Minute by the Lord Mayor
To Council:
Last month, the NSW Government allocated new
five-year housing targets to 43 councils to meet its commitment of delivering 377,000
new homes under the National Housing Accord. The City’s new target is 18,900
new private homes to be completed by July 2029.
We know that Sydney is in the middle of a
housing affordability crisis, which is making owning or renting unaffordable
for many.
The City will, as it has always done, work to
meet our new housing targets. However, it must be acknowledged that councils
are facing significant challenges outside their control to not just plan for,
but also deliver their housing targets.
The City’s record
The City was tasked with delivering around
one-third of the entire housing target set by the former NSW Government for the
nine councils across eastern Sydney.
Within just seven years, we have met 71 per
cent of our previous 20-year target of 56,000 private (market, affordable and
social housing) and non-private dwellings (such as student housing and boarding
houses), with over 21,000 dwellings built and almost 19,000 more in the
pipeline.
Denser cities can be the healthiest,
greenest, and most stimulating places for people to live with the least
environmental impact.
It has been the City’s policy to increase
density in former industrial areas such as Green Square and Ashmore. These new
communities are successful because development has been managed carefully, with
increased height and density allocated to appropriate sites alongside
infrastructure delivery that supports growth.
We’re also increasing opportunities for more
housing following the Council-endorsed Pyrmont Planning Review and introducing
incentives to encourage more Build to Rent and Co-Living Housing in Central
Sydney alongside recently implemented changes to the Botany Road corridor.
Progressing a Local Housing Accord
The NSW Government expects that 13,900 of our
18,900 private dwellings target can be delivered through existing planning
controls in areas such as Green Square, Redfern-Waterloo and southern CBD. The
other 4,900 ‘projected’ dwellings are expected to be delivered under the NSW
Government’s proposed changes to create more low and mid-rise housing.
Those proposed low and mid-rise housing
changes will rezone residential areas within 800 metres from stations and
centres to allow for four to six storey buildings, which could reach up to nine
storeys if an affordable housing bonus is taken up.
In February 2024, I hosted a briefing for
local resident action groups so that City staff could explain what the proposed
low and mid-rise planning changes mean for our area and to listen to their
concerns.
Informed by that discussion, the City made a
submission to the Department of Planning, Infrastructure and Housing (‘the
Department’) about its Explanation of Intended Effect: Changes to create
low-and mid-rise housing.
Our key concerns relate to the blanket
application of the changes, incompatible height and floor space controls where
development cannot be refused, their application to centres which do not meet
National Housing Accord commitment for well-located homes, and that the changes
effectively override local heritage protections.
That same month, a Parliamentary Inquiry was
established into the development of the NSW Government’s Transport Orientated
Development Program, which also examined impacts of the low and mid-rise
housing changes. The City also made a submission to that Inquiry which again
opposes blanket changes without consideration of local conditions.
In March 2024, I met with the Minister for
Planning and Public Spaces to explain the City’s concerns with the proposed
planning changes, which he acknowledged and agreed to work with us.
At the meeting, the Minister suggested there
may be an opportunity for the City to enter into a Local Housing Accord instead
of applying the low and mid-rise housing changes. A Local Housing Accord would
identify places to be investigated to rezone for the 4,900 ‘projected’
dwellings that are part of our new housing target. This would enable us to
reduce impacts to our conservation areas in exchange for more development
(rezonings) in other areas.
The Minister should also allow the City to
count new ‘non-private’ as well as ‘private’ dwellings towards our target to
enable us to plan for more student housing, seniors housing, co-living and
boarding houses which all play an important role in accommodating our diverse
community.
Increasing supply alone will not address
housing unaffordability.
Currently, for rezonings that provide
residential uplift, the City’s Affordable Housing Program enables additional
affordable housing contributions to be allocated to a Community Housing
Provider for Affordable Housing in perpetuity above the ‘base’ local government
area-wide levy.
I welcome the NSW Government’s 2024/25 budget
that includes $5.1 billion towards social housing - the biggest single
investment in social housing in the state’s history that will deliver 6,200 new
social housing dwellings. The City has a target of 7.5 per cent social housing
and 7.5 per cent affordable housing by 2036, meaning we need around 12,000
additional affordable housing dwellings and 2,000 additional social housing
dwellings.
The City’s ambitious targets always envisaged
a whole of government approach to delivering more social and affordable housing
and relies heavily on everyone doing their bit including the development
industry. Some of this investment must be spent in the inner City, close to
services, facilities and jobs.
However, the NSW Government must also ensure that
an Affordable Housing contribution will be applied where the residential
development capacity of land has been increased.
Challenges
Starting in 2018, and intensified by Covid
19, a perfect storm of factors have made many new housing developments
unfeasible. These include a 35 to 40 per cent increase in materials and labour
costs, shortages of skilled labour, tougher financing hurdles after the Banking
Royal Commission, steep interest rate rises, and a record number of
insolvencies in the building industry.
While the planning system will not overcome
the feasibility issues faced by the building industry, it is vital that the
City’s planning framework establishes the opportunity to deliver well-designed,
sustainable homes and attractive neighbourhoods as market conditions allow.
Meeting our new housing targets largely
relies on developers, builders and landowners who control the lodgement of
applications and construction commencements. The sector is highly sensitive to
economic conditions, availability of construction labour, materials and
finance.
I note the NSW Government’s announcement that
new targets are accompanied by $200 million of financial incentives to help
planning performance and deliver infrastructure including roads, open spaces
and community facilities. This funding is contingent on targets being met or
exceeded and reduction of development assessment timeframes. However, councils
will need significantly more infrastructure funding upfront with development so
that essential community facilities can be delivered before people move in.
The broad application of the low and mid-rise
housing reforms means it may be difficult to predict where additional
infrastructure is needed. A more planned approach under a Local Housing Accord
will enable the City to plan for local infrastructure.
The NSW Government must ensure that Councils
can provide essential community infrastructure through contributions plans and
that the NSW Government must also deliver the necessary State infrastructure
such as public transport in a timely way. This will include slowing traffic on
busy corridors such as Parramatta Road and Broadway so that more land is
suitable for housing.
It is clear it will take all levels of
government working together to meet the National Housing Accord and help
address the current housing affordability crisis.
COUNCILLOR
CLOVER MOOrE AO
Lord Mayor
Moved by the Chair
(the Lord Mayor), seconded by Councillor Kok –
It is resolved that:
(A) Council note:
(i) last month the NSW Government allocated new five-year housing targets to 43 councils to meet its commitment of delivering 377,000 new homes under the National Housing Accord;
(ii) the City's new housing target is 18,900 new private homes to be completed by July 2029;
(iii) in February and March 2024, the City made submissions to the NSW Government's Explanation of Intended Effect: Changes to create low-and mid-rise housing and the NSW Parliamentary Inquiry into the development of the Transport Orientated Development Program, which includes examining the impacts of more low and mid-rise housing, which was informed by discussion at a residents' community action group briefing hosted by the Lord Mayor; and
(iv) in March 2024, the Lord Mayor met with the Minister for Planning and Public Spaces who suggested there may be an opportunity for the City to enter into a Local Housing Accord instead of the low and mid-rise housing changes applying in our area;
(B) Council commits to working with the NSW Government on a Local Housing Accord to ensure more opportunities for housing that deliver well-designed, sustainable homes and attractive neighbourhoods as market conditions allow;
(C) the Lord Mayor be requested to write to:
(i) the NSW Minister for Planning and Public Spaces inviting him to enter into a Local Housing Accord with the City of Sydney, which will:
(a) outline the City's plan for its projected dwellings target in place of the low and mid-rise housing planning changes;
(b) agree to count 'non-private' dwellings as well as 'private' dwellings towards our target to enable us to plan for more student housing, seniors housing, co-living and boarding houses which all play an important role in accommodating our diverse community;
(c) ensure the application of an additional Affordable Housing contribution where the development capacity of land is increased; and
(d) establish collaborative arrangements for the timely delivery of infrastructure and housing on recently rezoned NSW Government land such as Blackwattle Bay and Waterloo South; and
(ii)
the Prime
Minister and NSW Premier with a copy of this Minute and calling on the NSW and
Federal Government to significantly increase funding to support the 43 eligible
NSW councils to deliver adequate community infrastructure to be provided
upfront to support new housing targets so it is in place when people move into
new developments; and
(D) the Chief Executive Officer be requested to report back to Council on progress of the draft Local Housing Accord for consideration before the end of this year.
The substantive
Minute was carried unanimously.
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