Sydney’s Housing Strategy Must Change Now 2

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Friday, June 24th, 2016
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The intergenerational report published by the New South Wales government on May 26 laid bare some hard truths about challenges confronting the state’s economy and society going forward.

By 2056, the report says, the state will be home to an extra 3.6 million people and its population will have risen to 11.2 million, whilst migration will be running at 41,000 per annum. To accommodate this, around 1.8 million new homes will needed (roughly 45,000 per year from now until then).

Having risen from 29 in 1976 to 37 in 2016, the median age will have risen further and be sitting at 41, whilst the state will be home to 18,000 residents aged 100 or over – up from just 1,500 now. Now standing at four to one, the ratio of working aged people for every person aged 65 or older will be down to just 2.4. All this will see a $17 billion annual black hole in government finances as revenue growth fails to keep pace with rising healthcare costs.

In terms of what this means from a viewpoint of housing strategy, Urban Taskforce of Australia chief executive officer Chris Johnson says the capacity of governments from a financial perspective to deliver services and infrastructure is going to continue to decline and reliance upon the private sector in terms of delivering not just housing but related services and facilities which support local communities will inevitably grow.

Making this financially viable from the viewpoint of developers, he said, will necessitate not only more mid-high rise dwellings and increased density but also greater use of mixed use precincts which combine housing, retail, healthcare, recreation and other facilities. He says an example can be seen through Central Park in Sydney, which has not only apartment towers but also supermarkets, health care centres, child care centres and parks – all provided by the private sector.

As for current models of detached housing spread over large, low density areas, Johnson says these may have to be maintained in existing areas but will become increasingly difficult to sustain from a local infrastructure perspective. More commonly, he says, suburbs will become denser with more multi-storey buildings, and will increasingly house clusters of older people.

For the most part, Johnson says these arrangements will work well for residents as families enjoy the convenience of mixed use environments with integrated facilities such as healthcare centres, childcare centres and local schools, parks and swimming pools whilst older householders enjoy smaller and easier to maintain residences with hydrothermal pools on the ground floors of apartment complexes and greater proximity to grocery outlets, coffee shops, restaurants and food delivery outlets as well as healthcare facilities.

“I think the end product of all this is that we will see governments say ‘look private sector, can you deliver a whole lot of housing for us that includes the necessary schools, health clinics and parks that the we would have normally delivered (and can you deliver it) at your expense and tell us how much housing and density you need to put in it in order to make all of this work?” Johnson said.

In terms of what should be done now, Johnson says the state needs to look at ways in which it can help ensure the private sector has sufficient capability to deliver on all of this. Implementing less restrictive planning regulations be one measure that would help, he says. It is also imperative that genuinely equitable and workable forms of value capture be found in order to further support infrastructure investment whilst it remains critical to support the move toward medium density housing – a significant area of challenge with many Australians accustomed to a lifestyle of living in detached housing.

Finally, the growth of satellite cities outside of Sydney, Melbourne and Brisbane would help in order to take pressure off the major capitals, he says.

From a slightly different perspective, Planning Institute of Australia (NSW) president Marjorie Ferguson says proactive, evidence-based strategies will be required in order to meet the challenges outlined in the report in terms of the growing and aging population. Population growth, she says, will necessitate not only greater density in an around employment clusters in the inner core but also a focus upon Western Sydney as well. In terms of aging, Ferguson says townhouses could provide a useful option for those wishing to downsize but adds that the cost of land may in some cases make provision for this type of housing difficult to justify from a developer’s point of view.

As for the bigger picture, Ferguson says better coordination in planning is needed across various departments and levels of government. In this regard, the creation of the Greater Sydney Commission and work the Commission is currently undertaking to create district plans is welcome as is a recent federal government announcement of its intention to work with state and local governments within the Greater Western Sydney area to develop a vision for the city’s west and agree on goals, actions and investments required in order to make it happen under a ‘city deals’ model similar to those used in the United Kingdom.

Like other states, Sydney is grappling with a number of challenges with regard to its ability to deliver a sufficient quantity of suitable quality housing going forward.

Whilst progress is being made, more yet remains to be done.

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  1. Peter

    Yah sure let's ease the regulations so that mirvac can make more cash defacing the city… Common.

  2. David Chandler

    Andrew, your article opens up a broader conversation that must now be had. I believe there needs to be some variations to the existing developer model, and I believe that policy makers and planners need to better understand development metrics than seems the case in in many of the forums I observe. There is market failure in housing supply and the answers are not just about the self serving and often glib pleas made by advocacy groups with their member interests at front of mind. I would submit that my article published recently by Sourceable adds another dimension to the sources you have used in this article. The link is below. More than my article I would point readers to the comments made about my article from readers.
    https://sourceable.net/a-case-to-disrupt-the-traditional-developer-multi-unit-housing-delivery-model/