AHURI’s affordable housing proposals will only push unit prices up: Chris Johnson

EXPERT OBSERVATION

The Australian Housing and Urban Research Institute (AHURI) report on affordable housing policies should support incentive approaches but must not increase apartment costs.

The AHURI report by a number of Australian academics is a useful exploration of trends and policies across the world but the Sydney market is different.

Many countries use taxation deductions and other incentives to achieve a supply of affordable homes.

Even the South Australian system referred to in the report is different to anything proposed in Sydney as it defines 15% of homes for sale at a reduced price.

This is much more feasible than giving 15% of all your homes to the local council.

Houses and apartments in Sydney are amongst the most expensive in the world when related to household income.

Much of this high price is driven by restrictions on zoning new land for residential homes according to the Reserve Bank report on ‘the Effect of Zoning on Housing Prices’.

The zoning effect increased Sydney per house price by a whopping $489,000 and in Melbourne by $324,000.

On top of all this there is a range of levies and taxes added to the cost of a dwelling by the NSW Government and the local council.

To add even more cost to new dwellings as proposed by AHURI will only drive overall housing costs upwards.

The AHURI preferred approach is to have inclusionary zoning only applied to apartments yet apartments have already become the affordable way to live for many Sydney households.

The average apartment in Sydney is around 40% cheaper than the average house so this dwelling type has become the affordable way to live for many households.

AHURI however proposes an inclusionary zoning system that can only lead to forcing apartment costs up.

We should be getting other building types like detached houses, commercial and retail developments to contribute to affordable housing rather than add an extra cost to the most affordable dwellings in the city.

The Urban Taskforce has developed an approach to providing up to 40,000 affordable homes across Sydney over a ten year period.

We propose using the Affordable Rental Housing SEPP that gives an uplift in floor space if 20% of the apartments are affordable rentals for 10 years.

The incentive needs to also be 20% and this will encourage most developers to provide a percentage of apartments that are lower in rent than the market.

Stronger leadership by government on affordable housing policies is needed in NSW.

Currently the Department of Planning and Environment controls some policies, the Greater Sydney Commission proposes targets only on uplift and if feasible yet many councils are pushing for inclusionary zoning percentages that would make new housing projects unviable.

The Urban Taskforce is keen to work with all agencies to get a Sydney approach to housing affordability that is sustainable in the long term.

CHRIS JOHNSON is the Urban Taskforce CEO.