Government faces anger over affordable housing target shortfalls

Affordable housing in new residential developments around Sydney train stations could fall far short of the Minns government’s promised 15 per cent target, with some areas likely to include fewer than one in 30 homes built for lower-income earners.

The NSW transport-oriented development (TOD) program aims to build tens of thousands of new homes around rail and metro stations.

The NSW government faces criticism over the amount of affordable homes planned for station precincts. Credit: Kate Geraghty

Planning Department data shows as little as 3 per cent of new dwellings in Bankstown, in the city’s south-west, and Kellyville and Bella Vista, in the north-west, must be affordable housing.

Homebush and Hornsby (both 5 per cent), Crows Nest (10 per cent) and Macquarie Park (10 per cent) will also have significantly less affordable housing under the lower end of the range proposed by the government.

The minimum targets have angered community, housing and planning groups who hoped the TOD would bring an influx of affordable housing to well-connected areas for families and workers. However, developers say the targets, which are proposed to apply in perpetuity, are too high and leave many sites unfeasible for development.

Shelter NSW chief executive John Engeler said the state government’s own data showed between 2835 and 6188 affordable rental dwellings will be built out of a total of 62,155, short of the 9323 the organisation and the community might have expected.

“A public and high-profile announcement of up to 15 per cent affordable housing rates was part of the density deal sold to the broader community,” he said.

“The low rates being considered undermine the general promise and delivery of the TOD program.”

‘Confused signals’

Engeler said the different affordable housing contributions proposed for each precinct were poor practice and “already sending confused signals to the market”.

Liberal planning spokesman Scott Farlow also criticised the amount of affordable homes planned for each station precinct.

“When it comes to affordable rental housing, the Minns government’s talk doesn’t match the reality,” he said.

Farlow said there was a lack of clarity about the variation in affordable housing required for each site.

“Three per cent in Bankstown compared to 10 per cent in Macquarie Park has people scratching their heads,” he said.

Planning Minister Paul Scully said affordable housing requirements at TOD locations were only one part of the government’s measures to boost the supply of social and affordable housing.

“The former government had no requirement to deliver affordable housing at these locations,” he said.

Developers lobby group Urban Taskforce’s chief executive, Tom Forrest, said the first tranche of TOD precincts was supposed to signal that the government’s top priority is growing housing supply.

“Unfortunately, the affordable housing ‘contribution’, which is proposed to apply in perpetuity, renders a large proportion of these sites unfeasible for development,” he said.

Forrest wants the affordable housing requirement lowered to between zero – on sites with no uplift in height or density – and 3 per cent.

“In almost all cases, such an impose renders development unfeasible,” he said. “You can’t make a profit, so the private sector and the banks won’t invest the funding needed for construction.”

‘Bold target’

However, Committee for Sydney chief executive Eamon Waterford said the government should pick a “single, bold target and stick to it, especially where there’s significant uplift”.

“This needs to be set now, so it can be priced into the cost of land and doesn’t eat into developer feasibility,” he said.

Waterford said global evidence suggested that the proportion of affordable housing will end up at the bottom of the range, which could be as low as 3 per cent of new dwellings.

“Landowners will still see big value increases, but a clear target ensures the cost of affordable housing is absorbed into their windfall gains, not passed on to developers or future residents,” he said.

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