Existing measures to address housing affordability challenges
Ensuring a steady supply of market housing in locations well supported by existing or planned services and amenity with an emphasis on public transport access is set out in Objective 10.
It is important that the supply of housing delivers the type of housing that communities and places need as they grow and change. Homes need to respond to people’s changing needs as they transition through different stages of life. A diversity of housing types, sizes and price points can help improve affordability. Increasing the supply of housing that is of universal design and adaptable to people’s changing needs as they age is also increasingly important across Greater Sydney.
Other measures aim to increase the supply of affordable rental housing, and maintain the existing supply of homes for households earning very low to moderate incomes. These include:
- State Environmental Planning Policy (Affordable Rental Housing) 2009 provides incentives for development projects to include a 10-year term for affordable rental housing dwellings for very low to moderate-income households. Application of this policy has generally resulted in the delivery of granny flats (secondary dwellings), student accommodation and new generation boarding houses.
- State Environmental Planning Policy No 70 – Affordable Housing (Revised Schemes) (SEPP 70) allows specified councils to prepare an affordable housing contribution scheme for certain precincts, areas or developments within their local government area. Willoughby, Leichhardt and the City of Sydney councils currently have affordable housing schemes in operation that require affordable housing provision for all residential developments within the scheme area.
- Randwick, Inner West, Northern Beaches, Ryde and Canada Bay councils have undertaken an analysis of the need for affordable housing within their local government areas to support an application for inclusion in SEPP 70 that is to be exhibited in 2018.
Social housing is a form of affordable housing that caters to households experiencing the highest housing stress and social disadvantage. Although social housing supply and renewal is being addressed through programs such as Communities Plus and the Social and Affordable Housing Fund, delivery needs to be accelerated to cope with the growing waiting list. At the same time, more affordable rental dwellings are needed as a stepping stone for people in social housing who are capable of entering the private rental market, thereby freeing up housing for those most in need.
Affordable rental housing for very low and low-income households
The Plan recommends Affordable Rental Housing Targets as a mechanism to deliver an additional supply of affordable housing for very low to low-income households in Greater Sydney. Affordable rental housing for people on very low to low incomes is priced so that housing needs can be met alongside other basic living costs such as food, clothing, transport medical care and education.
Affordable Rental Housing Targets would be applied in defined precincts prior to rezoning. This will not affect projects already underway.
So as not to inhibit housing supply outcomes, or affect existing home and property owners, the application of the target will be the subject of a viability test.
The key parameters for successful implementation of Affordable Rental Housing Targets have been identified through research, testing and wide engagement with stakeholders. These include:
- the uplift in land value created as a result of a rezoning decision, which should be measured using a consistent viability test and core assumptions
- the inclusion of other government development charges for essential local and state infrastructure so that communities do not forgo local amenity and services from Section 7.11 development contributions, Special Infrastructure Contributions and voluntary planning agreements
- the necessary allowance for an increase in land value for vendors so that land is willingly sold into development projects that create housing supply
- the necessary allowance for development companies to achieve a normal profit margin on the capital invested and risk taken on projects
- the requirement to have a separate approach for land release areas and urban infill areas given the differing circumstances in relation to development costs, development processes and land acquisition.
Within Greater Sydney, targets generally in the range of 5–10 per cent of new residential floor space are viable, including the parameters set out above, noting that these parameters will be tailored to each nominated area.