When the University of New South Wales appeared before a local planning panel on Tuesday to lobby for a proposed student housing development, the anger in the room was palpable.
The university was contesting a counter-proposal from Randwick Council in Sydney’s eastern suburbs to reduce a 1,066-room development, set on 20 and 23 storeys at the site of a campus carpark, to seven storeys, citing the unsuitable “height and bulk” of the building.
“This is politically motivated and a blatant misuse of strategic planning,” Michael Rowe, a director of consultants Beam Planning and lecturer at UNSW, told the panel. “It’s really difficult to comprehend how we came to be in this situation.
“We’re the single largest employer in the LGA. Any decision to downzone university land should not be taken lightly.”
UNSW had previously reduced the proposal, to be managed by student housing company Iglu, to 15 and 16 storeys with 881 rooms, after more than a year of opposition from the council.
That proposal was rejected by councillors as “greedy” and “ad hoc”, citing concerns over overdevelopment and the “local character” of the area, as well as potential encroachment on the neighbouring National Institute of Dramatic Art (Nida).
The planning panel endorsed the council’s proposal to amend the development plan in line with the seven-storey height limit. It will come to councillors this month and, if approved, be submitted to the relevant department.
The council’s opposition to the UNSW proposal highlights the dilemma facing universities in the light of new federal government legislation that would allow the education minister to set a maximum number of new international student enrolments education providers can offer.
If universities want to enrol international students beyond the maximum number, they will be required to establish additional accommodation for them.
But they argue state and local governments are often working in the opposite direction, putting barriers in the way of their efforts to house more students.
Student housing in crisis
International students have come under the microscope from both sides of politics, with a record 700,000 now studying in Australia.
According to the latest census data (2021), the vast majority – up to 80% - are renters in the private market, with just 80,000 purpose-built student accommodation (PBSA) beds operating nationwide in the middle of a rental crisis.
Only 5% of students were living in student accommodation when the census was taken. The remaining 15% lived in homestays and other housing.
Peak bodies say for the federal government’s policy to work it must fast track PBSA developments – warning lengthy delays and red tape are bigger contributors to the housing supply shortage than migration.
The Student Accommodation Council is calling for PBSA to be defined as an “asset class” – a unique category, separate to residential properties, that would allow it to sidestep strict regulations around parking requirements and density.
Anouk Darling, the head of the student accommodation provider Scape and president of the Student Accommodation Council, told a parliamentary inquiry in 2023 that as planning restrictions stood, “the capital doesn’t stack up”.
She said it took seven years in Sydney between application and approval for a development – with “punitive environments around tax and planning restrictions”.
Under accelerated policies for asset classes such as build-to-rent, approvals have a two-year time limit for development to start.
Torie Brown, the executive director of the Student Accommodation Council, says while federally Labor is urging universities to build more housing, state and local governments put obstacles in the way of development.
Brown says the federal push for more student accommodation should motivate state governments to lift restrictions, and local governments should understand that speeding up the planning process will have “a direct impact on the viability of the universities in their areas”.
“There is simply no reason a planning approval should take years.”
A recent Property Council report found the current pipeline of new PBSA would not meet surging demand, forcing some students into illegal living arrangements.
About 8,000 new beds are expected to be built by 2026, but the council estimates 84,000 would be needed in the same period to reduce the impact of international students on the rental market.
The problem has been exacerbated by recent sales of student accommodation by a string of universities, including UTS, the University of Wollongong and the University of Sydney, citing financial instability after the pandemic.
Others say fast-tracking PBSA will do little to improve housing affordability for students.
Ngaire Bogemann, the president of the National Union of Students, says the body is not against building more PBSA, but it should be accompanied by other reforms.
“What used to be a traditionally cheaper alternative is no longer that – the average rent [for PBSA] is $530 a week, often for the size of a shoebox, without tenant rights and protections,” she says.
“We have a historic problem with exploitation of international students in the housing market. If you want more student accommodation to be built, iron out issues in the sector, or have the government provide accommodation with rental caps.”
‘Like sardine tins’
Expansion also frequently faces opposition from non-student residents. Speaking to the Randwick local planning panel on Tuesday, Lauren Sideris of the Kensington Residents’ Group said the Iglu development was “profit driven” and had a “huge visual impact issue”.
“We believe there are other uses universities should consider [for their land] than student accommodation,” she said.
“These are tall towers with very small rooms – like sardine tins. You have a very, very small area in order to yield a great amount of apartment numbers, that charge a very high rate.”
Student accommodation offered by Iglu in Sydney ranges from $549 a week for shared apartments to $959 for studios. According to SQM Research, the median weekly rent for all units in Sydney is $703.
Iglu was approached for comment.
Speaking on Sky News on Wednesday, the chief executive of Universities Australia, Luke Sheehy, said it was a “fair proposition” that every student should have fair access to the housing market, but said federal, state and local governments should also be acting.
“It’s right that we have a negotiation and do our part as a sector, but it’s also important that the government does its part,” he said.
“What we want to make sure is that we are given the certainty and stability … to access this important international student revenue so our universities can continue to deliver – including delivering housing.”
