Developer loophole sees essential workers squeezed out of Sydney

Developers are renting out “affordable housing units” for high prices prompting councils and essential workers to call for a rethink of the rules.

It’s the little known trick which allows developers to supercharge the number of micro units on a new site.

But while developers are allowed to build extra units under the so-called “affordable rental housing” policy, nurses and planning experts say these properties are still way too expensive for the ordinary people.

Nurse Kim Morris is renting in Sydney’s south because she can’t afford a unit near her work in Sydney’s east. Picture: Sam Ruttyn

The Saturday Telegraph can reveal so-called affordable apartments are being rented out for more than $495 per week – well in excess of what essential workers can afford.

Coogee state Labor MP Dr Marjorie O’Neill says there is a serious need for affordable housing to ensure teachers, nurses, cooks, cleaners, police and porters are able to live close to where they work.

“This planning policy is just a Trojan horse for developers to build sub-par apartments, that they can pimp them out at well above market price for rent,” she said. Affordable is defined as 20 per cent below market rent, which Sydney University’s professor Peter Phibbs says “is hardly affordable for the average punter”.

A UNSW study done with 11 Sydney councils found nearly 300 new boarding houses were approved between 2009 and 2017.

Southern Sydney Regional Organisation of Councils president and Burwood Mayor John Faker said there needs to be a change “so that planning incentives targeted to assist with affordable housing supply actually makes housing affordable to low-income households”.

Coogee MP Marjorie O'Neill.

Burwood Mayor John Faker.

Fifth year single nurse Kim Morris is renting in south Sydney because she can’t afford to live in the eastern suburbs near work. Many of her colleagues travel from Sutherland, the Northern Beaches, Gosford and Kiama.

“We are often concerned about being stuck in traffic and driving home after a long night or falling asleep on the train and missing our stop,” she said.

Development company Wainidiva, of which celebrity artist Ken Done is a shareholder, is seeking to put up a boarding house in Edward St, Bondi.

“You end up with developments where there is no obligation for them to rent the properties out cheaply,” nearby resident Phil Leadly said of the matter, which is before the NSW Land and Environment Court.

Ken Done.

Professor Peter Phibb.

Planning and Public Spaces Minister Rob Stokes said “it’s important the planning system delivers not just a supply of new housing but a diversity of housing types and tenures”.

“Unlike the current situation, the new Housing State Environmental Planning Policy will include requirements for boarding houses to be affordable,” he said. 

“It will also stipulate new styles of housing such as co-housing and student housing in the right locations.

“The draft SEPP went through thorough consultation last year and the final version is expected to be released in coming months.”