
But the agency is much older, originally conceived about 40 years ago when its job was to deliver land to the private sector for housing development.
Its current goals are not “an entire departure from master planning greenfield land”, Brogden said, and these days it will look at more complex housing.
“I’ve just come from Oran Park, which is one of our developments that has just transformed this area. The game has changed massively.
“Greenfields have changed massively. The decision to build the airport [at Badgerys Creek] has completely recast greenfield in western Sydney along with the Greater Sydney Commission and the three cities [model put forward by GSC].
“We’re running down all our projects in greenfield but we still have objectives to assist in land supply and affordable housing.”
There are “lots of opportunities” to restock sites with other government departments’ surplus land, Brogden said.
“The ruler we will run over these will be commercial but it will also be community and affordable housing.
“So we’re in a restocking phase and looking to other government agencies and other players.”
What’s important, he said, is to get the infrastructure investment to make new areas work.
“Property NSW is a key partner for us.”
Taking real risks
The land agency, Brodgen said, was poised to “take real risks; to look at different models”.
“We’re almost taking a view of, ‘What’s the disrupter that will make Sydney more affordable?’
If land is so expensive maybe it’s time to look at different ways to live, he said.
There’s a big transition underway.
“Families haven’t looked at three bedrooms and one bathroom for a long time.”
Homebuyers now expect computer rooms, games room, three or four bathrooms and several bedrooms, he said.
Yet co-housing is on our doorstep.
When you drive from Oran Park, where Landcom has a project, to Bilgola, where he lives, Brogden noted, “you realise how big and how diverse and how different our needs are around housing”.
“And then you can imprint social issues on these too. We’re facing a tsunami of women in low income
Former premier Mike Baird formed the view that the industry needed help with highly complex, very difficult urban renewal projects, Brogden said of the new look Landcom.
“Subsequent to that, cabinet determined an additional mandate for Landcom was to become an affordable housing delivery agency, so that’s our ‘noble cause’ if you like.”
So the grand cause of affordable housing in Sydney is important, “no argument from anyone that there is a housing crisis in Sydney”.
“And very clearly the government has put in place bigger stamp duty concessions and clear policies to increase supply.
“I always viewed Landcom to have a very discrete role in this space. It’s not big enough to solve the crisis but it’s big enough to play a leadership role.
“One of the guiding lights in all this is the Greater Sydney Commission.”
In particular, he said, was the principle that 70 per cent of the housing should be no more than 30 minutes from the household’s place of work.
Fears of competition
Any fear from the private sector about competition from a government agency, as in years gone by, seems to have evaporated.
“We don’t plan to compete with the private sector,” Brogden assured. In fact industry members were “very excited” about the prospects underway, he said.
“They want to be innovative as well and it’s sometimes hard to risk capital so we are more able to do that.”
It’s not easy
The big question, though, is how the agency can demonstrate or deliver more affordable housing when the state government still expects it to produce a dividend.
An even bigger question is that as land has been shown to be the most expensive component of housing cost in places like Sydney, why government-owned land can’t be provided to affordable housing developers as a contribution to solving the problem. Instead most government agencies with surplus land want commercial rates of return.
Brogden admits it won’t be easy.
The long-standing policy on providing dividends to the state government remains. How much or the level of this is unclear – not that it’s a secret, Brogden said, it’s just something that needs clarifying. Certainly the days of a dividend holiday when Landcom was merged with the new entity UrbanGrowth NSW are over.
“We all know that the greatest problem is the land cost and that’s the big open question.”
The starting point, he said, was “to seek a commercial return”.
Yes, it’s a big challenge, but also very exciting especially when you see the value of the potential outcome.
“It’s really galvanised the staff; it’s a great morale booster to get motivated on that agenda.”
- See Landcom’s earlier demonstration housing – the Ecoliving village at The Ponds in north-western Sydney in its last iteration (See our ). The project of three houses showed developers that eco-houses could be built without great difficulty in sourcing materials and know-how, and without looking like “alternative” housing.
- See article about Landcom’s announcement on the Harts Landing affordable housing project at its Thornton development at Penrith, west of Sydney, a collaboration between Evolve Housing and Payce for 268 apartments with half, 134 apartments, earmarked as affordable, including 10 for Aboriginal housing and some to cater for people with disabilities.