Every article in this week’s ULN shares a common thread – the issue of housing affordability. Newspapers, research articles, government publications, social media posts from political satirists – they all acknowledge that prices are going up.

Low interest rates and relatively loose APRA controls on lending have combined with State and Commonwealth stimulus to drive demand for new housing.  The issue that now has growing attention - is the problem with supply.

For a while now, the Urban Taskforce has been prosecuting the case that prices have been pushed up because of the lack of supply. Initially the huge price increases were evident in freestanding homes, but as the cost of these have grown outside the budgets of many households, apartment prices have also increased.  Data released by Core Logic this week shows The Sydney apartment market has risen by over 7% so far this year. CoreLogic's research director Tim Lawless believes the convergence of growth in house values and unit values could be another demonstration of affordability becoming more challenging.

In NSW, the planning system is complex, slow, duplicative and is widely recognised as a massive hand brake on the productivity of the State.  DPIE has acknowledged this and has driven several positive reform initiatives. Some of these, such as the concerted push and focus from the Planning Delivery Unit,  are showing signs of working, but the slowness of change is exacerbated by the difficulties with changing the Act and the desire to “not offend” Councils.

Many in our industry are caught in the ironic position that prices and demand has never been so high, yet approval levels have once again dropped off. Our industry is simply unable to meet this bursting demand. 

ABS data released this week, shows there has been a drop off in approvals across Australia, but most concerning in NSW, is the number of new house approvals is about the same as the number of new apartment approvals. This contrasts with the 25 year average of a 35%-65% split between new homes and new apartments.  

When international travel, international students and immigration return there will be a surge in demand. If the approvals are not there the housing affordability crisis will only worsen. Affordability is an increasing issue as parents and grandparents and even political satirists increasingly realise that younger generations will have to seriously consider moving cities to find an affordable abode.

The Federal Treasurer has recognised the looming crisis. Jason Falinski MHR has been commissioned by the Treasurer to Chair a Commonwealth Parliamentary Inquiry into Housing Supply and Housing Affordability. Urban Taskforce will be shortly providing our written submission to, and appearing before, the Inquiry.

Click here for more information on the Federal Inquiry into Housing Supply and Affordability.

Housing supply and and housing affordability are the main game for a post COVID economic recovery. Urban Taskforce calls for the deferral of all policy reform initiatives that do not support housing supply and the reduction of costs to new home buyers.

Since the EIE for the Housing SEPP was published, there has been a wholesale exodus from the delivery of affordable, private housing among Urban Taskforce members.  This process of policy review has produced a range of very damaging outcomes for the feasibility of development of lower cost housing types.  The practical effect of the Draft SEPP is to force affordable housing types like boarding houses and co-living into competition with market apartment housing.  Worse, the Draft SEPP reduces FSR bonuses for co-living, rendering this housing type unfeasible. 

The draft SEPP, if made, will actually reduce housing diversity, limit supply and worsen the current disastrous housing affordability crisis.

On this basis, the Urban Taskforce submission to the draft SEPP is explicit in that we do not not support proceeding with this SEPP as exhibited.  We, along with the other industry peaks have called a 12 month deferral of the policy. We’ve recommended the deferral period be used by DPIE to consider the changes and other policy initiatives suggested in our submission, including:

• Re-drafting the Manufactured Homes and Estates SEPP to facilitate a significant increase to the permissibility of this housing type and remove the current, outdated and expensive requirement for the manufactured home to be transportable.
• Investigating a time-limited opportunity for the conversion of serviced apartments into new affordable homes without the need to comply with updated ADG guidelines.
• Mandating boarding houses/co-living as permissible in all residential and business zones to facilitate a broader range of housing typologies, across different price points throughout different locations.
• For Seniors Housing:
  o Including the same prescribed zones for independent living units that are proposed for residential care facilities
  o Including rural land zones as a prescribed zone
  o Ensuring sites adjoining RE2, SP1 and SP2 are not disadvantaged by the removal of the SCC process
  o Floor space bonuses similar to those proposed in areas where residential flats are permissible should be provided in the B3 to B8 zones
  o Planning Panels determining seniors housing applications should include experts in the operations, social impact as well as architects with experience in the design of seniors housing.
  o The provisions relating to ‘non-discretionary standards’ should be modified to make clear the intent of the clause where LEP provisions are less onerous than the standards in the SEPP.
  o Applications that include ILU’s and are over a certain dollar threshold should also qualify for the SSD pathway for approval especially if they include innovation and / or affordable disability housing

Click here to read the Urban Taskforce submission to the draft Housing SEPP in full.