Randwick boarding houses could be developer’s dream

BY JORDAN FERMANIS

Boarding houses have traditionally been a refuge of the needy. inner city dwellings that allow people with low incomes access to living in the city.

However developing boarding houses has become a new avenue to reap the rewards of an inflated property market. In a Randwick City Council meeting on Tuesday 24th May statistics were provided to council that indicated a 400% increase in boarding house development in the last few years, with 30 DAs approved for boarding houses in 2015.

Boarding houses are developed under the State Environmental Planning Policy (SEPP) which is designed to increase affordable housing in NSW. A spokesperson from the Department of Planning and Environment said that:

“The State Environmental Planning (Affordable Rental Housing) Policy 2009 sets construction standards for boarding houses including room size, car parking and open space. It also requires the design to be compatible with the character of the local area.

The role of the policy is to support the delivery of affordable rental housing. The rents are set by the boarding house owner.”

Dr Chris Martin of the City Futures Research Centre at UNSW says that the new boarding houses that are being developed under the SEPP are encouraged by the State government at the expense of other areas.

“SEPP tries to set some minimum standards and then it stops councils setting higher standards in other regards. It’s supposed to encourage a certain type of boarding house known as a ‘new generation boarding house.’ I’m assuming these Randwick applications are these which the state government has been trying to encourage,” Dr. Martin said.

In a rental market that is becoming more and more expensive, allowing boarding house owners to set their own rent sounds a lot more like apartments and less like a boarding house.

Dr Martin says there is no mechanism in place to ensure that boarding house owners keep rent at a fair price for tenants.

“There’s not actually anything in those requirements that says the premises have to let at a certain amount or have to be affordable for a certain person. It’s an assumption that this sort of accomodation will address a need in the market.”

“Some of them aren’t very cheap to rent. The way the government’s gone about setting these standards and restricting what council may or may not do is that its in the name of affordability,” Dr Martin said.

In Randwick City Council’s Housing Affordability Strategy of 2007 boarding houses are said to be in decline, where “returns have been insufficient to sustain continued interest in this form of housing.”

The SEPP was introduced in 2009 and since then ‘boarding houses’ have sprung up all over Sydney, Randwick council being only one of the examples.

According to statistics presented to council on the 24th May there are 71 boarding houses in Randwick City Council as of 2nd May 2016. Hometrack Australia estimates that the median price for a rental property in Randwick City Council is $875 a week, $455 higher than the median house rental for NSW.

With rental prices continuing to increase it is unlikely boarding houses will be able to house the people they are designed for under the SEPP. The continued development of ‘new generation boarding houses’ plays right into the hands of developers.