According to a new report commissioned by Teachers Mutual Bank, Firefighters Mutual Bank, and Police Bank, Sydney’s overheated housing market has priced key workers from its inner and middle rings.
Although their jobs are spread out throughout the metropolitan region, the majority of Sydney’s 156,000 teachers, nurses, policemen, firefighters, and ambulance and emergency workers now live in the outer ring areas, as these are the only areas where housing is still affordable for modest income earners.
It means that key workers have to commute long distances every day via public and private transportation. It can negatively impact their work-life balance.
Nicole Gurran, Peter Phibbs, Peter Phibbs, all University of Sydney professors, led the research team that identified five strategies to address this issue. “These [strategies] could make a real difference for key workers and other moderate income earners,” they told The Conversation.
Shared equity is a model that you can incorporate
The median Sydney house costs approximately $900,000. These are the issues that key workers must address when they want to get into the housing market. A key worker can afford $650,000
To make homeownership more widely attainable for this group, the researchers suggest implementing a shared equity model, which would allow key workers to buy up to 75% of the home’s value. This would reduce the deposit requirement to 5-10%, and make it easier to repay loans.
Focus on models that promote collaboration in your development efforts
Collaboration and finance models are an alternative to traditional multi-unit housing developments. These models provide support for individuals as they develop and construct residential projects.
“The group members collaborate to acquire a site, appoint an architect and manage professionals through planning and construction,” the researchers said. “Groups are able to save on developer premiums. They can also customise their building and apartments in ways that save on both capital and recurrent costs.”
Cost-savings can be achieved by negotiating alternative tenure agreements
Alternate tenure agreements like community land trusts are a way to split the cost of dwellings and land. These costs are not retained by the trust/government. This allows you to purchase a home using a conventional mortgage while renting the land at marginal rates.
Housing design and construction cost-savings could help increase supply, provided the savings are passed on to eligible buyers.
Innovative design and construction can reduce costs by as much as 25%-30% This could translate into savings of $75,000 to 100,000.
To raise inclusionary planning goals
Inclusionary planning requires that housing developments be affordable to low- and moderate-income households. You can do this in many ways to provide affordable housing.
“Mandating that 20% of dwellings in all major new housing developments are affordable for moderate income earners, including key workers, could deliver 6,000 to 7,000 affordable ‘start-up’ homes per year in Sydney,” the researchers said.