The Federal Government has created about $2.2 billion of extra funding programs for housing, on top of about $4 billion a year it already spends through Commonwealth Rent Assistance, the Commonwealth-State Housing Agreement (now called the National Affordable Housing Agreement) and First Home Owners Grant. In addition, the Federal Government has identified surplus land, some of which would be suitable for residential development.

If all governments felt that providing a range of housing - including many tenures in affordable housing was their responsibility within their own jurisdictions (including local governments) and set themselves the goal of creating diverse, multi-tenured communities while catering for growth in dwellings needed in each locality, then the magnitude of change which will be required to provide enough housing could be achieved.

The private sector has an important and large role to play - particularly in masterplanning and in delivery of housing as well as packaging innovative funding and partnering solutions. It is critical that all sectors - private, public and not for profit, work together.

For instance, research and analysis carried shows that the inclusionary zoning - or prescribing that a percentage of housing must be affordable - while appearing to be a viable solution, will in fact exacerbate the problem.

Where land has already been transacted, an inclusionary zoning requirement will increase the price of all other housing within the project. That is, with a 3% inclusionary zoning requirement, 97% of housing needs to become more expensive to pay for it.

Where land has not been transacted, inclusionary zoning will decrease the value of the land.  The other major aspect of inclusionary zoning is that it could only ever be a very small contributor to the scale of affordable housing which is required, because it focuses on a very small percentage of new construction only and its feasibility relies on very strong housing markets.

Inclusionary zoning is also a very slow and costly way to create affordable housing - with the number of months spent in discussions and negotiations with governments unused to dealing with it often exceeding the number of dwellings created.

There are a number of more effective policy levers governments could use to boost the supply of housing of all types.

Lend Lease is committed to the delivery of affordable housing and working with governments on finding the best solutions.  Lend Lease has been instrumental in the creation of first affordable housing building at Victoria Harbour in Melbourne's Docklands, within walking distance of the CBD. This building is the result of a partnership with community housing provider Melbourne Affordable Housing , VicUrban, and the Office of Housing.

In New South Wales, Lend Lease has two projects with affordable housing commitments - Ropes Crossing near St Marys and The New Rouse Hill in Sydney's north west.

Lend Lease believes community housing providers will play an important role in the supply and management of affordable housing in Australia,  particularly dwellings which are rented, and is working with a range of providers across Australia.

We need an innovative approach to lower the purchase price of housing

Lend Lease has also been very active in developing new products to reduce the cost of house and land packages in its outer-urban master planned communities.

It was one of the first developers to offer a range of lot sizes rather than only offering standard 700m2 lots.

Adaptus - a detached home with a carport - was released to the market in April 2005, with a starting price of just $199,000 for house and land at Caroline Springs in Melbourne.  Lot sizes range from 260 to 325 m2.

In Adelaide,  Lend Lease released a single storey housing initiative called Studio 51  at its Mawson Lakes project in 2006.  It was priced under $200,000 with a block size of 127.5 m2 and it has sold extremely well.  Earlier this year, Studio 51 won the the UDIA National Affordable Housing Award in recognition of its innovative approach the problem.

With local innovation combined with international expertise, it is possible to deliver real solutions to homebuyers and to work with governments to address Australia's housing affordability issue. 

Lend Lease's national affordable housing manager, Fiona Ryan-Clark oversees the company's relationships with community housing providers including an agreement with Community Housing Ltd to pursue innovation in the provision of all forms of affordable housing nationally. Fiona has been the industry representative on for the Research Panel of the Australian Housing and Urban Research Institute (AHURI) for the past three years. Prior to joining Lend Lease, she ran her own public affairs consultancy which focused on major social change issues such as water reform, after training and working as a journalist.