According to the Australian Housing and Urban Research Institute, state governments need to make greater efforts in order increase affordable housing supply.
As it turns out, state governments are lacking the initiative to leverage on their planning powers to make an abundant supply of cheap homes a reality – only South Australia was able to extensively roll out inclusionary zoning, vital to establishing affordable housing, according to the Domain Group.
Nicole Gurran, a University of Sydney researcher, said that the current planning system was failing.
“It’s extraordinary, that in Australia’s capital cities, which have some of the most expensive housing in the world, [governments] haven’t rolled out mandatory affordable housing requirements,” Gurran said.
Gurran said that while some studies suggest that increasing the number and accessibility of houses could reduce the price, that would not make the market more affordable.
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The AHURI study compared Australia’s housing market to that of the United Kingdom and the United States. Each market was identified for its planning efforts to increase affordable home creation.
“Our research found that in England and Scotland, the general expectation is for 20 to 40 percent of new housing developments to be affordable housing across the continuum of needs and options,” Guran said.
The UK has built 85,000 affordable housing between 2005 and 2016. South Australia also managed to build 2,009 homes and 1,287 affordable housings.
South Australia’s affordable sector housing accounts for 17% (or 17%) of all new homes. This housing sector accounts for just 1 percent of all new homes in New South Wales between 2009-2017.
Gurran noted that South Australia’s housing market is designed to rent out houses rather than sell them at the market rate. This allows for inclusionary zoning to become more common.
Victoria, New South Wales and New South Wales are the only states that have not implemented a similar system. It launched a pilot program to include zoning only recently.
Victorian Council of Social Service chief executive Emma King said the over 140,000 households in the state are suffering from rental stress – which makes it reasonable to demand the state government to urgently pass an inclusionary zoning scheme.
King stated that, even though Victoria’s pilot program for building 100 social housing units from surplus land was successful, there’s still much work to be done.
“The Victorian government should urgently legislate mandatory inclusionary zoning for affordable housing in multi-unit developments, including a proportion of social housing. In Victoria, there were approximately 30,000 apartment buildings built by private developers between 2016 and 2017. King stated that only a small portion of these apartments would be used for affordable and social housing. This would make it possible for thousands more Victorians, to buy a home.
Urban Taskforce’s chief executive Chris Johnson noted that governments need to be cautious when implementing affordable housing programs.
He stated that developers would lose more money on affordable housing, and the price of homes in the area would go up to compensate. This would result in a substantial drop in both market affordability and sales.
“You want to make sure you don’t kill the goose that lays the golden egg, where you just don’t get enough housing supply happening in the end to fund the affordable housing,” he said.
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