Possible housing deficit of 200,000 homes by 2024
The production rate of new housing will have to be ramped up to meet en expected housing deficit of a possible 200,000 homes by 2024.
In the submission to the House of Representatives Standing Committee on Economics, AECOM technical director Joe Langley noted the housing crisis in Sydney is the result of a group of factors that constrain land supply and housing production, adding part of the problem in Australia has to do with our inherent geographical and demographic conditions which restrict housing supply in certain areas and open up differences in regional housing affordability in others.
"Present governance and funding arrangements contribute to Sydney’s housing constraints by limiting the value that can be created by and captured from public transport projects."
Joe Langley points out how two international transport projects are delivered and funded that, in his opinion, addresses the housing constraints. "Improved governance arrangements within transport delivery authorities and the introduction value capture funding methods that tap into the value created by well-integrated transport and land use planning."
"The Denver Union Station Project Authority (DUSPA) is an excellent example of a governance structure for a major transport project that embraces the concept of wider public and private sector engagement in decision-making. This US$550 million transit-oriented development is the centrepiece of Denver’s FasTRAKS program, a $5 billion transformation of Denver’s transport network.
"Private sector partners, the Union Station Neighbourhood Company (USNC), were selected through a public tendering process that brought private commercial and residential development expertise and equity to the DUSPA board and the overall project.
"As a result, major transport projects such as DUSPA and FasTRAKS have enjoyed a high degree of public and political support, thereby avoiding the cancellation and financial failure of major transport projects as witnessed in the recent past in Queensland, Victoria and NSW."
Joe Langley brought up some important points to address housing supply shortages. These are recommendations according to recent research commissioned to the Property Council of Australia.
"More widespread release of urban land for medium density development (up to 6 stories), greater production of small lot housing opportunities in green field locations, a broad scale review of employment trends and new employment needs in conjunction with housing needs, and a new focus on the mechanisms of lot assembly to assist private developers in putting together development packages in preparation for future housing supply.
"Part of the problem in Australia has to do with our inherent geographical and demographic conditions which restrict housing supply in certain areas and open up differences in regional housing affordability in others.
"For example, Sydney is constrained by mountains to the west, the ocean to the east and national parks to the north and south, thereby pushing fringe development in a relatively narrow band to the northwest and southwest.
"While the Property Council’s report paints a clear picture of the reasons behind the housing supply problem, it also points out that over half of the metropolitan Sydney councils surveyed either underperformed or grossly underperformed in meeting housing production targets set by the NSW Department of Planning and Environment between 2004 and 2014.
"Clearly, increasing the supply of housing is a key part of the solution, but Sydney’s ability to generate a “sustained increase” in the rate of dwelling approvals over the next decade can’t be relied upon given past performance. NSW will need to do things differently, and for a long time, if Sydney is to fix its housing affordability problem."
Moody’s Australian Housing Affordability Measure shows that Australian households with two income earners need to spend, on average, 27% of household income to make mortgage loan repayments.