Housing affordability

| June 6, 2017

The New South Wales Government recognises housing affordability as one of the most important issues for the future of the state. To help address this issue, institute for active policy Global Access Partners (GAP) hosted an online consultation on Open Forum to give the community an opportunity to voice their opinions and suggest possible solutions.

Read the Consultation Report Here

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  1. Stewart Nattrass

    Stewart Nattrass

    May 3, 2017 at 12:39 am

    At the time of the GFC, real estate in the USA tumbled, and if the same happened in Australia it would severely test the viability of our banking system. Not coincidently there was at the same time an influx of international money from Asia, specifically from China, investing into the domestic housing market. I think this one event saved Australia from a catastrophe.
    Almost 10 years on I think it is time to review international participation in Australian domestic housing. Many overseas country mandate that only residents can buy and own residential property.
    There are many other avenues for the world to invest in Australia ie the stock market. The pressure on our limited hosing stock being exerted from international speculation needs to be reeled in. We should take the lead from other countries and insist that only residents can purchase individual dwelling.

  2. Baz01

    May 3, 2017 at 8:37 am

    There is no doubt that the most effective way to improve housing affordability is to increase supply (i.e. release more land)… All other measures are like double-edged swords; some may even have a negative effect on affordability… The NSW Premier got it right in the first place!

    • nmcgregor

      May 22, 2017 at 9:50 pm

      I agree with Baz01, also creating smaller dwellings that are better built, rather than massive oversized properties that are just too big is another issue, when you look workers cottages going back how many people could fit into one small property and still function not always well but just as dysfunctionally today. When you read the ragged trousered philanthropists and those that couldn’t afford to live rented out their rooms, not that we want to go back to that way of living. There are so many facets to this issue. The cost of housing, the types of buildings that are built the materials that are used the waste in the industry. Then there is the lack of wages growth at the bottom end (e.g. 49 and not had a wage increase in 13 years), making properties unattainable and unaffordable. Our obsession with home ownership, but the lack of protection for renters and landlords which has created uneasy relationships, mismanagement by real estates. The lack of help with housing by consecutive governments both state and federally selling off public homes to private buyers at premiums and not building more stock to increase demand, and not building sustainable properties that are well built that help the tenant to live comfortably. Gosford Council has taken the initiative to building a group of small dwelling properties for lower income. When governments stop pandering to the rich and offsetting their taxes with negative gearing which only works for those who have too much money and so need create losses to increase their tax returns and governments start investing in those of us that are the working poor and those of us who cannot find work because of lack of jobs to those of us who are in the poverty cycle of social welfare and the pick up the slack and provide to the lower end of society rather than propping up the higher end of earners reinvesting in smaller properties that offer quality living rather than quantity invest back into the community then housing issue could be lessened, but until these steps are acknowledged and we have a government that cares socially nothing will change and the talking and waffling will continue while more and more of us are pushed out onto the streets – like Dickensian England.

  3. Terrence Bondfield

    Terrence Bondfield

    May 8, 2017 at 4:10 am

    I suggest the answer to this issue, is a cross between public and private housing. The Commonwealth and State both have redundant or semi redundant land in the Sydney and Melbourne basins.
    For example the Orchard Hills defence site in Penrith NSW has been long muted to be relocated to the Nowra defence area. This site is vast in size and was developed during WW as a munitions holding area and training area for the RAAF and RAN. The use now has been downgraded and is suitable for housing.

    First home buyers could buy in only for the cost of building a home and if the State foregoes stamp duty it would allow first home buyers into ownership for under $300.000. The house prices could be of a competitive nature and be pegged , so that first home buyers don’t get into the trap of building MacMansions, therefore trying to service a $600,000 plus mortgage debt.

    The lease hold arrangement is a crossover between Public and Private home ownership with the leasehold being available for a 30-50 year period. At a future date the Commonwealth decides that the lessee can purchase the land that would be decided once the home mortgage has been reduced or is paid out.

    The buy cost is low for the home owner and the mortgage is also affordable. Orchard Hills for example is located within Penrith City and has all the amenities available including public transport, major regional hospital and general services and is in close proximity to the new international airport under construction, where jobs within the airport and with service industries would become available in the not too distant future.

    Housing costs can be very affordable, as an example is Perry Homes from Maitland near Newcastle or MacDonald Homes NSW can sell a home and land package on the north coast for around $350.000-$3750.000 for a four bed, two bath, double garage including fit out. If you take out the land value, these people are constructing a home for around $200.000. Very affordable for new home buyers in the metropolitan market. Their repayments taken on today’s interest rate would only be around $200.00-$300.00 per week. Less that any rental in Sydney or Melbourne.

    As stated, the land purchase is deferred until the home construction mortgage is paid out or considerably reduced, and until that occurs the land is under lease at a nominal figure which is deducted off the purchase price at the future date.

    This solves the issue of building public housing for those who are in jobs and can afford a mortgage, and lets those the funds go into providing housing for the much needed homeless people in our society.

  4. BobOfAlex

    May 8, 2017 at 4:43 am

    All of these have been discussed by various economists
    1 Scrap stamp duty which limits housing market liquidity. Revenue neutrality could be achieved via an annual property tax, wealth tax or death duties.
    2 Negative gearing possibilities:
    * Phase out (say over 10 years?)
    * Could maintain for new construction only
    *Limit to one investment property only
    3 Capital gains tax concession – progressively abolish.

  5. Michael Gill

    Michael Gill

    May 9, 2017 at 6:42 am

    Short points:
    – force banks to remove the 20% deposit limit to avoid bank insurance thereby reducing mortgage repayments for first time buyers.
    – Make stamp duty voucher based or repairs, furniture and moving costs
    – Increase supply by targeting large disputed building sites are not left idle and vacant for years
    – Provide employment incentives to encourage people to move and buy in to regional towns.
    – Stop or limit the growth of short term contract jobs (teaching) in favour of permanent full time positions thereby increasing financial security for first home buyers.

  6. Anne Fritz

    Anne Fritz

    May 11, 2017 at 1:51 am

    Fifty years ago I walked along Watsons Bay Beach and marvelled at the egalitarian nature of the housing there. Old workers’ cottages next to new houses, next to older style apartment blocks, ensured that people not able to afford the expensive houses could still rent and live in this magical and beautiful harbourside position. That is the Australia to which we still can aspire.

    Of course today there are many more people living in Sydney, and many more still are expected to arrive. The Eastern Suburbs have become an enclave unaffordable by the children of the very people who lived in those houses by the bay, fifty years ago.

    The current issue of housing affordability needs to be addressed from several different directions, at the same time. None of these ideas are new or immediately able to be fulfilled, but they must be on the planning board.

    If Sydney is to be ready for a large increase in its population, many more houses and apartments need to be built – that much is clear; a good future for our building industry. The increase may be upwards (in city centres) and outwards, into satellite towns which provide their own work opportunities (e.g. Badgery’s creek).

    Communication and transport is obviously also needed. Fast trains and light rail are current options, and will become more financially viable as population density increases. This indicates the need for Government investment and will yield new work opportunities outside the city centre.

    Focusing on the affordability aspect, here are some additional suggestions – not new but necessary, together.
    • A foreign investor tax, to take the heat off the rapid real estate price escalation due to take-up by non-residents.
    • A gradual decrease in negative gearing on investment properties.
    • A gradual decrease in the discount offered on the capital increase tax.
    • The building of social housing, for rental and eventual purchase (as with cars). Any new building areas need to planned with social services, work opportunities and transport infrastructure ready before building is complete (not the usual!!!) Some of the taxation income from the options above will contribute to the new builds.

  7. Andrew Paul

    May 12, 2017 at 12:00 am

    The US and UK have the right idea with Community Land Trusts. See my article at http://communitylandtrust.com.au/index.php/2017/05/11/2017-federal-budget/ hope you enjoy.

  8. Jacques De la Haye

    May 12, 2017 at 3:15 am

    The same goes for most nations: the lack of affordable housing is becoming a tremendous problem, world wide. Somehow there is a tendency that developers build predominantly for the upper-mid and high end of the market. Make entry levels easier and lower, let people rent with an option to buy with rents partly counted as the down payment for the flat, condo or house (5yrs rent: 1.yr 75%, second 60, 3. 40 and 4. and 5. yr 25% of the rent over that year counting as part of the equity. Much more must be done for the lower income families to rent or buy a decent house. Give those people to the million$ feeling home even when it cost just 600 per month.

  9. Laurie Newman

    May 16, 2017 at 6:43 am

    The ANZ-Property Council Survey showed that 12 months to Sept 2016 approx 25% of all Sydney houses, new and existing, were sold to foreign investors. RBA data shows investor borrowing in 2016 was 61% of all housing borrowing. Combined these statistics show that the Government needs to take measures to remove the attractiveness of investing in housing and like other countries, restrict or eliminate foreign buyers. Demand will therefore decrease and prices move back towards greater affordability.

  10. arcobelina

    May 16, 2017 at 7:14 am

    Governments must resume creating a viable public housing stock for the poorest in society. Creating public housing takes those tenants out of the private housing rental market which will result in lowering rentals for those trying to save to buy their own home. The numbers where this would be effective are rather large, Sydney would need 50,000 government houses. Melbourn & Brisbane similar and the housing should also be built throughout regional areas.

  11. johncunno

    May 16, 2017 at 8:12 am

    In addition to my article attached to this survey i am very concerned that within the NSW Governments solutions package they have identified that new medium density design is required to provide for the missing middle of Sydney, however they have not seen fit to actually implement zoning changes at a state level to put it into effect. by leaving this decision to local government they will fall into the same trap of MIMBYISM that has plagued NSW for far to long. creative design suffers, housing choice suffers and we end up in the same cycle of sameness and lack of choice for property consumers. get the missing middle right and you get people moving again which is one of the biggest causes of the affordability issue, a clogged supply chain to get the over 55’s moving. The NSW government needs to act at a State level and bring in a new version of SEPP 10 ( dual Occupancy ) in the format of medium density multiple occupancy provisions.

    • professed

      June 4, 2017 at 9:57 am

      Agree with johncunno. Whether any of these comments are collated into a public response dosier remains to be seen.

      Housing affordability is a combination of affordable renting and affordable buying. Both will occur with increased supply.

      A very simple and low cost measure, that utilizes existing infrastructure is to drive zoning changes to allow for infil development. High density along main arterial corridors is not the type of housing that will entice the elderly to leave their freestanding homes and allow for families to occupy them or for infil development to occur. Zoning changes that reflect existing medium densities can easily be applied to many Sydney suburbs with little stress on existing shopping, schooling and public transport systems.

      Developing outlying land lots around Penrith etc places significant infrastructure stress and cost on the government and councils and isolates communities socially. That is a longer term requirement that can be delivered in parrallel.

      There are many subburbs in Sydney that have no lot size restriction or allow for 250M2 lots. Many of these are amongst the most highly sought suburbs.

      By forcing zone changes from R1 large lots (ie 500 or 600m2 minimum lot size – yes, its ridiculous in an international city! ) to 250m2 lot size we can allow small developers, mum’s and dad developers etc to re-invigorate suburbs full of ageing spec. build brick and weatherboard homes and attract a tighter and stronger community with well planned medium density.

      That is where the ageing will wish to move into, not into apartment blocks with claustrophobia inducing lifts.

      Its a simple solution. But requires a degree of stick from NSW Planning to force councils to re-zone appropriately and immediately.

      • professed

        June 5, 2017 at 1:54 pm

        Furthermore to this note:- we can look to other leading examples as excellent case studies of success. Notably Auckland which suffers from a similar pressure on housing affordability with similar geographic (harbours/landlocking) constraints. The New Zealanders, as has been demonstrated with their active tourism success, lead the way by taking a bold initiative – that we can learn from – by amalgamation of ALL of Auckland city’s councils in 2010 to create one unitary authority. This is leading to a more focused and improved planning system in the city. The result of this enlightened amalgamation has been ‘The Auckland Plan’, a unified spatial plan overseeing the entire region and looks to proactively lead urban growth in a sustainable manner.

        The affordability crisis is predominantly in our larger and most heavily populated capital cities, so needs a focussed plan within those cities to resolve. Allowing the archaic bureaucracies of the multiple council system to continue with their NIMBY attitude and locally elected councilor governance systems will ensure that the Crisis continues in Australia.

        I am forever amazed and impressed how other nations successfully deliver housing, infrastructure and transport projects of enormous scale – ie: $5B+ in the same timeframes that it can take to obtain planning permission for almost minor development projects in NSW, that is, even with NSW Planning Major Projects support involved.

        We need to modernise and improve our systems of delivery and government or these problems will remain and grow to a point where economic decline will be the pressure valve offering the only relief.

  12. Ian Bersten

    May 17, 2017 at 12:35 am

    My first suggestion is that small mass produced houses tastefully made are located at the edge of public parks. The parks should be carefully selected with an index of usage. For instance, Callan Park Rozelle has 99 acres – a lot of which is a green slope, on which I have never seen more than 4 people and 2 dogs at any time. Some of this land on the high side could be utilized for small 1, 2, 3 bedroom dwellings using that park as the grounds. For compensation for taking public park. The CW could use ground elsewhere to replace it. There are hundreds of parks around Sydney which are hardly used and they could have 1, 2 and 3 storey high flats built on the edges using the park as backyard etc.
    The land is never sold with the flats but a land rental is applied and the flats can be sold for people whose income levels would not allow them to buy houses but who work ion jobs that are needed in the city – nurses, teachers, etc.
    My second suggestion is that mass produced 1, 2 and 3 bedroom flats are made such that they be inserted by crane into a steel or concrete frame with a central corridor to provide access to all units. The units will have a capital cost which is the purchase price to the buyer. The block of land is separately owned – such that $1,000,000 block of land can support say 12 units. With services included this would be less than $100,000 for the land for each unit and this could be owned separately and rented at say 5% return or less than $100/week. The ground floor could contain parking and a laundry and other facilities.

  13. Bill Boyd

    Bill Boyd

    May 17, 2017 at 1:03 am

    the housing affordability problem comes about from investor greed not a shortage of suitable housing or elders living in a house too large or ostentatious
    what is need is a massive shift in attitude from politicians , bankers , real estate professionals
    Negative gearing changes are what will drive the solution to the problem
    Negative should now be restricted to first home buyers living in that home while they are paying it off
    New or second hand and being allowed to claim for all improvements on the house as a tax deduction while living in the house will eliminate all of the rorts and price driving investments Move out to rent somewhere else = no negative gearing tax deduction allowed
    If a person wants an investment- play on the stockmarket-buy a business
    if a person wants to rent , there are plenty of places across Australia than are currently vacant because there are no jobs for the people to be afford to rent
    considering that people are now paying as much for rent as they would be paying for a house , there is no way that a deposit can be achieved but if the negative gearing was restricted to owner occupiers only then there would be a very good chance that there would be a need for new housing
    For owners already using negative gearing , that could be changed to a deduction for tax purposes ( maintenance only and not invest in other properties )
    Australia should follow other countries and enforce the law– not a resident cannot own property in any form–lease for personal use only
    forget the property values will crash hysteria as rented properties will still be around and those investors will still be able to sell the property at the current market value as now there will be more people wanting to buy housing because they will be getting a purpose designed tax deductiion allowing them to purchase
    housing is an investment for the family to provbide care and comfort and should not be considered the sacred relumn of the wealthy to foster their greed
    Basically it comes down to this —you can only live in one home at a time and as that home is a huge expense to an average worker, then there should be a tax deduction for repayments and maintanance , the same as is allowed for investors– after all it is a family investment in the property is it not ?

  14. Bongo drum

    May 17, 2017 at 4:54 am

    The major cities such as Sydney, Melbourne and now Brisbane seem to be trying to follow an Asian
    system of more and more high rise apartments with little thought to resulting congestion of traffic,
    people and overuse of facilities such as hospitals and schools.
    The issue here is not housing affordability but what populations can our cities accommodate.

    Cities such as London, Paris, New York etc don’t focus on more and more affordable housing for
    their populations to buy into with those who want and need to live in these cities most often renting.
    If people living in these countries want to buy an affordable house with garden space for families,
    they tend to move out of the city areas and settle in regional areas.
    The answer in Australia is that if people want the free standing house and backyard, then regional
    areas in NSW such as Newcastle/ Wollongong/ Port Macquarie/ Coffs Harbour etc offer great
    affordable housing and lifestyle for families and are in need of populations to grow their economies.
    There are job prospects in these regions and the ratio of job salaries to mortgage repayments is
    better for younger families.
    The problem seems to be a political focus on the major cities with no thought to alternatives
    on offer else where.
    Think regional and not metropolitan and stop this over development of our cities before we loose
    sight of what being in Australia is all about.

  15. Teresa Kiernan

    Teresa Kiernan

    May 17, 2017 at 6:54 am

    – Address capital gains tax and negative gearing.
    – Use tax disincentives for investors, not fines, fees and subsidies. Wealthy entities don’t care about fines and fees, and pass these costs down to customers. Subsidies, such as the First Home Buyers Grant, simply increase prices. Tax is a raked and ongoing percentage subtraction of profits which cannot be passed over to customers as price, because customers could not afford to pay it.
    – Address massive and rapid immigration (boosting demand).
    – Address lack of regulation in the economy.
    – Address the decline in wage growth by encouraging employers via the Fair Work Act to facilitate employees working two or three jobs.

  16. Astrid Vasile

    May 19, 2017 at 2:48 pm

    Open more land by Government – for residential. Remove some of the Planning Restrictions, Removed cost associate of obtaining licence, and providing the Infrastructure.

  17. Antoinette Colbran

    May 19, 2017 at 2:53 pm

    I think we have to be incredibly mindful of the impact on housing affordability that foreign investment has in our locality. It is a simple ‘supply and demand’ ratio. In my own case having owned previously in Sydney, through massive financial change, that gap has widened for my family ostensibly. For the first home buyer, we should always legislate to allow incentives for these people who honestly want to fulfil their dream of owning their home. Despite what some opinion suggests – owning a home does provide security – and that it just as big in the psychological space as it is financially. Change the planning rules and allow the spread of housing is the first port of call also.

  18. Bina Narula

    May 19, 2017 at 3:09 pm

    What is definition the “affordable housing” given you are hosting this forum?

    To limit foreign ownership of “affordable housing” would be a tremendous start. Despite existing laws, most new housing gets snapped up by foreign investors especially from China who are very apt at working around the system and exploiting loop holes in the current laws. Then to make matters worse, these dwellings after they are aquired sit unoccupied creating a significant squeeze in the rental market too.
    There is a lack of monitoring of buyers of affordable housing.
    I understand the Federal budget is addressing this issue.
    I will have to see it to believe it!

    • editor


      May 19, 2017 at 3:15 pm

      Hi Bina, thanks for your question about a definition. Affordable housing and housing affordability are often used interchangeably. Housing Affordability usually highlights the relationship between expenditure on housing versus household incomes. Often first homebuyers are referred to but we have also extended our consultation to empty nesters and others who are feeling the effects reflecting the current debate in 2017.

      On the other hand affordable housing refers to low-income or social housing.

      On our website there’s a great blog from Justin Douglas from the NSW Department of Planning who outlines how the perceptions of housing affordability have changed over the time – https://www.openforum.com.au/understanding-housing-affordability/

      Thanks for your comments too. We really appreciate you taking the time to have your say!

  19. Karen R Levin

    May 22, 2017 at 8:19 pm

    I am involved in one of the largest redevelopment areas in Australia – Green Square and South Sydney and one of the biggest issues is empty investment purchases. There should be a strict rule against overseas buyers buying property and then leaving them empty. Around Green Square, Mascot etc and in all the new apartments, there are units left empty…. this has a shocking effect on housing affordability – I know of developers who have researched and filmed unit buildings around the area and proved the empty percentages are high. If this is going on all over NSW, of course it effects availabiltiy for rental or purchase. There should be some form of objection. I know a two storey brand new house in Maroubra, worth well over a million, that has been empty for at least 6 years. Ridiculous!

  20. Neighbours Not Strangers

    May 23, 2017 at 4:51 am

    NSW currently has 58,250 residential homes listed for rent to tourists/visitors from every country (except North Korea, Syria and Iran) via Airbnb/Expedia. There are hundreds of other Internet Platforms in the space offering an unknown number of other homes. These are properties which are no longe available to NSW Residents/Families for rent. The State Government must put aside the profits of MPs who are earning major amounts of money from this practise plus the money being paid to former/present MPs to lobby on behalf of Airbnb/Expedia and see to it that Local Government Authorities are mandated to enforce Planning/Zoning legislation. Residential Housing is for the Housing of Residents. Our Report (9/5/17) to the NSW Government on this issue can be found at: https://www.neighboursnotstrangers.com/single-post/2017/05/09/Give-Us-Your-Homes-The-Rise-and-Rise-of-Short-Term-Letting-in-New-South-Wales

  21. Joanne Seve

    May 23, 2017 at 8:34 am

    My background and area of practice is in State Taxes.
    Housing affordability concerns residential land and its cost of purchase by, or lease to, occupants.
    Demand and supply are critical factors and State Taxes affect demand and supply.
    State Governments should be monitoring and managing this.
    Successive State Governments collecting and reporting on windfalls in State Revenues from State Taxes, without actively adjusting the rates of those taxes to manage impact, is like a beast that is feeding on itself.
    Eventually, there comes a time when the consequences must cause it to stop.
    NSW has not addressed Stamp Duty bracket creep for over 30 years. This has been a contributing cause of housing unaffordability.
    Addressing Stamp Duty bracket creep need not require compensatory measures. Being a transaction tax, reduction in rates of Transfer Duty stimulates turnover maintaining revenue so that it can itself be revenue neutral.
    Annual indexation of the NSW land tax threshold has been inadequate to address the increases in land tax payable by investors, fuelled by exponential growth in land values. Investors are compelled to increase rents which have become unaffordable for many residents.
    State Governments must be more active in their management of State Taxes by regularly reviewing and appropriately adjusting their Stamp Duty and Land Tax rates affecting housing.

  22. Anne Fritz

    Anne Fritz

    May 25, 2017 at 1:49 pm

    Australians are an inventive people – from the stump jump plough to the bionic ear and 3D printed solar cells – but its organisations are terribly conservative.

    When – sixty years ago – my father, who was an award winning inventor in Hungary, and who worked on refining lightweight prefabricated building panels which were used to build whole communities in both Hungary and Israel at that time, came to Australia and proposed to continue his work, the Master Builders Association (or whatever they were called at the time) explained to him that his inventions had no future in Australia because there are regulations as to how much weight of concrete needs to be in every cubic measure of wall. Lightweight concrete could never be used in Australia!

    Even now it is only available as bricks and blocks.

    So – sixty years after Europe had started to make good use of lightweight prefabricated building panels – it may be time for the Australian government to take the initiative and build social housing using components that are economical, lightweight, strong, waterproof and excellent insulators.

  23. Adam Hodge

    May 27, 2017 at 1:28 pm

    Trickle down on supply side. Provide high quality, 3 + bed inner city apartment options in the $2M+ ballpark for retired folks sitting on $3M+houses in Mosman, Balmain etc…. which then gives them comparable downsizing options and unlocks the supply. There was a good story in Domain on a slightly more $$$ version of this – https://www.domain.com.au/news/pyrmont-project-paragon-to-address-the-missing-middle-in-sydneys-apartment-market-20170515-gw55fs/


    May 30, 2017 at 7:48 pm

    The Government want us to believe the only option is to increase supply.We should reduce demand as this is so much easier.Stop foreign investors buying residential property, with accumulated losses generated from negative gearing (including bank interest from loans from offshore banks),very little to no tax is ever required to be paid by our tax system. Also stop negative gearing. Investors will turn to the share market, or invest in a business to run themselves which gives much higher returns. Demand would plummet, house prices would fall back to the good old days affordability level pre- negative gearing. The government keeps concealed the real costs of negative gearing to our country in reduced taxation collected (some historical figures suggest in the tens of billions of dollars per year. we could surely use those funds…….
    Renters would then be able to afford to buy the place they were renting once investors were not allowed to buy.Every house vacant for more than a set period should be sold also.All this and not a cent spent and how much saved, no land cleared or dog boxes built. Everyone lives somewhere and should be able to afford to buy that somewhere.No more houses are needed immediately or urgently.

  25. Jac L

    May 30, 2017 at 10:57 pm

    • Address current capital gains tax and negative gearing laws which favour investors over first home buyers.
    • Restrict foreign ownership and properly enforce/increase penalties for those who cheat the system.
    • Fast rail to open up neglected regional centres to encourage growth and investment outside of the capital cities.
    • Governments should be making significant investments in public transport infrastructure, particularly in densely populated urban areas (i.e the opposite of what NSW is doing with Westconnex)
    • Provide adequate public green spaces in and around areas zoned for medium and high density development, to make this housing choice a healthier one.

    The suggestion to release more green space for development should be well down the list of considerations due to the plethora of issues that urban sprawl brings. Sydney, Melbourne etc. are already too spread out for their population size. Build smarter housing on the existing footprint!

  26. Frustrated

    May 31, 2017 at 8:38 am

    I would like to suggest that one of the things we could do in order to help people enter the housing market, is to invite housing developers to include affordable housing in their plans. One way to do this is to create two independent properties out of one. Double brick between the two properties; independent access and back yards. The home would look like all the others but would have two separate living spaces within its structure. Much smaller, yes, but a roof over someone’s head and an affordable home to buy.

  27. mg_razo


    May 31, 2017 at 10:59 am

    In my view both the government and the community must change their view on affordable housing. There is a negative view on affordable housing, locals believe that the people that come with affordable housing will negatively affect their community; they will bring increased crime and they will put a strain on their natural resources. In addition, locals argue that there quality of life will be negatively affected, schools will become impacted decreasing the quality of education, infrastructure will become deteriorated because of increased traffic.
    In order to change these views the government must create mixed housing. Creating housing that integrates both lower income folks, as well as middle and upper income earners. This will help decrease the negative stereotypes, as well as prevent communities from becoming solely lower-income communities; we do not want to marginalize people because of their income level.
    I also believe that the government must offer greater services. Access to bonds and tax credits to help those that are not able to put a down payment on a home. In addition the government should consider granting developers tax credits, fees are too expensive and developers have to think twice about beginning any construction. Developers want to make a profit and if taxes and fees are too high they will opt-out. The government could also create incentives for millennial housing. Millennials do not want the big back yard, instead they are found to enjoy the communal living; it could help decrease the number of youth experiencing homelessness.

  28. GregBHutchins

    May 31, 2017 at 1:59 pm

    As someone who works in municipal government I can tell you that this issue is one that affects most major cities within the cities I have worked with. In order to work on affordable housing issue there has combined movement with regional governments and local business.

    First, the major issue is dealing with millennials. Millennials typically want to live in larger urban areas given their education level and career aspirations. However, most millennials have a hard time affording these areas. A method I have used focuses on a cooperation policy with developers. Developers will get permission to build “X” amount of housing and in return “X / 10” units must be used for affordable housing. In the larger cities I have worked with this policy has seemed to work.

  29. Denise Cameron

    May 31, 2017 at 5:35 pm

    Perhaps the NSW govt can take a leaf out of Tasmanias HomeShare and StreetsAhead programs. They really help low income earners get into affordable housing.

  30. Melissa Campbell

    May 31, 2017 at 5:37 pm

    Getting rid of stamp duty on first home purchases under a capped (and reasonable) amount would be a good start.

  31. Greg Prentice

    May 31, 2017 at 5:43 pm

    End negative gearing
    No first home buyers assistance for foreign investors.
    % dedication of public housing/affordable rental units per development.
    Impose higher stamp duty for rental properties
    Impose capital gains tax on family home is sold under 7 years ownership.

  32. matt James

    May 31, 2017 at 5:51 pm

    Limit negative gearing to 1 property. If you own more than 1 investment property, you don’t need any more tax breaks.

  33. Robin Varian

    May 31, 2017 at 8:16 pm

    Stop immigration until we can sort out the existing situation (except for temporary refugees, who are later helped to return to their country when peace prevails). Stop foreign ownership of housing, housing development and farmland. Stop negative gearing for more than one investment property.

  34. Charlie Daoud

    June 1, 2017 at 10:11 am

    My name is Charles Daoud, I am a director of a property development and construction company which has been working for almost 30 years. We have a diverse mix of projects from luxury to very affordable and some in between. We have developed and manage a large Affordable Housing property consisting of 72 Dwellings and delivered under the National Rental Affordability Scheme (NRAS). We have existing relationships with community not for profit housing providers across NSW and QLD. We also currently have involvement in the Communities Plus Projects in NSW.

    Within our company, we have been doing a lot of research and general thinking about the affordable housing situation in Sydney (and other cities). Some of the ideas we have considered do involve policy changes and have not been discussed from the literature I have seen.

    In summary we believe the following can contribute to more affordable housing and more sustainability in this sector in the future. I welcome the opportunity to meet with policy advisers to elaborate further on our thoughts. This list is by no means exhaustive.

    1. Require ALL developers developing in the State/Country to have a developer’s license. Part of this is a program/coursework to teach the benefits of sustainable design and the importance of housing affordability in the economy. I would love to have the opportunity to elaborate more on this. I think it would also be welcomed by the community at large who are very wary of developers and often antagonistic towards them.

    2. Reduce/Limit/Remove the ability for real estate agents to charge more than a standard rate for the sale of property and enforce this heavily. A large majority of new property has been sold into investment channels (often overseas buyers) with ridiculous commissions attached. This inflates the price of the housing unnecessarily and also promotes the sale of NEW property approved with the intention of fulfilling housing targets to overseas buyers. The recent federal initiatives to tax vacant property does help this to an extent, but stopping these sort of transactions will go a lot further.

    3. Supply – A lot of the ‘supply’ increases that councils and governments have been pushing for are that they are often in city centres which is great from an infrastructure and amenity stand point. The issue is that the land lots in these city centres are often so small that acquisitions are required to put together a development site able to achieve the merits of any rezoning. This is often difficult/impossible to achieve with a lot of unrealistic vendors. A good example of this in practice is Blacktown City Council – feel free to review their supply policies in the city centre and how many projects have been submitted/built compared to the original intentions.

    Rezoning rural/crown land further afield works for those who are willing to live out there. For young professionals whose jobs are concentrated in the city area, rural land rezoning makes no difference. The strategy for rezoning needs to have a much more pragmatic approach.

    There is still a lot of underutilized government owned land that could be used more efficiently.

    Supply increases alone have NOT improved housing affordability and this is supported by data showing the recent boom in construction was not enough to improve affordability (using the relevant indexes). Supply increases need to be combined with other measures.

    4. GST – The affordable housing problem will be addressed far sooner if the private sector is involved. At the moment, if a private developer develops ‘affordable housing’, they still need to pay GST on a sale (to an investor or other). GST should not be charged/collected by government on what is a basic human right to shelter. This and multiple other taxation reforms are needed and will go a long way to having affordable housing developed (and the 10 year caveat can be increased to 20 or 30 years because the entry price and investment returns are a lot more attractive if GST is not payable).

    5. Contractors – Contractors working on affordable housing projects should have their taxation liabilities reduced for profits on affordable housing projects. This will enable projects to be built with lower costs and make them more viable for private developers and CHP’s alike.

    6. New ownership models – ‘The Great Australian Dream’ is no longer in reach for a lot of families. Exploring new ownership models such as Shared Equity Home Ownership (Equity owned by family and developer/CHP/Government) could go a long way to improving this. A lot of the time, the biggest barrier to entry for ‘key workers’ is the deposit (and stamp duty etc). There are several programs we have worked on that could contribute markedly to increased home ownership and security of tenure. From the studies and surveys we have conducted, this approach will be widely accepted and beneficial.

    7. Bond Aggregation is a great idea – private sector needs to be involved and ownice should be on CHP’s to develop government approved programs to facilitate partnerships with the private sector. CHP’s alone cannot provide enough housing to meet the current crisis.

    8. Tweaks to existing policy at the 3 levels of government (at no net loss to government) could go a long way to improving housing affordability. Would rather explain this in conversational format rather than email.

    I thank you for your time and do hope to be able to elaborate further on the points above. One of our company missions and my own personal goal is to really try and offer a sustainable solution to the housing affordability problem. It is something we are very passionate about.

  35. Nick Guggisberg

    June 1, 2017 at 10:29 am

    I make this comment in my capacity as an individual and not as a representative of Kiama Council.

    In my view, we have all the wrong levers in action in regards to housing policy. All of the levers that are meant to assist individuals and families to afford housing and accommodation, in fact contribute to escalating prices and thus the housing affordability crisis.

    Any mechanism that contributes to peoples capacity to pay will result in pushing prices up. For example Rent Assistance – this just increases the fortnightly amount tenants can afford to pay for rent, thus when applied across a population of people the cumulative effect is to push all rents up. The same also applies to the First Home Owners Grant – this also increases the capacity of buyers to pay more for a property purchase therefore pushes up the cost across the board.

    Negative Gearing – this should only apply to new housing. This lever is meant to help increase supply, but being able to negatively gear an already built house does not contribute any new capacity to housing stock.


    In my humble opinion, any policy or lever that is meant to help address housing affordability should pass one simple test – will it put downward or dampening pressure on housing prices, or will it simply increase someone’s individual capacity to pay more for housing.

    With this in mind I suggest the following;
    – Tax deductions for home owners who rent their properties below market rents (this could be tax neutral or slightly in favour of the claimant or alternatively govt. depending on how it is designed)
    – Negatively gearing only allowed on brand new properties
    – Any rent assistance provided is not provided to the welfare recipient, it is provided to the property owner in the form of a tax concession in lieu of a reduced weekly rent
    – First Home Owners to have the grant replaced with a Tax Concession that the property developer gets to claim if they sell to a First Home Owner at a reduced price (possibly a %’age off the retail price).

    Thank you for the opportunity to comment.

  36. Julia Wright

    June 1, 2017 at 10:30 am

    Stop negative gearing.

    The uk is phasing it out and so should Australia.

    It’s a away of many wealthy people avoiding paying tax on income they earn by hiding begins high tax deductible mortgages.

    Stop the gravy train. Watch how many of these properties come on the market if people have to actually pay for them.

    Extend the people for living in a property to 2 years.l before capital gains exemptions apply. Again stopping the wealthy developer tarting up a place and flogging it for 100’s k more cgt free because they’ve presented to live in for 6 months.

    Seriously this is not new and the government continues to stick its head in the sand, year after year. While sydney is just totally unaffordable for people on payg incomes.


  37. vivi la rock

    June 1, 2017 at 11:05 am

    Housing Affordability is the most pressing issue of our time. In my work in one community over the past 10 years, I’ve seen a rapid change of demographics as families on lower incomes move to the fringes.

    The ripple effect goes on, as people from the big cities move to country areas, forcing prices up so that locals can not afford to live there. For example the growing number of homeless families living in the Showgrounds at Nowra.

    Its a complex problem, but we can look to some overseas examples to assist us.

    1. the compulsory high levy on developers for affordable housing in London

    2. the taxes on overseas residents for buying properties in Copenhagen

    While development is going ahead in leaps and bounds, with local government rendered impotent to intervene, many of those places remain empty.

    How can that be, rmpty units when more people are becoming homeless?

    3. Housing has become a gamblers game – its no longer about shelter – but a waiting game for the prices to rise – for those who can afford it. This needs to end. Housing needs to be for shelter, first and foremost.

    4. Investment properties should not exceed 1, and owners should be residents. Negative gearing should only apply to 1 property – no more.

    5. Money for affordable housing options garnered from levy’s on developers need to provide a range of housing types geared towards people on lower incomes.
    – social housing, the likes of ‘Common Ground’ with mixed levels and social supports.
    – affordable housing in the cities where nurses, police and other service workers can live closer to their work place
    – options for local people to buy apartments at affordable prices

    6. Disproportionate costs of housing reduces the amount of expendable income to spend in other areas of the economy. Reducing the cost of housing will stimulate the economy.

  38. Noor Talukdar

    June 1, 2017 at 12:21 pm

    Respected Authority

    My recommendation is to priorities incentives in an order:-

    – Australian First Home buyer
    – Australian Second home buyer (Extension to big house due to family)

    Incentives for above should be:-
    – no/discount stamp duty,
    – lower interest rates,
    – lower/no Capital Gain tax (more discount on tax),
    – Tax Deduction (Instalment amount) for first home buyers for certain amount in a year.
    – Tax deduction for upgrade to big home with big family for certain amount in a year.
    – Get big corporate (Woolish – COLES – ALDI) to participate & contribute towards society by giving grocery discount
    (ex: Say 5-10% discount for first year of First home buyer loan) in return Government to give some/little tax relief to participating corporate.
    – Incentives to developers for selling more to first home buyers or family upgrade buyers.
    – Keeping a check on developers margin while selling to First home buyers – limiting there margin.
    – Creating Job in Greater Sydney area like Penrith – Campbelltown BEFORE releasing land or creating more suburbs. – so people like to move fast if there existing jobs near home.

    Please limit incentives (or no incentives) and get more tough rates (Land rates, Strata rates, Stamp duty rates & interest rates) for
    – Australian Investors (3 or more homes)
    – Foreign buyers – highest rate in Stamp duty, interest rates, more Capital gain tax.

    To get affordable housing government need to limit/stop Foreign investor to invest within ($0 – $1.5 mil) homes/land. This will throw them out of completion where most Aussie families seek shelter or dream to get a home. Rich foreign investors are always welcome and encourage to invest in big multi-million dollar homes which will be good for economy as well.

  39. Alan Luchetti

    June 1, 2017 at 12:33 pm

    Impose Land Tax equivalent to existing Land Tax plus NG/CGT benefit. Require copy of relevant tax returns.

  40. rpark89

    June 1, 2017 at 3:41 pm

    There is a couple of ways to go about it. IMO we should start building new urban developments all within 30 minute subway access to the city. Yes it is the Australian dream to live in a house with a backyard but this is becoming more and more unachievable to the first home buyer. Therefore building high density developments with urban spaces and public transport links is the key. We can easily mirror what Japan does in its major cities. I would also like to see negative gearing limited to say two properties. This would take a few of the investors out of the market and allow those houses to be bought by an owner occupier. It all comes down to the politicians not willing to act on the matter and not driving good policy which will provide better infrastructure and prosperity to future Australians. Foreign ownership could also be addressed by limiting the amount of units or houses in a development that can be foreign owned. There is no silver bullet but the issue does need to be addressed.

  41. Denise Cameron

    June 4, 2017 at 1:19 pm

    Personally. I think a redefinition of first home buyer should be looked at changing.
    And should maybe be broadened to permit a couple where one who has owned a home but not received any grants before should be able to receive it.
    And to further expand it. Anyone who is buying a home to live in and may have had a home before but never received first home buyers grant as it wasnt around then or due to circumstances like divorce or discharged bankruptcy or having bought a house that lost value during gfc or any other circumstances like those. If youre buying a home to live in and have no other property. Then that should be classed as your first home. Or primary home. Maybe make a primary home loan. Just an idea. I know a lot of people starting out again find it tremendously harder than the original time.

  42. r_w

    June 4, 2017 at 8:18 pm

    Various suggestions

    * Transport corridor planning

    The NSW Government appears to want to squish evermore people into Greater Sydney, and particular, Sydney CBD and the inner suburbs.

    Is this cost effective? Billions are being spent on new roads, and more billions spent on railway tunnels, and now on the rebuilding of a tram system ripped out 56 years ago. The roads and the railways should now be being built on land which was reserved for these purposes. This indicates a failure of planning.

    => Recommendation: Have a look at the planning system. Plan for 100 years into the future, not 10 or 20. Yes, technology will change over that period, but the basic need for people to travel and to transport goods around is unlikely to change much.

    * Update rail transport links to outlying edges of the Greater Sydney area.

    When people think of a place as being “far” away, they think kilometres. But really, the effective distance is really assessed in terms of time, and cost. We have rail links to the north-west of Sydney as far as the Upper Hunter Valley (Scone, Muswellbrook, Singleton area) and south past Wollongong. The Scone to Sydney CBD rail travel time is woeful. There is even a railway line to the vast underpopulated area west of the Blue Mountains, although the rail line hasn’t been significantly changed since the age of steam trains.

    In the previous point, I said that transport would probably change over 100 years, but in the case of the railways, its functionality has been preserved almost perfectly. Yes, rolling stock has been replaced, but its performance is only marginally better than in the steam train days. In fact in some cases today we have slightly slower performance, and a much smaller active network. Investing in rolling stock, track rebuilding and signalling to allow for 160kph train services to the edges and beyond of the greater Sydney area would relieve some of the pressures on demand in the Sydney basin. Trains that will run at 160kph are not “leading edge” technology any more, and is by world standards well-established technology compared to say, France’s TGV or Japanese Bullet trains. Surely this is do-able.

    => Recommendation: Invest in fast rail links beyond the edges of the Sydney basin.

    * Encourage decentralisation with a graduated payroll tax regime.

    The NSW government levies payroll at 5.45% above a threshold (so as to apply to larger businesses and not penalise smaller ones). As I indicated above, concentration of ever more work places in and around the Sydney CBD is imposing very high transport infrastructure costs on all the taxpayers of NSW.

    It would seem fair to recoup some of the extra costs of over-concentration in the central area by levying a substantially higher rate of payroll tax on those in the central area (perhaps 25% of payroll); a lower rate in other areas of Greater Sydney (possibly 10%) and a zero rate in other areas of NSW. (Edge conditions would need to be addressed: the PRT rate could be levied based on postcode at varying rates in intermediate zones).

    Any revenue increase over and above present current payroll tax collections should be hypothecated towards Sydney transport needs or subsidised housing.

    An added bonus is that it would encourage businesses to relocate away from already crowded areas. It should also be levied on government departments as well in order to encourage their relocation as well. If sufficient decentralisation doesn’t occur, then the rate should be increased upwards.

    => adjust payroll tax to encourage decentralisation and recoup transport infrastructure costs.

    Encourage work from home.

    Many or most office jobs do not need full time office facilities in commercial premises.

    The “tradition” of travelling to a separate work place each day is one that only started in the late 1700s with the need for, and localisation of power (need for water/steam power). Prior to this, most “workers” worked on the farm, or lived above the shop. Interestingly, both the President of the USA and Queen Elizabeth are both accommodated at their respective workplaces.

    The changing nature of work, transport, and improved communication facilities mean that for many “paper shuffling” type jobs, two, three or four days per week can be worked from home, or from regional hubs. Managerial resistance (and to a lesser extent poor internet facilities) is behind a slow uptake in this regard.

    => Recommendation: Adjust the payroll tax structure to encourage employers to facilitate the take up of work-from-home. e.g. levy different payroll tax rates on employees who work partly and fully in the office.

    Encourage “fly in-fly-out” workers

    Similar to “fly in-fly out” workers in remote mining areas, it might be possible to encourage “essential service” workers to travel to and stay in Sydney only during the period that they area actively working. This would involve (1) suitable motel style accommodation being provided and (2) work rostering being changed to accommodate this. The workers would not necessarily need to travel by plane – they could travel in by train, bus or car from areas outside the Sydney basin for their block work periods.

    *Minimum/Maximum Planning restrictions

    Reading through the EPI/DCP planning documents drawn up by local Councils which outline what can and can’t be built where, and how big it can be, and what requirements it needs to meet, some restrictive commonalities are evident:

    Land subdivision is specified in terms of MINIMUM lot sizes
    Overall building size is specified in terms of MAXIMUMS (site coverage, height etc.)
    Individual apartment sizes are specified as MINIMUMS

    The minimum flat sizes are justified with pejorative arguments such as “we don’t want dog-boxes in the sky”, and the proponents of these minimum sizes are usually well-off decision makers who seek to impose their values on other people, who may not wish to spend their limited finances on renting or buying space they don’t value highly. These restrictive standards force higher costs onto the less well off.

    The minimum (land) lot sizes seems to date from the early 1900s – the “garden suburb” concept (think Daceyville) where it was believed that houses set apart on their own lot with ample fresh air will ameliorate the poverty of the inner city slums.

    Partly this was based on pollution from wood and coal smoke: this has now been eliminated with technological change. But also, this view was based on a confusion between correlation and causation.

    The inner city slums were caused by underpaid workers and/or casual workers who were on the breadline for most of their life. In addition, weak tenancy laws which didn’t require or encourage maintenance of the properties contributed to the derelict status of the housing stock.

    The “success” of Daceyville was in fact based upon selecting the “better behaved” (i.e. better off) working class persons to relocate rather than the presence of “fresh air”. Yet this dislike of “crowding” still seems lies behind many a council planning scheme.

    There is something of an “edifice” complex amongst councils and town planners – they like garden suburbs, “visually pleasing” houses, and “imaginative” high rise complexes. Also involved is the desire to exclude the underclasses (who they would describe as undesirables or riff-raff) from our “nice” areas. The people in power are making decisions which advantage members of their own class, by means of the planning system..

    I waded through the labyrinthine EPI of one western Sydney council to find that it has 19 different minimum lot sizes in its Environmental Planning Instrument. The smallest lot size is for 400m2 for a land type of “F” (what ever that is). They also have oodles and oodles of other restrictions e.g. frontage width.

    By way of contrast, there is currently for sale a vacant lot of 176m2 which has DA approval for a 3 bedroom house in an inner city suburb. This lot no doubt results from a subdivision made around 150 years ago, when Councils didn’t have modern day “wisdom”.

    If a family can successfully live in the inner city on a lot size of 176m2, why can’t someone in the west of the city do so as well? Do people in western Sydney really breathe more deeply and thus require a greater minimum land area?

    I lived in the Balmain/Rozelle (inner city) area for some years, and was interested to observe the reuse and repurposing of old housing stock. What also struck me were the innovative designs which were adopted as a result of very restrictive lot sizes. It would be beneficial I think for the planners of western Sydney to spend a day walking around this area observing how things can be done better using less space. Although probably over 30 years old by now, what stood out in my mind was a row of modern terrace houses at 129-135 Darling Street Balmain, as an example of terrace housing well done.

    Minimum apartment sizes also deleteriously affect the less well off. A shortage of cheap, very small (e.g. 20m2) apartments means the impecunious may be forced to share with other person/s who they don’t get along with in order to obtain affordable accommodation. (I have in mind the “delights” of living in share houses.) Again, it is the well off dictating how the poorer persons can live.

    If land (and housing) supply is constrained, then surely the planning regulations should encourage best and maximal use of the scarce land resource.

    => Planning regulations should be completely 180 degrees reversed from current planning regulations: Maximum not minimum land sizes; maximum height etc. based on maximum possible utilisation of the lot (subject to neighbourhood amenity of course), and scrapping the minimum apartment size limits.

    Let the market guide what the minimums should be, and don’t tell people how they should spend their money. Minimum apartment sizes are effectively a tax on tenants who don’t want that much space.

    * Front and side set backs

    These are largely a waste of space, are not used, serve only a decorative purpose and cost money to maintain.

    => Abolish mandatory front setbacks for medium density development.

    => In all areas, encourage build to side boundaries i.e. encourage terrace style housing.

    * Green roofs

    => Lot sizes can be reduced further if “outside space” is provided using roof space.

    Green roofs have significant environmental benefits as well.

    As they probably cost a bit more than conventional roof building techniques, the planning rules may need to be adjusted to make them more cost effective to the developer.

    * Value based zoning density

    => If maximum densities planning restrictions are to be maintained, then base them on the underlying land value per apartment (or bedroom) rather than square metres of land.

    If, say, a ratio of say $25,000 per bedroom is decided, then a block of land with a value of say $1,000,000 would be permitted to accommodate a maximum of 40 bedrooms (40×1 bedroom flats, or 20×2 bedders, etc.). Thus permitted development increases with the desire people have to live in the area. Require councils to adjust their plans every 5 years to accord with the changes in land values.

    * Value based land re-zoning

    The opportunity for corruption and windfall profits currently occurs when land is rezoned to a higher density use. But more importantly, if the land value jumps when the zoning density increases, it indicates that there is a shortage of higher density zoned land available in the area.

    => Require councils to re-zone sufficient land so that the jump in land values on rezoning does not occur.

    * Zone and build for the future.

    We seem to zone and build with a time frame of 40-50 years. After that, demolish and rebuild. England, by way of contrast, tends to continue to use, adapts and repurposes old housing stock. By way of example: in the Penrith area, some 40 years ago, 2 and 3 story walk up flats were built near the railway station. In my view, on land so close to a station, 8 story flats should have been constructed. That was 40 years ago, but today the same mistakes are being repeated in the same area but in a different way. A little further from the same railway stations (between 1 and 2 km) areas of stand alone houses have recently been rezoned, and the 1 and a half storey “attic town-houses” are popping up in their place. While this results in an increase in housing density (by about three times), it is really too little for such advantageously positioned land. I should not be surprised that in the next 20 years the walk-up flats will be bulldozed, and in perhaps further 20 years, the now new town-houses will suffer a similar fate.

    => Land zonings to take a long term view e.g. 100 years instead of 20 years.

    * Accommodation for workers at the place of employment.

    Basically, in urban areas, we have commercial, industrial and residential land use zones. Some mixing is allowed between commercial and residential (but not greatly encouraged), however a strict apartheid policy applies between (light) industrial and residential.

    Granted it is not pleasant to live next door to a steel works, or an abattoir, but most of the activities in industrial areas in Sydney involves transporting and storage of goods. Manufacturing as such has largely left Australia for overseas.

    Living away from the place of employment increases the need for governments to spend on transport infrastructure, the need for the employee to incur unnecessary travel costs, and to waste time, as well as experience health disadvantages.


    => Encourage residential flats above commercial use e.g. set a quota for accommodation for 25% of expected workforce. Encouragement can be by way of relaxing planning restrictions e.g. the residential accommodation can be by way of “bonus” floors.

    => Allow and encourage at least one flat dwelling per each development in a light industrial area. Although this may be regarded as sub-standard location, it provides cheap accommodation for those persons considered to “riff-raff” who would “sully” the areas inhabited by the well-off planners and decision makers. Persons considered as “riff-raff” are often those with mental health issues, behavioural problems, less education, poor social support during childhood etc.

    => Provide accommodation for teachers on the school grounds e.g. above existing school buildings if ground space is limited. Most public schools seem to be 1 or 2 storey buildings – it should be possible to add a third “residential” floor. Public schools have a severe ongoing vandalism problem, and this proposal, apart from providing low cost accommodation for teaching staff and reducing travelling requirements, would allow the residents to act as de-facto on-site caretakers.

    => Building a new hospital, fire or police station – why not put a residence on top? I think 50 years ago some public (training) hospitals included dormitory style accommodation for student nurses. Interestingly, some universities today provide a limited amount of on-site motel style accommodation for students.

    * Caravan parks

    => Increase land available for permanent stay caravan parks. This can provide economical accommodation for the less well off.

    => Improve the land tenure arrangements for the occupants of caravan parks – long land leases should be the norm (e.g. 50 years), with regulated contracts and cheap and effective dispute resolution process.

    * Institutional investors in housing: land tax

    The existence of the land tax exemption threshold advantages small investors and discourages large (institutional) investors.

    => Perhaps if a wholesale reform of land tax is not undertaken, then institutional investors could be encouraged with a land tax exemption for “social” housing (or for long term leases).

    * Institutional investors in housing: maintenance

    Institutional investors also face a disadvantage as regards maintenance and management costs vis-a-vis small investors. They need to employ professionals to do these tasks. Mom-and-pop type investors do some or all of these tasks themselves. By not paying commercial rates for all repairs small investors are able to increase their effective return.

    Commercial property (think shops) are usually provided as “shell” leases: the lessee leases the empty space and does their own fit-out. Provided the tenant does not substantially damage the structure of the building, the tenant can adapt the place to how he/she wants. Germany has, at least in part, adopted a similar approach for residential flats: the kitchen in an apartment there most likely comes with a tap sticking out of the wall – the tenant must supply their own kitchen (or purchase it from the previous tenant). The tenant has a long lease, and is allowed to decorate the premises to a much greater extent than allowed to residential tenants in NSW and the tenant is probably responsible for a greater range of repairs. Why is the landlord so relaxed about changes made by the tenant? The landlord does not have to pick up the costs of “making good” alterations or damage done by the tenant after each short term lease expires.

    Apart from giving greater security of tenure, this approach reduces maintenance costs for the landlord. Land tax could be reduced (or ideally) abolished for long leases of residential property (say 20 or even 99) year leases.

    => encourage long term shell leases

    Land tax generally

    There has been much talk in the media of a “broad based land tax”. This is effectively introducing a wealth tax on one asset class. Land already has wealth taxes: council rates, the fixed charge of the water rates, and possibly (depending on the value of land holdings) land tax. Hefty stamp duty is also a form of wealth tax, albeit paid only on transfer and not annually. Bank deposits are “taxed” by inflation; but shares are not, though they incur GCT on sale (as may an investment property). To prevent distortion between asset types, levy a wealth tax on all assets. There need be no linkage between the object taxed and the purposes to which the revenue raised is applied. The wealth tax could be applied to subsidising housing. However, wealth taxes are politically unpopular.

    It should be noted that NSW has/is progressively abolishing stamp duty (transfer tax) on share transfers. Perhaps the abolition of this provision should be looked at, particularly in the light of (1) the fact that land transfers continue to be taxed and (2) the rate on share transfers is/was much lower than the rate on land transfers.

    => look to taxing shares in order to finance public housing

    Stamp Duty

    => The bracket creep needs to be addressed.

    Unfortunately, unlike bracket creep from income tax, relatively few taxpayers pay stamp duty each year, meaning they don’t form a sizeable polity to push for change.

    Age Pension assets test

    There has been community discussion regarding including the age pensioner’s house in the assets test. Politically this is a non-goer. Since the value of the house can change markedly from year to year, and the fact that house valuations are somewhat rubbery, the age pensioner would face uncertainty from year to year as to the amount of their pension income. Houses are not generally incrementally divisible assets – you can’t generally slice off 20% of your land and sell it.

    Less well known is that the pension assets test has a land area restriction of 2 hectares. While this has some exemptions, it is designed so that retired farmers can’t continue to reside on the whole of their (say) 100ha property, not farm it, and claim the pension.

    Perhaps a similar test could be applied to the area of the residence – 60m2 (a reasonable sized 2 bedroom granny flat) or a more generous 80m2 perhaps could be set as a limit. If the provision was grandfathered applying only to new pension recipients, it might encourage downsizing or utilisation of vacant bedrooms. Some exemptions might need to be provided for special circumstances. A similar limit might also be placed on the area of the residential allotment.

    => pension assets test based on house area

    To further encourage the utilisation of vacant bedrooms, income received from renting out bedrooms at a concessional rental amount (say at less than 50%) market rental could be exempt from both pension assets test and income tax. There is a theoretical loss to revenue of this measure, but since the bedrooms are most likely currently unused, no actual loss.

    Measures could be also be adopted to encourage low income accommodation for e.g. students who in return for doing some work for the aged pensioner could live there rent free (or at a low rent). Although there would need to be protections against elder abuse, the problems would not be insurmountable. Governments love licensing regimes.

    These measures, taken as a package could result in better utilisation of existing housing stock at no cost.

    => financial incentives to encourage use of empty bedrooms by pensioners

    Dual key

    A few dual key apartments have now been offered for sale. These can be used as either one flat, or simply by closing the door, as two separate smaller flats. For larger flats, this design should be encouraged (or mandated).

    Given the proliferation of mega McMansions in the suburbs, consideration should also be given to requiring these to be of a dual key design. When the kids move out and just Mum and Dad are left behind, the unused space can be utilised without greatly affecting the amenity of M&D. Or even if one of the kids doesn’t move out, they can have their own private living quarters. Following on from an earlier comment, this taking a longer term view of design objectives – i.e. planning for alternative uses in the future, not just the present.

    => encourage or mandate dual key design for larger properties

    Subdivision of large houses

    Although the “granny flat” provision can be used to subdivide a large house into two flats, in practice the fire safety restrictions (e.g. need to build a firewall) makes this is unviable. Given that a 4 bedroom house may well accommodate more people than say a two flats (1 bedroom + 2 bedroom) the onerous fire safety provisions could perhaps be relaxed.

    => facilitate granny flat conversion of larger houses

    Capital gains tax on part property leases.

    Leasing out part of a private residential property partially removes the “principal place of residence” exemption for capital gains tax. This also applies where a granny flat is built in the back yard. This acts as a disincentive to letting out part of the principal place of residence. The taxation structure could possibly be reviewed in this regard.

    => review CGT disincentives to land and residence utilisation.

    One tenant in two bedrooms

    From my observations, there seems to be a shortage of 1 bedroom flats for rent in western Sydney. The rental price differential between the two is not great, and the tenant may decide to pay a small amount extra for the benefit of having a spare room.

    Planning requirements need to be adjusted so that a proper amount of studio, 1 and 2 bedroom apartments are being built. Currently it is up to the developer to determine the mix. Perhaps some intervention is required.

    The landlord will normally pay the same amount in council and water rates for a 1 or 2 bedroom flat. Again this does not entourage a rental price differential between the two types of accommodation. Perhaps council and water rating structures need to be looked at.

    => increase availability of smaller flats

    Normative standards

    Over the years, the standards of what is a “normal” house or apartment have increased. Partly this is a result of more two-income families, partly improved technology, but mostly a shift in attitudes.

    The environmental movement has been instrumental in shifting attitudes somewhat in relation to consumption expenditure. It is now perceived to be better to recycle something rather than throw it away, better to buy a small economical car than a gas guzzler etc. Perhaps by various public relations strategies attitudes could be shifted in relation to housing stock, not only amongst consumers but amongst planners also (see my earlier point re minimum/maximum planning restrictions).

    => educative campaign that “smaller is better”

    Investment bias: own house vs investment property

    Having a bigger house is encouraged by the capital gains tax exemption for a principal place of residence i.e. if your marginal income tax rates are high, you will be better off investing in buying a larger PPR than by buying either shares or an investment property.

    If CGT reform is on the table, perhaps we could look at adopting the US system of including income gained from sale of the PPR as taxable income. As I understand it, the US system has some differences: a fairly generous property value threshold before tax applies, the ability to “roll-over” the proceeds into a new property (i.e. effectively deferring tax payment until the replacement property is sold) and allowing rates and taxes as an income tax deduction.

    => review CGT incentivise to invest in PPR.

    Housing size

    Immediately after World War 2, there were restrictions placed on the size of a house you were permitted to build. The Housing Commission houses built from the 1950s to the 1970s seemed to have a size of less than 90m2 for a 3 bedroom house. Perhaps the building of large houses should be de-incentivised e.g. by a sliding scale of development fees based on house area, or even basing stamp duty on house area.

    Quotas for affordable housing

    Quotas – the requirement for a developer to provide say for example 20% affordable housing in a development have been touted as a way to increase the supply of affordable housing. These quotas seem to have a time limit – e.g. in 10 or 15 years, the requirement may lapse. Further, the “affordable” rent is set often at a percentage less than full market value – as the full market rental value rises, so will the affordable rent, meaning that the resident may not have certainty of residence.

    However, what is not recognised is that the other 80% of the people buying the “full price” houses, are effectively being taxed to support an affordable housing quota.

    => quotas for affordable housing are a hidden tax.

    Public Housing

    In the 1950s, public housing (e.g. via the NSW Housing Commission) let (or sold) properties to the “working class” and lower “middle class” persons. Over time, the criteria for HC properties was made more stringent due to lack of funding, resulting in a greater proportion of HC properties being inhabited by the “underclass”. This “concentration of problematic tenants” gave public housing a bad name.

    Apart from investing in housing, there are few investments which are reasonably secure and “inflation protected”. Bank deposits and government bonds suffer losses due to inflation, and the share market can be volatile. In the past, a number “unit trusts” (which allowed multiple small investors to own a share of residential or other property) seem to have gone bust, with the directors scampering off with the profits.

    There is potential to attract small investors to contribute to financing residential housing if a quasi-government secure institution was established. Currently governments don’t like to have borrowings “on their books” (often for ideological purposes). Establishing a housing finance institution under government supervision may attract funds from investors who don’t have sufficient funds to purchase an “entire” house themselves, but wish to protect the real value of their funds against inflation.

    => expand and finance public housing with innovative funding arrangements

  43. srobbo78

    June 4, 2017 at 9:44 pm

    Sydney is no longer affordable for professionals wanting to raise a family, let alone those most vulnerable in our community. Incentives to first home buyers and increasing supply in the market do not provide a silver bullet together, or alone. We need a detailed system mapping of the complex issues surrounding housing affordability to understand fully the real drivers of Sydney property prices. We need to build a city for the future, like that of Tokyo, with plenty of public green space and quality housing built around satellite city hubs with access to world leading transport and infrastructure. We need to look at the impact of foreign and speculative investment on housing prices and opportunities for younger buyers to enter the market, possibly through co-operative or dual occupancy solutions. And in all of this, we need to look at how we create job markets for other areas of NSW, so that people who want to live outside of the metropolitan centre can do so.

  44. lawres

    June 5, 2017 at 9:24 am

    The Northern Beaches Council have adopted a Policy which outlines steps to address affordable housing at the local scale. The following measures are proposed:
    • Make it easier for Council’s to mandate the provision of affordable housing targets, as this currently requires inclusion in SEPP70 and/or SICs which is a lengthy process
    • Provide financial incentives for developers of Affordable Housing
    • Help with the promoting the benefits of providing affordable housing
    • Remove legal impediments to the transfer of ownership of affordable rental housing dedicated to Council to a community housing provider
    • Investigate shared home ownership and equity arrangements
    • Implement tax reform to assist in the provision of affordable housing
    • Amend the Affordable Rental Housing SEPP to enable the provision of affordable rental housing in perpetuity to obtain development bonuses (currently at 10 years).

  45. Gordon Hoff

    June 5, 2017 at 9:42 am

    The topic of housing affordability is outside the scope and responsibility of government. There will be many ‘good ideas’ offered to better the lot of one group of people or another. All of them will result in a variety of unintended consequences. Government ought to stay out of the pricing of all private goods – including housing.

  46. Caleb Griffiths

    June 5, 2017 at 9:48 am

    Some suggestions for granny flats: –

    1. Increase maximum floor area to 80m2. This will allow a floor plan to include 2 bedrooms and a reasonable lounge dining area.
    2. Relax the area calculation requirements – at present the calculations are to the outside face of all walls EVEN PARTY WALLS!!! This tends to work against brick veneer, which is rather restrictive.
    3. In the case of modifying an existing residence to achieve a granny flat, the current regulations do not consider the effect of providing a passageway to the front of the property to achieve a decent, dignified entry. If the sole purpose of such a passage and foyer is to provide an access to the main frontage such passageways should be excluded from the area calculation.

  47. Terry Miller

    June 5, 2017 at 9:52 am

    Abolish, or at least severely limit, s.94 levies for secondary dwellings (granny flats) that are complying development.
    The former Manly Council area, now part of Northern Beaches Council, is one of a handful of local government areas where a substantial s.94 levy is charged for a granny flat. In Manly it is $20000. As a result, the construction of complying granny flats in Manly is almost non existent.

    Ironically, the low number of granny flats currently being built means the revenue impact of abolishing the levy should be minimal.

    Most other Council’s (including the rest of Northern Beaches Council area) charge nothing or a modest administration fee

    Secondary dwellings are an inexpensive form of housing, ideal for low income earners.

    The NSW government passed regulations several years ago to designate secondary dwellings below a certain size, and conforming with realistic criteria, as complying development and not requiring a formal development application. This admirable initiative will achieve little in areas such as Manly with a burdensome levy that negates the obvious benefits of building attractive, low cost, small homes in under-utilised suburban backyards.

  48. Jane Rybarz

    June 5, 2017 at 10:00 am

    Accept you may have a long commute if you want to work in Sydney and own a home by moving 1 hour or more out from the city, or buy a Sydney property with a group of friends or investors and rent it out to tenants, or move to a more affordable city. The hardest part is getting that first step on the property ladder. With projected population increases there is no one single easy solution. When interest rates rise again in the future there may be some distressed sales.

  49. Kim Toyer

    June 5, 2017 at 12:19 pm

    Hi I would just like to share my recent experience with trying to get out of the rental circus.
    I live in regional NSW. We lived in a house for 2yrs at $425p/w but with the pacific hwy upgrade and new bridges the real estate told the owners that they would now get $600+ for the property. So like 90% of the local population my family received a notice for vacant possession of the property. We finally, after 3 months of non stop applying for properties got one that we were told was a long term rental at $570p/w. It was 20minutes away so the children had to change schools but after 1 year we were told our lease would not be renewed. Once again we couldn’t find a reasonably priced rental. We heard: No children. No children under 10. No pets. You will not fit in a 3 bedroom house as your kids will need to share a room. Most 4 bedroom properties $500+ but we were wanting to save more money so looking around the $400p/w.. We had being paying our rent as well as putting $300p/w into a savings account each week . We saved about $35,000 we looked into building a house total price coming to about $440,000 loan repayments around $470p/w . We went to the bank who would lend us the money but unfortunately lenders mortgage insurance would not look at us. The bank told us there were several reasons why, but the major one was the fact it was a regional town not the major city. I have been told on several occasions of this happening from other people from all walks of life.

  50. SupervisorJaniceRutherford

    June 6, 2017 at 6:30 am

    My experiences in California could translated into NSW.

    Duplicative inspections and reviews make affordable housing project more expensive than market-rate projects here in California. We should cut the red tape and make it easier and less costly for developers to build affordable housing units.

    In addition, reforming the California Environmental Quality Act would go along way toward making it easier for developers to create more housing stock. CEQA reports can prompt local governments to reduce the size of developments or deny them entirely. CEQA-related delays also give development opponents the ability to continue challenging housing projects after they’ve been approved.

    CEQA reviews can tack two years or more onto a housing project’s timeline, which makes it that much more difficult and expensive for developers to build. The prospect of being required to do a CEQA review may prompt some developers to reduce the scope of housing projects to avoid the state’s strict environmental review process.

    We also need to address the Not In My Back Yard (NIMBY) mentality that often arises to proposed developments. Community outrage can kill a development project before it gets off the ground. Developers and local governments need to do more public outreach to alleviate and address concerns about new housing developments.

  51. Ava Harris

    June 7, 2017 at 9:56 am

    I have concerns with the loss of public housing in the city area, in Millers Point and in the Waterloo area (planned).
    I know most of the residents will be relocated to western Sydney or to areas with access to little services and infrastructure. This in turn will mean that the most disadvantaged people will be even more disadvantages.
    I know from experience that when you have little income it is proximity to services that makes all the difference to peoples lives.

    There is also the social dislocation that these people will experience which will be passed on to the next generation in a vicious cycle of low income and social isolation that will affect a persons wellbeing and in turn have a domino effect on those around them.

    Why not create the most vibrant, connected affordable housing project Australia has ever known in Waterloo? There is the space and a railway station slated to be built I hear?

  52. Jofree Balce

    June 7, 2017 at 2:21 pm

    Many of the suggested solutions to housing unaffordability fall so far short as to be silly. The move to privatise public housing (now renamed social housing) by extorting concessions from developers may help some of the homeless and the lesser paid workers (of whom I see teachers and nurses are now included). But such a ‘welfare’ measure does not address the problem of speculation. Even what are thought to be substantive solutions, such as toughening loan criteria, reducing negative gearing, easing council restrictions on the supply of land, or increasing somewhat the capital gains tax, fall short from being solutions. This still leaves ample room for capital gains.
    However, what such suggestions show us is how far we are prepared to go in seeking a solution to housing unaffordability. They amount to a modest attempt to contain or retard the growth of land prices. (For, to be honest, we are talking not of house prices but land prices.)

  53. tobias

    June 8, 2017 at 12:37 am

    Stop the growth lobbyist from running the country. Outlaw political donations. Slow down record high immigration from 200,000 pa. Job done.

  54. Ken Gutierrez

    June 8, 2017 at 2:59 am

    The issue of affordable housing is a complex issue and demands a multi-pronged approach. First and foremost, we must change our attitude with regard to affordable housing. Communities need to get over their NIMBYism and understand that people who live in “affordable housing” are not a threat, but an asset to their community, both economically and socially. These are the people that teach their kids, respond to their emergencies and interact with them on a daily basis. Governments need to understand the economic power and civic capital that affordable housing brings to their communities, and learn to give affordable housing the same priority as it would a major retailer or employer. Finally, home builders need to understand that affordable housing does not mean cheap; affordable housing must still be decent, sustainable and desirable.
    To that end, here are some specific suggestions:
    • The minimum wage needs to increase
    • Change land use patterns. Density is not a four-letter word!
    o Develop flexible in-fill standards
    o Encourage transforming old commercial centers in neighborhood villages
    o Develop density around transit corridors
    o Be creative!
    • Revisit zoning laws
    o Encourage/require inclusionary zoning or inclusionary upzoning
    o Allow higher densities, wherever appropriate (which is most areas)
    o Add flexibility to encourage creative solutions, including smaller lots, tiny homes, second units, etc.
    • Eliminate obstacles/streamline the permit process
    o Have land zoned and ready to develop
    o Change zoning standards now, before you are asked
    o Streamline the review process
    o Expedited processing (fast track)
    o Meet deadlines
    o Guarantee certainty; No late hits
    o In California, USA, reform the California Environmental Quality Act (CEQA)
    • Provide financial incentives for qualifying projects
    o Waive processing and permit fees
    o Offer land at no or low cost
    o Consider an affordable housing fee on all new development

  55. Peter Sleiman

    June 8, 2017 at 10:08 am


    Thank you for the opportunity to contribute ideas on ways to improve housing affordability in NSW.
    Over the years, I have delivered around 170 residential units to the Sydney market, with a further 358 units either approved or currently in the local government pipeline. My current focus is a 400-unit project at 28-34 Victoria Road, Burwood where there is a genuine opportunity to directly assist those entering the housing market for the first time.

    As part of a planning proposal that considers the appropriate urban design and built form outcome for the site, we propose to:

    1. Introduce a range of practical financial measures that support the entry of first home buyers into the market, including reduced deposit requirement and extended settlement period for a proportion of new dwellings; and
    2. Cap the selling price of a proportion of new dwellings to $650,000 to support access to the NSW Government’s stamp duty exemptions.

    We hope our incentives will be an example for other developers to follow and provide real incentives for first home buyers. We would like to see Councils and the State Government prioritise developments that provide first home buyer incentives.

    Peter Sleiman- VSD Investments

  56. Linda McLennan

    June 8, 2017 at 12:10 pm

    1. Continuation of increasing number of affordable properties available for rent in major cities, especially for low income and key workers

    2. Enforceable inclusionary zoning of a % of affordable housing as per suggestion of Sydney Alliance of 15% on private land & 30% on public land

    3. Increased Job creation in major regional centres, with development of excellent infrastructure, and community

    4. Major incentives to relocate to regional centres

    5. Identification of social housing occupants keen to relocate to regional centres

    6. Provision of many housing ownership initiatives for all, including low income eg shared equity and 50 year loan schemes

    7. Transferring and supporting social housing tenants into home ownership schemes in regional centres, will decrease the number of long term social housing tenants and provide funding returns to government/housing providers, and reduced maintenance spending, enhancing sustainability of housing provision

    8. Development of a ‘Housing Bank Fund’ for all, providing capital for projects, and benefits for contributors, including credits for voluntary workers, carers, and those contributing to their communities. This will also provide incentives and rewards for community participation adding to social cohesiveness.

    Linda McLennan
    Tennant Link Housing

  57. Greta Angel

    June 8, 2017 at 12:11 pm

    Alternative housing solutions

    1. Increase financial support of self managing co-op housing. Far more cost effective than other social housing schemes
    Both for renting and purchasing
    2. Enable-middle/low income people to purchase via Government Schemes. As in a previous Government Program called (need to find) which ran in the 1970-80’s
    A program run via Co-op Building Societies for low-middle income people
    3. Enable self build with Government support programs
    In the UK these programs have been run through Community Housing Providers
    4.Increase interest.for young people/retirees/low income recipients etc to live in areas outside of city centres and city suburbs by
    Increasing new communities and uplifting established outer communities
    5. Increase Public awareness via Forums/workshops/media etc re all the above