NSW housing crisis: thousands of Sydney homes in planning limbo

Sydney’s housing crisis is tearing families apart with young people forced to flee NSW because they cannot find a place to live.

More than 90,000 new homes are stuck in the bowels of the planning system, further worsening a housing crisis which is tearing Sydney families apart as young people are forced to flee NSW because they cannot find a place to live.

State government agencies are now being accused of making the housing crisis worse by dragging the chain and tying up developments in red tape.

The Daily Telegraph can reveal that a total of 91,183 dwellings are stuck in the planning system waiting for developers to deal with burdensome “requests for information” from state government agencies before approval can be granted.

Revelations of the number of homes stuck in the planning system will come as salt in the wound for families who face being separated by a housing crisis that is leading to an evacuation of 30-40 year olds from Sydney.

NSW Productivity Commissioner Peter Achterstraat warned that the lack of housing in Sydney is causing an exodus of older millennials, and could lead baby boomers only seeing their grandchildren once or twice a year.

Sydney could become a city with “no grandchildren” unless suburbs like these build up, the Productivity Commission has warned.

The productivity commission last month found that between 2016 and 2021, Sydney lost twice as many people aged 30 to 40 as it gained: while 35,000 came to Sydney, 70,000 left.

“If it continues, there’s going to be a real shortage of 30 to 40 year olds and hence (a shortage of) their children, or the grandchildren of the baby boomers,” Mr Achterstraat told the Telegraph on Wednesday.

Grandparents will only be able to see their grandkids “when they come to visit a couple of times a year, rather than being able to see them on a more regular basis,” he said.

Productivity Commissioner Peter Achterstraat has warned 30-40 year olds are fleeing Sydney for cheaper cities. Picture: Toby Zerna

According to population figures released on Tuesday, 38,425 people left Sydney in the 2022-23 financial year. There was a “natural increase” of about 28,500, but international migration added a whopping 156,616 people to Sydney’s population.

Opposition from councils to increased density has only compounded the housing crisis, with new figures from the Minns government highlighting how much more expensive it is to build out instead of up.

The Productivity Commission has previously found that it costs taxpayers, on average, $39,000 less in infrastructure costs to build a new home in an established residential area compared to “greenfield” sites without existing roads, water, sewerage and electricity.

Planning Minister Paul Scully has seized on the warning to argue for his housing reforms to increase density. Picture: NCA NewsWire

According to NSW Treasury figures provided to the Telegraph, taxpayers will save some $10 billion if 70 per cent of the homes meant to be delivered under the National Housing Accord are built in established areas.

Building up instead of out could also save homeowners and renters money in their hip pocket; a $1 billion spent on new water infrastructure would add some $22 to an average water bill, according to NSW Government calculations.

Mr Achterstraat said supply needs to be boosted everywhere to fix Sydney’s “housing drought”.

The reforms have garnered significant opposition from including from those who are opposed to higher density. Picture: NCA NewsWire

“All areas have got to increase their supply, whether it’s the greenfield or the infill or the brownfield,” he said.

Planning Minister Paul Scully said that planning reforms being pushed by his department will help build more homes for “all age groups at different stages of their life”.

“We’ve got to make sure that there’s opportunities for people who are looking to downsize as well as opportunities for housing for people who are looking to grow a family,” he said.

Premier Chris Minns has made increasing housing supply his number one priority – but has 90,000 homes stuck in the planning system. Picture: NCA NewsWire

Sweeping planning reforms to increase density around existing railway stations and town centres are forecast to add almost 88,000 homes to ease the housing burden.

However, more than 90,000 homes remain stuck in limbo in the turgid planning system.

Urban Taskforce CEO Tom Forrest blamed the delay for approving existing rezoning applications on state government agencies like Transport for NSW, which he said was burdening proponents with mountains of red tape.

“It’s those agencies that are still dragging the chain and letting the team down,” Mr Forrest said.

The Telegraph revealed on Wednesday that a development of up to 11,000 homes was at risk of falling over after developers Coronation were told to complete new flood studies which could take up to 18 months.

Mr Scully called for other government agencies to pull their weight in letting new homes be built.

“So every level of government and every government agency needs to be doing its part and looking at how they can improve their systems to make sure that they’re making decisions in a timely manner that allows housing to be delivered,” he said.

‘I WOULD DEFINITELY GO INTERSTATE’

Cheaper rents interstate are threatening to lure young Sydneysiders like Holly Murphy and Tawny Myers away from their families.

Ms Murphy, 21, lives with her parents in Bondi. However, she said she would consider moving to Western Australia due to Sydney rent hikes. 

Tawny Myers (21) and Holly Murphy (21). They would happily leave Sydney to rent in another city if the rental crisis continues. Picture: Richard Dobson

Cheaper rents interstate are threatening to lure young Sydneysiders like Holly Murphy and Tawny Myers away from their families.

Ms Murphy, 21, lives with her parents in Bondi. However, she said she would consider moving to Western Australia due to Sydney rent hikes. 

“Sydney’s prices are insane, definitely don’t want to be wasting my money on rent when I can live somewhere like WA and have so much more for the same price”, she said. 

Ms Murphy said moving interstate would be worth leaving her family and friends for. 

“It’s sad that you would be away from your family and it would be hard but in the future if you can’t own a home in Sydney it’s just better to own a home somewhere else. You can always fly back and visit family, I would do it”. 

Ms Myers, a 21-year-old Rose Bay student, said she would “definitely” consider moving interstate when it comes to move out of home. 

“If I was thinking of moving out of home I would definitely go interstate, better lifestyle and it’s so much cheaper”. 

The two women are examples of the exodus of young people who are being forced to leave Sydney in search of cheaper living costs, called out by Productivity Commissioner Peter Achterstraat.

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