Urban Taskforce Australia has assembled a number of Australian property developers, represented by the industry association, to submit a proposal to the NSW Government.
The proposal is designed to deliver a new form of affordable housing which could produce 40,000 new affordable homes in Sydney over the next 10 years.
“Sydney’s housing affordability crisis is clearly getting worse as indicated by calls for action by Federal Treasurer Scott Morrison and by State Planning Minister Rob Stokes’s recent statement about a shortage of 100,000 homes in Sydney,” Urban Taskforce CEO Chris Johnson said.
Mr Johnson said the proposal has been developed in response to Sydney's current housing supply problem, where the 30,000 housing completions reached last financial year was deemed 6,000 less than the average needed each year for the next 20 years.
“There is a simple answer to providing more homes and to housing affordability in Sydney by modifying slightly the NSW Affordable Rental Housing State Environmental Planning Policy," Mr Johnson said.
“The NSW government can modify the current Affordable Rental Housing SEPP to create a real incentive to the property industry to provide large numbers of affordable homes across Sydney."Mr Johnson believes the current Affordable Rental Housing SEPP 2009 gives little incentive to the property industry to build affordable homes, but said that a change in formula to give a 20% bonus floor space and height could allow for thousands of new affordable homes to be built each year.
“The Urban Taskforce estimates that up to 4,000 new affordable homes could be produced each year leading to 40,000 over a ten year period," he said.
"This would have a massive impact on the current supply of affordable homes across Sydney at a scale we have never seen before.”
The Urban Taskforce proposal draws on the definition of affordable housing from the Federal Government’s National Rental Assistance Scheme (NRAS), according to Mr Johnson, where newly built one, two, three and four bedroom homes are rented at a 20% discount to the market rent of each local government area, with dwellings remaining in the affordable housing scheme for up to 10 years until they are sold back to the general market.
“Some Sydney councils champion inclusionary zoning where the developer must provide a percentage of homes as affordable but this is only another form of taxation on housing production, and will only increase the cost of the remaining houses being sold to mums and dads and first home buyers," Mr Johnson said.
"We believe that rather than imposing a tax on the developer an incentive approach with bonus floor space is more equitable and more likely to lead to large numbers of affordable homes being built.
“The scale of housing delivery of up to 4,000 a year along with the guaranteed 10 years rental income is likely to establish a new asset class for institutional investors like superannuation funds who like a low risk long term investment.
"This type of affordable housing product could potentially inject billions of dollars into affordable housing which currently is not being invested in the sector ensuring there is scale and enough housing for low to moderate income earning households.
"Attracting this institutional investment will ensure a long-term sustainable supply of affordable housing," he said.
Mr Johnson said the proposal doesn’t put any pressure on the government’s budget, nor is it asking for any tax payers handout, and on that basis has encouraged the NSW Government to give the proposal serious consideration.