Hundreds of apartments get green light but without affordable housing

Meriton has been given the green light to build more than 800 homes on an inner-city development site despite dumping plans to build affordable housing.

A majority of City of Sydney councillors, led by Sydney Lord Mayor Clover Moore, last week voted to green light a proposal for the old Suttons car dealership site in Zetland.

Meriton wants to build more than 800 homes as well as a new supermarket, childcare centre and public park on the site, but has backed away from an offer made to the council last year to build affordable homes there.

It has instead opted to pay a 3 per cent affordable housing levy – about $29 million in this instance – to the council under the affordable housing contribution scheme.

Property developer Meriton wants to build hundreds of apartments on the old Suttons car dealership site in Zetland.Credit: Nikki Short

Greens councillor Sylvie Ellsmore, one of three councillors who voted against the project, called Meriton’s decision “pathetic and shameful but exactly what the system allows, because all the rules are stacked in favour of developers”.

Ellsmore has called for a vote at the council’s meeting on Monday for powers to force developers to build affordable housing on development sites.

“We don’t need more mega new developments which no one can afford to live in,” she said. “We want to ensure some social mix and not more of these ghettos for the rich or investors where half the lights are off because they are all being Airbnb’s.”

Moore said the developer was not legally obliged to build affordable housing on the site and while it was “greatly disappointing”, it was also disappointing to see councillors oppose development that will help City of Sydney meet the NSW government’s housing targets.

“We, as a responsible council, can’t reject good, well-located housing because a developer is not exceeding its statutory obligations,” she said.

Tom Forrest, the head of developers’ lobby group Urban Taskforce, said the council had always allowed developers to choose between making a financial contribution to affordable housing or an in-kind contribution.

An artist’s impression of Meriton’s planning proposal for the Suttons car dealership site in Zetland.Credit: Artist impression

“Financial contributions have played a big part in enabling large numbers of affordable housing to be delivered in the growth areas of the City of Sydney and particularly around Redfern,” he said.

Moore said the project was still worth supporting, pointing to its green credentials and boost to housing supply as well as the $29 million payment for affordable housing.

But Ellsmore said the episode was a perfect illustration of what is wrong with the state’s planning system and the financial payment was a less effective way of providing affordable homes because the council has to find another site to build or buy the housing.

“In reality this means affordable housing is built by a community housing provider often years later and at a higher price, which means you get less affordable apartments built in the end,” she said.

Fellow councillor Yvonne Weldon said the council’s affordable housing contribution scheme was grossly inadequate and developers should be forced to build affordable housing.

“The way that Meriton has conducted themselves in this instance is a disgrace,” she said. “I will continue to oppose this development.”

Labor councillor Linda Scott said she wanted stronger planning rules to create more affordable housing through developer contributions and direct funding by the council.

“The Lord Mayor’s decision to approve Meriton’s development... calls into question her ability to understand the severity of our city’s housing crisis,” she said.