Verona Cinema Redevelopment Raises Questions About ‘Affordable’ Housing

A development proposal for Paddington’s Verona Cinema would see it reopened with new housing and amenities, but questions have been raised about promised ‘affordable’ units.

The Oxford Street venue closed in 2024, and plans for its redevelopment have been in the works since late 2022, following its sale the year prior. The latest $96 million iteration should see it become a seven-storey mixed-use complex, adjoining the block of flats next to it. Envisioned are four movie theatres, a bar, a retail premises, three rooftop pools, 50 parking spots and 44 units. Fourteen of those would be designated as affordable.

In New South Wales, ‘affordable housing’ is that which is either discounted by at least 20 per cent below market rent, or for which rent is capped at 30 per cent of the average household income. Under the Minns Government’s housing reforms, ‘State Significant’ projects are fast-tracked in exchange for a proportion of units being designated as affordable for 15 years. That proportion may vary from 10 to 15 per cent depending on the scale of the proposal.

The City of Sydney objected to the application, with planning director Graham Jahn expressing doubt that any of the units would be available to those on low incomes. “In an inner-city suburb like Paddington, a discount to market rent is unlikely to equal affordable rental housing,” he wrote, also pointing to issues of noise, ventilation and natural lighting for the ‘affordable’ units.

Notion of affordability “hijacked” by developers, says MP

Commenting to the City Hub, Sydney MLA Alex Greenwich skewered the official definition.  “We have to stop the term ‘affordable housing’ from being hijacked by developers who can build higher and wider, offering just a fraction of homes for discounted rent, only to sell them off for massive profits fifteen years later.”

“These homes will do little to fix the housing crisis, because market rent is already out of reach for low-income earners and essential workers in the inner city.”

“To genuinely fix this issue, we should cap affordable housing at 30 per cent of incomes, and these homes must remain as affordable in perpetuity.” Doing so would entail removing one of the two available criteria, which would have a significant impact on what projects are eligible for prioritisation under housing reforms.

City calls for change to official definition 

A spokesperson for the City of Sydney said that it is “concerned” that state policies “do not result in genuine affordable housing in the local area.” 

The spokesperson added that defining affordability relative to the market “will exclude low- and moderate-income households from affordable housing,” or condemn them to housing stress. In the council’s eyes, a household is distressed if it spends 30 per cent of its income on rent.

“For example, under discount to market rents, a single hospitality worker would pay about half their wages in rent. For a single person earning minimum wage, it represents two thirds of their income, while for a single parent working part-time with benefits the rent is equivalent to 100 per cent of their household income.”

Like Greenwich, the City advocates that designated ‘affordable’ housing cost no more than 30 per cent of household income.

Under its own affordable housing program, 4,233 homes have been built, are under development or are in planning. These properties are held by the council in perpetuity.

The Department of Planning, Housing and Infrastructure is expected to arrive at a judgement on the Verona Cinema proposal this year. Developer WT Malouf hopes to commence construction before the end of 2026, to then be completed within three years.

Housing minister Rose Jackson’s office was contacted for comment.