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NSW Draft Housing Strategy 2020

The NSW Department of Planning, Industry and Environment (DPIE) has released its Draft Housing Strategy Discussion Paper which is on public exhibition until 24 July 2020. The comprehensive Discussion Paper outlines a 20-year strategy for Government and Industry with a vision for housing underpinned by four key themes: Supply; Diversity; Affordability; and Resilience.

The Vision: “Housing that supports security, comfort and choice for all people at all stages in their lives, achieved through supply that meets the demand for diverse, affordable and resilient housing and responds to environmental, cultural, social and economic contexts.”

Supply; Diversity; Affordability; and Resilience

It is clear from the outset that the paper aligns strongly with the strategic vision and planning priorities for housing developed by the Greater Sydney Commission (GSC) in the Greater Sydney Region Plan and supporting District Plans. The data relied on in the paper reflects the housing boom of 2014-16 and the subsequent construction hangover and approvals downturn of 2017-19. Its release in the middle of the COVID 19 pandemic presents an interesting perspective and offers food for thought looking ahead to 2021 and beyond.

Important Messages for the Industry:

Housing Supply

Post 2018, housing approvals have dropped, and currently the rate of supply is below the required average estimate of 40,000 per year to meet demand to 2041. The paper acknowledges that there is more to be done to deliver new medium density housing in in-fill areas alongside some measured approaches to high-rise apartments and traditional detached housing “in the right areas”. Concentration of new-housing in those in-fill areas is reiterated as a priority to achieving the 30-minute city for Greater Sydney and this is also reflected in the numbers – with 80% of new housing delivered in in-fill areas over the past 5 years to 2019, the majority of which were apartments (60%).

NSW Draft Housing Strategy 2020

The delivery of new housing in land release areas is cited as being further challenged in the years ahead due to current infrastructure commitments and the limits on available, unconstrained developable lands on the fringes.

As a major land owner across Greater Sydney the State Government and Local Councils are being called-out to contribute more towards addressing housing supply with projects that provide affordable, diverse and resilient housing. Government lands are to be utilised for new precinct-based integrated land use and infrastructure planning, design and development of new affordable and social housing. As per the Greater Sydney Region Plan there are further calls for collaboration between industry partners, government and community housing providers to manage and sustain a housing development pipeline for NSW that provides housing in the right locations at the right time, factoring in economic and social conditions.  

Regional NSW

By 2041, the overall population in the regions is anticipated to grow by only 425,000 and younger people between the ages of 14 to 24 will continue to leave in larger numbers seeking education and employment opportunities in Sydney and the other larger coastal centres. As a result, the Government is targeting more investment in the regions to improve job prospects and liveability. They will spend more money on infrastructure, including in-land rail intermodal hubs and industrial / innovation precincts as well as a Regional Investment Attraction Package to turn around towns in decline. This could support future investment and new residential development projects in the regions in the years to come.

additional homes needed in nsw

Housing Diversity and Resilience

To many in the industry, the themes of housing diversity and resilience are not new and have been consistently presented across Government policy papers since 2016. Housing diversity acknowledges that household structures are changing across NSW with the rise of ‘single-parent’ and ‘couple with no children’ households and the emergence of multi-generational family units. Expect to see local housing controls in Local Environmental Plans (LEPs) and Development Control Plans (DCPs) continue to change in the years ahead as design thinking emerges with dynamic household structures. This is likely to present a raft of new opportunities for developers and hopefully unlock the true potential of the ‘missing middle’.

The discussion around housing resilience centres on improved quality of housing design and construction and avoiding the locating of new dwellings on lands with environmental constraints. As an extension of the Local Strategic Planning Statements and LEP reviews currently being undertaken by the 33 Council’s across Greater Sydney, expect to see an increased legislated focus on:

  • Demonstrating energy and water efficiency in the design of new homes;
  • Heightened attention on identifying riparian, sensitive biodiversity, bushfire, flooding and other environmentally constrained lands, and limitations on housing in these areas;
  • Mandating design considerations for healthy and safe living;
  • Greening - expansive rezoning of lands for parks and regional open space and other mechanisms to combat the urban heat island effect, particularly across Western Sydney; and
  • Certification around design excellence and construction standards.

Affordability

The paper presents a renewed focus around the housing affordability discussion. There is no surprise that more people in Greater Sydney are renting, with many experiencing rental stress – particularly during the current pandemic. Interestingly, both young people (under 30) and those over 55 have been impacted, with substantial drops in home ownership across both brackets and recorded increases in rental stress between 2011-2016.

The supply of social housing over the past two decades has not kept pace with the rate of demand. The number of people living in social housing has dropped since 2004, however, there are currently over 50,000 households on the wait list. Additionally, the rate of homelessness in NSW has increased by over 7,000 households between 2011 and 2016. The paper establishes actions to be developed for Government and Industry to do more in providing social housing and targeted support for combating supply for these most vulnerable communities.

The paper identifies that the Strategy should:

  • Provide additional support for first home buyers – looking at the introduction of “rights of purchase” for first home-buyers in Government-led housing estates or other tenure models;
  • Take a broader review and approach to addressing disadvantage for Indigenous communities under the State Environmental Planning Policy (Aboriginal Land) 2019;
  • Ensure appropriate rights, responsibilities and choice for tenants under further reviews to the Residential Tenancies Act, 2010; and
  • Look at other initiatives to address affordability including new housing models, financial concessions or lease arrangements such as Build to Rent.

Opinion

Government is wanting a greater focus on providing more affordable housing, particularly social housing. Under the District Plans, new residential rezoning projects are to demonstrate provision of a minimum 5-10% affordable housing component. It is anticipated that with the renewed focus on affordability that private sector development proposals will be expected to work harder to meet Government’s objectives.

Summary and Next Steps

For those in the residential development and construction sectors the paper is worth the read. It clearly identifies Government’s current thinking around the future of housing in NSW, it’s challenges and suggested actions for improvement. The paper is on exhibition until 24 July 2020. Following this, DPIE will review community submissions and seek to finalise the strategy and initial action plans in early 2021.

NSW Draft Housing Strategy 2020

We encourage all of our clients and partners to farmiliarise themselves with the vision and four key themes in the paper: A Housing Strategy for NSW - Discussion Paper

Need assistance?

Our team are here to help with all submissions – get in touch:

Urban Planning Team

Allison Smith - Executive Manager, Urban Development

Allison Smith - Executive Manager, Urban Development

Allison is an industry-leading provider of value-generating development services, constantly at the forefront of the rapidly evolving market. Contact Allison

Elise Crameri - Principal Planner

Elise Crameri - Principal Planner

Elise has expertise in all facets of planning, including the drafting of legislation and statutory instruments and the review and interpretation of policy and development control plans, as well as concept and master planning. Contact Elise

Josh Owen - Senior Associate Planner

Josh Owen - Senior Associate Planner

Josh provides expert advice to help landowners derive maximum value from their assets and specialises in scoping, identifying and creating new development projects. Contact Josh