Councils lash ‘inadequate’ plan for short-term affordable housing

Councils have pounced on plans to boost the supply of affordable housing but want the Minns government to ensure cheaper homes are provided forever, rather than reverting to developers after 15 years.

Local Government NSW, which represents 128 councils, said any affordable housing delivered under the proposed reforms – which would allow the dwellings to return to market rates after 15 years – should remain available for those on low to moderate incomes on a long-term or permanent basis.

NSW must build 376,000 homes in the next five years, including 15,800 social and affordable dwellings.Credit: James Alcock

“Given the acute housing crisis and the bonuses and variations proposed to be granted to developers under these reforms, the social benefit provided from the proposed 15-year provision is inadequate,” the organisation said in a draft submission.

Tasked with fixing the state’s housing crisis, Premier Chris Minns in June revealed plans to hand property developers height and floor space bonuses for projects containing affordable housing.

Under the proposal, private developers would get a 30 per cent height and floor space bonus for large apartment projects that contained at least 15 per cent affordable housing for at least 15 years.

Affordable housing typically refers to rental properties that will cost less than 30 per cent of a household’s gross income, and is aimed at very low to moderate income earners.

The projects would also have a faster approval pathway by being designated as “state significant”.

Local Government NSW said in its draft submission, published this month, that it supported actions to improve social and affordable housing, and backed the intent of the reforms. However, it could not support a scheme that allowed “unsubstantiated bonus increases on a grand scale in exchange for temporary affordable housing that will revert to the market after just 15 years”.

“Any bonus scheme should be founded on the principle that the affordable housing it generates is provided in perpetuity – not a minimum of 15 years.”

One of the alternative approaches the government should consider is to provide affordable housing for 25 to 40 years or longer, to better reflect the life of the building, the submission said.

Local Government NSW recommended the government “present and provide economic viability modelling of all potential options”.

“The NSW government should revisit the policy to consider how it can best deliver longer-term outcomes where affordable housing is provided in perpetuity.”

Shelter NSW, a not-for-profit housing advocacy organisation, was also critical of the 15-year time frame. It said consideration should also be given to the displacement of affordable housing tenants once the dwelling was no longer affordable and had not been replaced elsewhere nearby.

“It does not seem reasonable that the planning benefit of additional [floor space ratio] and height is in perpetuity (or for the life of the building) when the public benefit of affordable housing exists only for a limited period of time. The public benefit should match the planning benefit.”

The government is still consulting on the proposal. Minns previously said the suggested reforms would generate more affordable dwellings and more homes overall.

Developers, however, have expressed concerns as few as one in six apartment projects would qualify for the bonuses under a draft version of the policy because local council regulations would be allowed to scuttle housing projects that didn’t comply.

In line with the National Housing Accord, NSW is tasked with building 376,000 homes in the next five years, including 15,800 social and affordable dwellings.

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