Proposed changes to the City of Sydney's affordable housing scheme are set to further boost the number of affordable dwellings for low-income households.
Lord Mayor of Sydney, Clover Moore AO said that while boosting the supply of market housing was a focus for all levels of government, it was important for state and federal counterparts to recognise that simply building more market houses would not solve the affordability crisis.
"We are in the middle of a housing affordability crisis, and more housing stock does not automatically mean more affordable housing stock," the Lord Mayor said.
"Nowhere is this problem more acute than in Sydney, which remains Australia's least affordable city.
"While housing is the responsibility of the state government, we pull every lever we can at the local level to try and improve the situation in our city.
"The high cost of housing poses a serious economic and social risk, with low-income earners, often essential workers who help to keep our city running, unable to remain living here."
The move follows a comprehensive review by an expert land economist of the current scheme, which focuses on the two different ways contributions are calculated.
The first is a 'rezoning affordable housing contribution', which applies when the planning controls for a site are changed to enable more height and density. This is a percentage contribution of newly created residential floor space that results from the site being rezoned.
The current contribution amount varies from 12% to 21% depending on the location of the development. It is proposed to become a consistent 20% of new floor space. A new 2% rate for rezoned non-residential space in the city centre is also recommended to be introduced.
The second applies to development approvals and is a 'local government area affordable housing contribution'. This 3% of the floor space in residential development and 1% of the floor space in non-residential development is proposed to remain unchanged.
However, the dollar conversion rate of contributions per square metre is proposed to be increased in different parts of the City to better reflect the development potential and true cost of building housing in different areas.
Around 3,388 affordable homes have already been built or are in the planning stages, and another 1,950 affordable homes are set to be delivered as a result of the City of Sydney's current affordable housing scheme.
"Through levies, subsidised land sales, cash grants and Voluntary Planning Agreements, we have been a pioneer in the delivery of Affordable Housing and have done more than any other Council in NSW in this space," the Lord Mayor said.
"In the past month alone, the Central Sydney Planning Committee has approved two new projects that will deliver an additional 366 affordable housing units in Green Square. Both are the result of our selling discounted land to a Community Housing Provider and planning controls to ensure Affordable Housing as the only residential use.
"This shows our current policies are working, and we're confident taking them further will yield even greater results."
The City of Sydney estimates a further 320 affordable homes could be delivered from the changes to the dollar rate alone, and more homes possible through changes to the rezoning contribution.
The proposed changes include:
- Simplifying the rezoning contribution to a uniform 20% of newly created floor space across the local area for sites that have been rezoned.
- Introducing a 2% contribution for newly created floor space in the city centre on non-residential sites that have been rezoned.
- Gradually increasing the monetary contribution dollar rate over time to reflect the true cost of building affordable housing across the city.
- Enabling the City of Sydney to decide if a large rezoning project should deliver built affordable dwellings or make an in lieu monetary contribution.
The Lord Mayor said while the changes wouldn't solve the housing crisis, they are an important step in the right direction.
The Lord Mayor also brought a motion calling on the NSW Government to implement the City's definition of Affordable Housing – housing that is affordable in perpetuity, managed by a registered not-for-profit Community Housing Provider and rent-capped at 30 per cent of gross household income – and that the State Government should have its own Affordable Housing targets across Metropolitan Sydney or state-wide, not just market housing targets.
"Every level of government needs to work together to fix this problem so that people can live and work close to their community and the communities they serve," the Lord Mayor said.
John Engeler, CEO of Shelter NSW, has welcomed the move.
"It is incredibly difficult to generate more affordable and social housing simply by making changes to local planning rules," Mr Engeler said.
"There are fewer than 5,000 properties in NSW currently that have been generated this way for 'capital A' Affordable rental housing for low and moderately paid essential workers.
"The current planning reform proposed by the City of Sydney will make a significant increase on that number indeed over time it will likely double.
"A great day, indeed, an exceptional one for the City of Sydney in terms of leadership, innovation and delivering on housing equity."
Once endorsed by Council, the proposal will go to the NSW Government for approval before being placed on public exhibition for community feedback.
