Tuesday, May 30, 2017

NSW Opposition's affordability pledge

NSW Labor announced a housing affordability package over the weekend. It's worth a look.

As reported in the SMH, the Oz, and ABC Online, the headline is that under a NSW Labor Government 25% of government owned land that is earmarked for residential development would be set aside for Affordable Housing. Additionally, 15% of new dwellings or floor space on "privately developed" land would be designated as Affordable Housing, "available for rental or sale to low- to moderate-income households."

As reported in the SMH and ABC Online, with comments attributed to NSW Planning Minister Anthony Roberts, the plan lacks detail. It is unclear just what is meant by "Affordable Housing", although the term does have a meaning in modern housing policy parlance. It generally refers to rental housing that is let at around 80% of the going market rate, and it is usually managed by a registered Community Housing landlord. It is not clear how Affordable Housing "for sale" would be determined, though we note the policy states Labor would "work closely with industry experts, including Community Housing Providers, to formulate the rules around this policy". That's good, but they could include tenants and prospective home buyers in that list of experts as well.

For his part, Minister Roberts says the plan is "totally flawed", and that the NSW Government has already created affordable housing. In comments to the ABC, he is reported to have said:
We are doing it incredibly successfully without destroying the value of peoples' properties, without actually going into the marketplace and providing a level of Government intervention that is no good for anyone.
Presumably he was referring to the Social and Affordable Housing Fund, under which the construction of 2,200 new properties was announced in early March. He might also be referring to the Communities Plus initiative, under which land owned by the Land and Housing Corporation - that's the public housing landlord in New South Wales - is to be "recycled". For the uninitiated, that means knocking down established communities in places like Redfern, Waterloo, Macquarie Park, Telopea and Riverwood, and replacing them with new, higher density neighbourhoods that will include both Social and Affordable Housing. But they'll include more dwellings for sale into the private market than anything else, because that's how this "recycling" model gets funded.

Ignoring the significant upheaval this causes tenants and residents within those communities, Minister Roberts might be right - that is one way to deliver Affordable Housing in parts of Sydney without destroying the city's property values. In fact, it seems designed to encourage further growth in the value of property, while carving out small tracts of affordability for a lucky few. To be clear, that is affordability relative to our extremely unaffordable housing market, as opposed to affordability by any real objective measure. That's good for property owners, but on its own it's not so good for tenants and would be home-buyers struggling to find something they can afford in the places they'd like to live. And it's really not good for the public housing tenants who value their properties in an entirely different way - by making homes and neighourhoods in the communities that are about to be destroyed.

In any event, the scale of Sydney's affordable housing crisis is such that a few thousand extra dwellings here and there won't really put much of a dent in it, even if we do rent some of them out a little more cheaply than the rest. What is needed is a clear and meaningful target for affordable housing to be included in new residential developments right across the city, if not across the state. We need a sustained effort to get more and more of it built with every new development that gets off the ground. On this note we'll give the NSW Labor policy a big thumbs up.

We'll be surprised and disappointed if the NSW Government comes out with a substantially different policy when it announces its own housing affordability package, as it has promised to do in the coming State Budget. Given the recent Federal Budget's focus on delivering Affordable Housing through the proposed National Housing Finance and Investment Scheme, and the reference to aggregate supply targets (including targets for social and affordable housing), residential land planning and zoning reforms, and inclusionary zoning arrangements in the proposed National Housing and Homelessness Agreement, the only real difference we're hoping to see in the Government's plan is a little more attention to detail.

Time will tell.

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