City of Sydney Eyes Billion Dollar Development, Rejects 1% Increase To Affordable Housing Contributions

The City of Sydney Council has rejected a motion to increase affordable housing contributions while deliberating on the rezoning of two high-rise towers. Each tower redevelopment is estimated to be worth between $1.5 billion and $2 billion.

The proposed affordable housing contributions amount to around 1% of the billion-dollar developments, at $30 million total. 

Councillor Sylvie Ellsmore proposed an amendment to increase the developer contributions for affordable housing from 1% to 2%. However, her proposal was rejected by a “slim majority”. 

Cr Ellsmore criticised the decision to reject increased affordable housing, highlighting the ongoing housing crisis. She argued that the refusal to increase developer contributions only aggravated the affordability problem for Sydney residents. 

“We are in a housing crisis, and we need to drastically increase the supply of public and affordable housing, so that our city doesn’t become only a playground for millionaires”, Cr Ellsmore said. 

“The City of Sydney requires just 3% of a new residential development and 1% of a commercial development for affordable housing projects. The scheme is outdated. Council’s efforts deliver around 60 apartments a year, but this has barely made a dent when you consider how much else is being built”, she added. 

Concerns Grow Over Lack of Affordable Housing 

In January this year, the Productivity Commission’s latest report on government services found that two in five (42.9%) of low-income households renting private homes were in rental stress and at risk of being pushed into homelessness between 2022-2023 despite receiving Commonwealth Rent Assistance (CRA).

According to a Housing Assistance in Australia report by the Australian Institute of Health and Welfare last month, there has been a decline in the proportion of social housing households in Australia, falling from 4.7% of all households in 2013 to 4.1% in 2023.

Key findings from the AIHW found that the majority of households in social housing have been in their tenancies for less than 10 years.

Additionally, the proportion of “greatest need households” on public housing and state owned and managed Indigenous housing (SOMIH) waiting lists has been increasing since 2014.

“When Council moves to rezone land – just as we did on Monday – we create millions of dollars – in some cases hundreds of millions of dollars – in new wealth for developers”, Cr Ellsmore said. 

“At Monday’s meeting, Council voted down even exploring a modest increase of an extra 1% for the Lendlease and Dexus rezonings. It is only right that more of this is captured for the public and directed to building affordable housing”, she added. 

1% Affordable Housing is Not Enough

Cr Ellsmore expressed her disappointment with Sydney’s increasingly unaffordable price tag, and pointed out that the rejected motion failed to address the urgent need for affordable housing solutions. 

Over the past twenty years, only 1% of housing in the Local Government Area has been set aside as protected affordable housing, with public and social housing declining significantly.

Cr Ellsmore noted Paris and London as prime examples of cities that have successfully implemented higher demands on private developers, requiring at least 30% of new developments to be allocated for affordable housing.

“We need to learn from other cities doing much better. Demanding more of private development is a key part of that”, she said. 

“Councillors need to be honest about what isn’t and isn’t working”, Cr Ellsmore added.