Forty-four sites for new homes as state intervenes in housing

The NSW government wants construction workers finishing major public infrastructure projects to switch to building homes to help deliver 8400 new public housing dwellings and another 21,000 homes on government land.

Tuesday’s budget allocated a record $5.1 billion over the next four years to reverse the state’s decline in public housing stock, which has caused the waiting list grow to more than 58,000 - with nearly 9000 needing shelter urgently.

The government believes it can solve a labour shortage by redeploying workers currently building Sydney Metro.Credit: Bloomberg

A long-awaited audit of surplus government land has identified 44 sites in Sydney and the regions suitable for redevelopment into housing. The government is pledging 30,000 new homes - a mix of public, subsidised and private dwellings - at those locations and other, previously rezoned sites.

It refused to identify the 44 new sites on Tuesday, citing market sensitivity, but said they would be released shortly. While small sites may consist solely of social housing, most will be mixed-tenure. The government made clear it would not create standalone public housing estates or towers.

Treasurer Daniel Mookhey said it was “the biggest single investment in social housing any NSW government has made in the federation’s history”, and would undo the previous government’s approach of selling public housing stock to fund repairs.

However, the state faces a significant challenge in finding construction workers. It argues that as major public works projects such as Metro City and Southwest wind down, labourers can go into home building instead.

“At this point of the economic cycle, by making sure we’re very disciplined about the public infrastructure we’re building, we’re making sure that some of that labour can switch over to residential construction,” Mookhey said.

But veteran residential builder Gary Bradshaw said that was easier said than done. “It’s horses for courses,” the 60-year-old foreman said from a Mosman construction site on Tuesday. “I couldn’t walk straight onto a commercial [building] site and know all the ins and outs. It’s going to be a challenge.”

The Master Builders Association applauded $16.3 million in previously announced funding for fee-free training and apprenticeships, but warned it was vital to expedite planning and development approvals and address productivity.

More broadly, industry groups and housing advocates welcomed the budget’s sizeable expenditure on public housing, which was just shy of the $5.3 billion Victoria allocated in 2020 for 12,000 new public homes.

Committee for Sydney think tank chief executive Eamon Waterford said the funding was a major step forward, though “more is needed” as Sydney trailed nearly every city on earth for social and affordable housing supply.

The $5.1 billion for public housing comprises $4.4 billion in new money – budgeted at about $1.1 billion a year over the four-year forward estimates – with the remainder already on the books of Homes NSW.

It accounts for the bulk of a $6.6 billion package that also allocates $810 million for maintenance and repair of 33,500 existing public homes, $200 million for First Nations housing and more than $500 million for homelessness services.

Of the 8400 homes to be constructed, 6200 will be brand-new builds, and half of those will be reserved for survivors of domestic violence. The remaining 2200 will replace existing stock in disrepair.

Homes NSW will have the first right to develop public housing on the 44 sites released by the government, followed by state-owned developer Landcom and then private developers. The government expects to unlock 21,000 market and affordable dwellings from those sites and a pipeline of others which are already rezoned.

Affordable rental housing is typically offered below the market rate, or based on percentage of income, for at least 15 years, managed by community housing providers.

The government has also announced Landcom will deliver 400 new build-to-rent apartments in metropolitan Sydney to be leased to key workers, such as nurses, teachers and police officers, at subsidised rates. The cost of that program is $450 million.

In a move that reflects the notorious complexity of the NSW planning system, the budget also allocated $254 million for resources in the Department of Planning to assess state-significant development applications, rezoning reviews and other matters.

The government says it will publish a “league table” comparing how long councils take to assess various types of development applications, and a similar table for the Planning Department.

The budget also commits another $5 million to continue its audit of surplus government land.

Updated figures in the budget papers confirmed the extent of the state’s housing affordability crisis. In November 2023, the cost of a new 30-year mortgage in NSW was 31.3 per cent of the average disposable income, the highest share since 2003. The annual growth in advertised rents, while tapering off recently, peaked at 21.4 per cent in the year to July 2023.

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