Luxury homes built on the site of former unit blocks in Sydney are counting towards council targets for new dwellings, even where they have reduced the available housing stock by displacing multiple properties.
A swathe of interwar apartment buildings in Sydney’s eastern suburbs and inner city face the wrecking ball, to be replaced with modern residences, as Guardian Australia revealed on Wednesday.
Now housing advocates have called for the federal and state governments to stop relying on Australian Bureau of Statistics data that only counts gross dwelling approvals for their housing metrics.
The managing director of the Australian Housing and Urban Research Institute, Michael Fotheringham, said it was difficult to hold housing targets to account if developments were being counted as a gain when they actually represented a net loss of properties.
“We need to have better tracking,” Fotheringham said. “In a sense, additions in housing stock are meaningless if you don’t factor in subtractions.
“It’s as though knocking down an [apartment] building and building a house there is the same as building that house on a greenfield site.
“We’re just not doing the maths properly.”
The head of planning and housing policy at the Committee for Sydney, Estelle Grech, said the city was “effectively going backward” and needed to use housing figures that could measure and identify the trend.
“It’s such a problem because it’s going to reduce the diversity of communities and make wealthy enclaves even less accessible,” she said.
“Given we’ve got targets to build these kinds of dwellings, we can’t afford to go backward. There’s this assumption that urban renewal always results in an increase in dwellings – you would never imagine you’d be reducing it.”
Grech pointed to a recent New South Wales Productivity Commission report that found infrastructure-related costs of housing developments in western Sydney were up to $75,000 higher a home than developments in more central suburbs.
Several inner-city and eastern Sydney councils have passed motions to include “no net dwelling loss” provisions in their planning guidelines, in a bid to protect some of the few relatively affordable properties in their generally affluent suburbs.
Grech said the trend of demolishing unit blocks to build a smaller number of homes appeared to be confined to just a handful of areas and should ideally be dealt with by councils, but “there’s the opportunity for the state government to come in if some councils aren’t willing to”.
“By default these buildings have become the cheaper, grittier, relatively affordable housing in these areas,” she said. “If we lose them, that’s a huge problem.”
Since publication of Wednesday’s story, Guardian Australia has been notified of several more cases, including two unit blocks in North Bondi – one of which was built in 2019 – due to be turned into a single luxury dwelling.
Among the other buildings under threat is a 1928 two-storey block in Bellevue Hill containing eight small apartments, which is set to be demolished after Woollahra council approved a controversial application for a new development of three units.
Another is a block of four apartments in Tamarama – part of neighbouring Waverley council – which was recently sold following marketing that it had development approval to turn it into a single luxury residence.
On Wylde Street in Potts Point, two adjacent three-storey blocks comprising 20 units may go in favour of five luxury apartments.
The mayor of Waverley, Paula Masselos, said the trend was claiming about 30 dwellings each year in her council area.
“What’s left of our affordable housing stock comprised of older, smaller units is being snapped up by developers and is being replaced with large luxury apartments or houses that do not cater to the diverse housing needs of our community,” she said.
The Greens housing spokesperson, Jenny Leong, said losing inner-city dwellings was “the last thing we need to be doing”, especially if it was “to deliver more luxury, elite homes for the mega rich”.
“Councils and the state government have a role to play to make sure that we’re not losing studio apartments, smaller units in our city that are affordable.”
Justin Simon, from Sydney Yimby, said housing targets should reflect net dwelling increases.
He noted that many of the buildings targeted as part of the trend would be illegal to build now given parking requirements and zoning rules.
“There’s been a massive decline in the construction of these two- and three-level buildings,” he said.
A spokesperson for the state planning department said it was up to councils to increase housing supply elsewhere in the local government area if they approved a reduction.
“We all have a shared responsibility across all levels of government to deliver more housing supply overall and are working with Sydney councils to deliver a fairer distribution of more diverse, well-located housing where people want to live and work,” they said.
The department pointed to powers that all councils in Sydney have to impose a levy on developments that result in a loss of affordable and low-cost housing.
The Minns government is undertaking an audit of all government-owned land to see what could be developed into housing, including social housing.
