Sydney property developers are “laughing” about the windfall they will receive under proposed changes to the state’s planning rules, according to an eastern suburbs mayor, as debate continues on how to ease the housing crisis.
The Minns government announced on Thursday planning changes that will allow developers to build taller and denser buildings, and have them fast-tracked, in an attempt to increase the supply of affordable housing.
At a speech in western Sydney, the premier, Chris Minns, said New South Wales needs 314,000 new dwellings in the next five years – but will only complete about 180,000 at the current rate of construction.
Under the changes, housing developments valued at more than $75m and with 15% of its space used for affordable housing will get access to a “state significant development” pathway that would fast-track approvals. Under NSW regulations, “affordable housing” means dwellings that are offered at around 20-25% below the market rate, but only for 15 years.
Developers proposing such projects will be able to also add 30% to the “floor space ratio”, and build 30% higher than the local environment plans allow.
Two NSW mayors have criticised the incentives on offer.
The Waverley mayor, Paula Masselos, whose council oversees suburbs such as Bondi and Tamarama, said the changes were too developer-friendly and would be embraced by the sector.
“They’re laughing, because they will have had significant windfall benefits as a result of putting in a few affordable housing units for a short period of time,” Masselos said.
“So the question is what happens to these people who are in these places after 15 years, where are they going to go to? It is a model that I don’t believe really works, because those units revert back to the developers.”
“You’re also cramming a whole lot more people in at the detriment to public amenity.”
On Thursday Minns said the policy was aimed to “maximise housing affordability” in the private market.
“This will result in more affordable housing in the market and more supply overall, both of which are crucial in tackling housing affordability,” he said.
Masselos said she was not “against development” but was “against overdevelopment”, saying infrastructure needed to play a larger role in the conversation.
“There are incredible strains on our very limited public open spaces, and we saw that during the pandemic. We don’t have enough public transport, our hospitals are full, our roads are gridlocked.
“So it’s a problem when our own planning laws are not necessarily being respected.”
The Byron shire mayor, Michael Lyon, said it was disappointing that affordable housing would not be provided in perpetuity.
“It feel like he’s kicking the can down the road a little bit with that sort of approach, because you’re not really adding to the supply,” Lyon said.
“I would prefer to provide those bonuses on floor space and the like for in-perpetuity affordable housing … [so] you don’t have to worry about that supply leaving again in 15 years. Otherwise you’re constantly going to be playing catchup.”
The Greens’ housing spokesperson, Jenny Leong, said that while the changes were welcome, public and affordable housing needed to be mandated in all new developments, not just incentivised.
“A target of 15% affordable housing doesn’t even touch the sides of the housing affordability crisis we are facing,” she said.
“The scale and severity of the problem calls for greater ambition: at a minimum, we need to see 30% affordable housing in perpetuity for all new private developments as a prerequisite for development consent.
“The cost of rent and housing is out of control – supply alone will not fix the crisis unless we mandate affordability. This means setting rents for affordable housing relative to income and guaranteeing affordable housing in perpetuity.”
The premier and other key government figures, including the housing minister, Rose Jackson, have previously raised the need to rapidly increase the number of new homes being built.
