Why Sydney must build more apartments in the CBD

Sydney should squeeze more apartments into the CBD to meet the changing housing needs of the population, but the state’s planning minister believes demand for new, large homes on the city’s fringe will not disappear.

NSW Planning Minister Paul Scully said the need for more residential development in the city’s commercial core “doesn’t just extend to the CBD, but extends to that inner ring [of suburbs]”.

Planning and Public Spaces Minister Paul Scully speaks at the Sydney Summit at Darling Harbour on Tuesday.Credit: Flavio Brancaleone

Scully pointed to proposals to construct more apartments around inner west train stations, including Burwood and Croydon, in his remarks to the Sydney Summit, hosted by the Committee for Sydney think tank and supported by The Sydney Morning Herald, on Tuesday.

“We do have to drive that; there is a changing expectation in the way people want to live,” he said.

“We should be embracing that while respecting the fact that we’ve also got to have sufficient options in the CBD for hotels, for businesses, for office space and commercial space.”

Sydney’s inner city and south had 100,334 flats or apartments in 2021, compared to 160,187 in inner Melbourne, according to census data.

The Minns government has been forging ahead with policies aimed at increasing the density and diversity of housing in Sydney as it attempts to deliver 377,000 new homes in the next five years.

Premier Chris Minns has previously warned urban sprawl would stop Sydney from being a leading global city and insisted building up – not out – would be key to creating a vibrant metropolis.

Scully on Tuesday said the emphasis on increasing density in established suburbs would not spell the end of “black roof” developments, but the city needed different housing types.

“You won’t see the end of them because there’s still a number that are in the [planning] system, and people want that choice, and will make trade-offs within their own lives about transport and distances.

“When you go into the south-west of Sydney, around Campbelltown and Wollondilly, there are still opportunities for people there … they may not end up working in areas where they have to come into the city.”

Scully’s remarks follow the results of a survey which found support for higher-density housing in suburban areas is climbing among Sydneysiders, who are more likely to approve of ramped-up development in their own neighbourhoods than they were two years ago.

The Life in Sydney survey, conducted by Ipsos and the Committee for Sydney, shows 46 per cent of Sydney residents would back increased density in their suburb, compared to 39 per cent in 2023.

There was also a 10 per cent jump in support for intensifying residential development in Sydney’s CBD and in inner-city suburbs. However, 50 per cent of Sydneysiders thought apartments were inappropriate for families.

Scully said the shifting attitudes towards density, particularly within respondents’ own suburb, were encouraging.

University of NSW School of Built Environment head Philip Oldfield said adding apartments would bring more vibrancy and vitality to the CBD. On the flipside, once a building was on a strata scheme, that site was “locked into residential for a really long time”.

He said the provision of dwellings in commercial centres around the world varied, and the City of London, for example, had “very, very few” apartments.

“The Sydney CBD is still a centre of commerce and business. We could definitely build more residential, but it’s going to be really challenging to get that mix right,” Oldfield said.

“It’s a balancing act, and I think Sydney could look more closely at its balance.”

Oldfield said inner-city suburbs such as Darling Point, Potts Point, Glebe and Pyrmont were “ripe for residential” due to their proximity.

Lord Mayor Clover Moore said the City of Sydney had one of the highest residential densities in Australia, and was continuing to grow.

She said, as of last June, the council had met 71 per cent of its previous 20-year housing target within seven years and was ready to deliver the 18,900 new homes the NSW government had demanded in the next five years. She expected 80 per cent of the population to be living in apartments by 2036.

“Currently there are almost 17,500 dwellings in Central Sydney alone, and in the last five years, around 3200 dwellings have been built, with approximately 5000 in the pipeline,” she said.

“Importantly, residential uses are permitted in the city centre, and while we can zone for housing capacity, we cannot make the property industry build homes.”

Canterbury-Bankstown Council town planner Liam Apter told Tuesday’s summit families often missed out on opportunities to live in convenient, high-density areas.

Apter and his colleagues were one of the finalists in the summit’s Big Ideas competition, arguing the NSW government could change its apartment design guide and planning legislation to force developers to include a minimum three- or four-bedroom apartments in new blocks.

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