Councils providing affordable housing
candidate for Djarrawunang (Ashfield) Ward in the Inner West Council
Sydney is the third worst city in the world for housing affordability. In Australia, one in six young people aged 15–19 have experienced homelessness, 25 per cent of whom are based in NSW. For many, the amount needed for a home loan deposit seems insurmountable, with the inability to become a homeowner tied to intergenerational inequality. We have a growing gap between property owners and lifelong renters. In 2016, the percentage of renters in the Inner West had climbed above 40 percent compared to 32.6 per cent in greater Sydney. It’s even more stark in my area of Ashfield.
I lived in affordable government-owned housing for a few years – it changed my life. It lifted me up, allowed me to study at university, find secure employment, and pursue my passions. If it wasn’t for affordable housing, I would not be running for Council today.
ou may have heard, generally from a relatively affluent property owner, that ‘Councils can’t do anything for housing affordability’, ‘only state and federal governments can take action, or ‘this isn’t a key issue for our area’ – these assertions are far from reality, councils can and must take action on affordable housing.
Access to financial resources vary significantly between local government areas – so does a council’s ability to leverage funding. The Inner West Council has land, underutilised borrowing power, and was recently given $70 million due to the compulsory acquisition of council-owned land in Tempe.
Council’s affordable housing fund
In 2019, with sustained pressure from Greens councillors, the Inner West Council established an affordable housing trust fund to hold revenue from its small affordable housing stock and relevant Voluntary Planning Agreements, so that they could be reinvested into maintenance of units and development of new affordable housing projects. This fund could be significantly bolstered by levying developers for an affordable housing contribution.
A developer levy
The Affordable Housing Contribution Scheme and State Environmental Planning Policy 70 (SEPP70) allows councils to levy developers and make them pay for affordable housing by contributing a share of their windfall profits when an area is rezoned for higher density. Once councils develop an Affordable Housing Contribution Scheme, they must embed it in their local environmental plans (LEP) and it becomes part of the local planning laws. The scheme is not currently used by the Inner West Council.
This scheme has been available in selected parts of the City of Sydney since 2002, and recently became available across NSW. In Green Square, the City of Sydney gives residential developers the choice of 3 per cent of the total residential floor area being provided as affordable housing or $228.58 per square metre (indexed annually) of the total residential floor area. Monies are collected in a trust fund and passed onto City West Housing, which is responsible for development and management of affordable housing in the area.
Using this scheme and others driven by former Greens councillors on the City of Sydney Council, the City reports the delivery of 835 new affordable housing dwellings, with hundreds more in the pipeline. Imagine if the Inner West had had a similar scheme in place prior to large developments along the Summer Hill/Lewisham/Dulwich Hill light rail corridor.
While intended to provide rental units for very low to moderate-income households, the City of Sydney’s scheme that delivers below market rental housing is still too expensive for people on low incomes. Further, the City does not retain ownership of many of the affordable housing units and, from some perspectives, it could be viewed as a developer-led affordable housing program. We want to take a different approach to SEPP70 and an associated developer levy.
A Greens-led council would do more
We believe that not-for-profit housing should be owned by council. This means the public can hold their council to account on quality, management, and growth of council’s housing stock. A Greens-led Inner West Council will build hundreds of councilowned affordable housing units.
Inner West Council Greens also prefer using the SEPP70 as a levy rather than inclusionary zoning (floor space contribution) as it would allow council to retain control over a development’s architectural, sustainability and management standards – we don’t want to see developers just reserve their cheapest and most poorly-built units for their contribution.