Slow Start For Housing Development Scheme Created To Ease Sydney’s Housing Crisis

A key pillar of the New South Wales Government’s housing policy, allowing for six-storey development within four hundred metres of 37 railway stations, has only netted one development application this year.

Ku-ring-gai Council in Northern Sydney received one application under ‘tier two’ of the government’s Transport Oriented Development Program, whilst other council areas with eligible heavy rail and metro stations in Sydney, Newcastle and Wollongong – including the Inner West Council area – received none.

The application was to amend an existing development approval, increasing the size of a planned five-story development to add an additional two stories and increasing the total number of units from 22 to 38.

The Transport Oriented Development (TOD) zones were gazetted between April and December this year, with zones in the Inner West Council area only being gazetted in December after the council was given several months to develop an alternative plan.

Government says slow start is no problem – council disagrees

Planning Minister Paul Scully expects development to pick up in 2025, noting that housing market reform “normally takes a year or two to take root, particularly in infill areas” such as the identified areas around railway stations.

“Potential proponents will often need to consolidate lots, develop designs and plans prior to their lodgement” of development applications, Scully remarked.

“This takes time, and given the time from when the first areas were declared, it is in line with expectations.”

However, the Inner West Council has pushed back on this core aspect of the state government’s housing policy, stating that its own investigations have determined the TOD initiatives around Marrickville, Dulwich Hill, Ashfield and Croydon stations “lack feasibility”. 

Inner West Council mayor Darcy Byrne stated that the permitted scale of development under the proposal is insufficient to garner investment. 

“It’s become very clear from our commercial viability analysis that, at least in the Inner West, six-storey re-zonings around transport hubs won’t be big enough to actually deliver new housing,” Byrne said.

“With construction costs in Sydney spiralling completely out of control, it’s possible that many of these transport hubs in inner metropolitan areas will require taller and more dense development to secure finance for these projects.”

The council plans to disperse housing development across its jurisdiction, rather than focusing around the four identified stations.

Housing sector in a rut

Dr Laurence Troy, Senior Lecturer in Urbanism at the University of Sydney’s School of Architecture, Design and Planning, suspects that the slow rate of development applications is indicative of the state of the development sector.

“I’d be wanting to question whether these prospective developments are actually stacking up at the minute, given the changes in construction costs, the changes in financing costs, and then ultimately the ability to sell the developments anyway,” Troy told City Hub.

“We’ve been learning for a while that planning approvals have been on the decline, and that’s really about the lack of applications coming in, generally.”

Troy is sceptical that the scheme will alleviate the lack of affordable housing.

“I don’t think it’s actually affordable housing in the end anyway, it’s a bit of a cloak for more market housing, to be honest.”

Other housing scheme yielding more success

The first tier of the government’s Transport Oriented Development Program, focusing on seven existing railway stations and the under-construction metro station in the Bays West precinct, has thus far been more successful, with a major development recently approved on the North Shore.

A $209 million development proposal for 272 flats, including ten affordable housing units, near Crows Nest and St Leonards stations was approved in December.

The stations were identified for “accelerated rezoning”, supported by $520 million in public infrastructure investment.