On the block

Affordable housing? In Leichhardt? Surely you jest. Right up there with the Tooth Fairy in the book of implausible fairytales. But although the idea may sound oxymoronic, there are those, such as Labor councillor Darcy Byrne, who are keen to highlight the issue and bring it into the public arena.

As a long-term resident of the area, Cr Byrne is well aware of the upward pressures placed on housing values in the area over the previous three decades. “It’s important to realise there is a severe shortage of affordable housing in the Leichhardt Local Government Area (LGA),” he said. “Leichhardt Labor proposes to establish an affordable housing fund, managed by Council.” The tricky question of funding could be resolved through developer donations, he said, or even via active intervention on the part of Council, buying and renting property.

So far as the Leichhardt LGA is concerned, the key problem is that rents and house prices are at an all-time high, effectively squeezing out the low- and moderate-income battlers who comprised the bulk of Leichhardt’s population for much of its history. According to the Leichhardt Municipal Council Affordable Housing Strategy (2008) draft paper, “The gentrification of Leichhardt has meant that it is increasingly difficult to cater for those on low to moderate incomes. Council recognises the significant impact of the loss of affordable housing on the Municipality, particularly at a time of declining housing affordability.”

If affordable housing looks like other housing and is built to the same standards, what makes it affordable? Simply, affordable housing refers to the rent or purchase price charged rather than the cost of production. Most affordable housing rental projects charge people either a percentage of their income as rent, or offer rents that are lower than market rates. A common rental charge for low-income households is 25 per cent of the household income, but this can change as household income increases, from 25 per cent for very low, to 27% for low, and 30% for moderate incomes. In this way, people’s rents do not exceed common affordability benchmarks.

According to the Department of Housing, the Leichhardt LGA is in the 20-40 per cent affordable private rental zone, while surrounding suburbs Canada Bay and Sydney are in the 0-2 per cent affordable zone, and Ashfield and Marrickville boast 40-60 per cent affordability.

In plain terms, this means that unless you have above-average income, don’t bother trying to rent in Canada Bay or Sydney. Leichhardt is borderline (and worsening), but the others remain more affordable.

But in that case, how is Leichhardt going to be able to supply low-cost housing? For Cr Byrne, the key lies in the NSW Government’s Affordable Housing State Environmental Planning Policy (SEPP). Something of a mouthful, perhaps, but according to Byrne, “the SEPP allows for Local Government to negotiate an affordable housing component in new residential developments…Labor Councillors will seek to have the Leichhardt Council planning controls amended, to require the pursuit of an affordable housing outcome in all medium-density residential and commercial developments.”

The NSW Department of Housing said the SEPP gives local government a way to develop and provide affordable housing. “A number of councils are already involved in some innovative projects involving private and community partners, particularly in metropolitan Sydney,” they noted in a recent paper.

Leichhardt Mayor Jamie Parker is likewise positive about the proposal, but sounded a note of caution when it comes to Council’s remit to act. “We need to get the State Government to give the Council more legislative capacity,” he said.

Currently, of course, the two most significant land use redevelopments about to occur in the LGA are the much-discussed Tigers site on Victoria Road, and the ‘Multiplex’ site on Terry Street, Rozelle (although Multiplex recently sold the site to Anka Property Group). The Development Application for the Tigers site was lodged with Leichhardt Council by Benny Elias’s Rozelle Village Pty Ltd in early September and remains under review. It is not known at present if either of these projects will have an affordable housing component, but Cr Byrne is enthusiastic about possible outcomes. It was now up to Council to ratify its 2008 draft policy and tackle the issue, he said.

by Jeremy Brown