Woollahra Council On Track To Adopt Affordable Housing Requirements

The Woollahra Municipal Council has moved towards adopting affordable housing requirements for new builds.

The Affordable Housing Contributions Scheme would be phased in over five years, with contribution requirements to increase over that time. The mandate would vary between wards and zoning classifications, and developers would have the choice of paying a levy to finance affordable housing elsewhere.

After five years, the scheme would require from 2.5 to 10 per cent of residential floor space be dedicated to affordable housing in perpetuity. By comparison, the Minns Government’s Affordable Housing Bonus only requires units to be discounted below the market rate for 15 years.

The proposal was endorsed by the council’s Environmental Planning Committee on 2 March, with seven for and one against. Julian Parmegiani broke with his Liberal colleagues to argue that it would increase construction costs, and would least impact prolific luxury housing developments, hence backfiring on its goal.

On 5 February, the Local Planning Panel gave its unanimous support. The next step is for the scheme to be endorsed by the council at large, after which it will be sent to the Department of Planning, Housing and Infrastructure and then on to public exhibition.

More ambitious than comparable schemes

Similar affordable housing contributions schemes exist in adjacent municipalities. The first in New South Wales was introduced in 1996 by the City of Sydney, which now boasts “a sizeable stock of affordable rental housing,” says a Woollahra Council document.

The City of Randwick inaugurated its own in 2020, following the opening of its light rail line. Waverley introduced one in 2023.

These schemes are less ambitious than that drawn up by Woollahra Council staff. The contributions they mandate range from one to five per cent of floor space, or in-lieu financial contribution.

Residents’ groups divided

The Paddington-Darlinghurst Community Group believes that the draft policy “is heading in the right direction,” said convenor Will Mrongovius.

He emphasised the importance of how ‘affordable’ housing is defined, calling the New South Wales definition a “developer’s dream” — alongside some colourful language.

“The Government’s Affordable Housing Bonus grants 30 per cent additional height and floor space, but requires only 15 per cent affordable housing at a 20 per cent rental discount for 15 years.”

“We support a definition of affordable housing which ensures that new affordable housing is genuinely affordable: rent capped at 30 per cent of household income, retained in perpetuity.”

The Rose Bay Residents Action Group took a different stance. It told the City Hub it does not consider the proposed scheme “to be a practical or effective way” of achieving affordable housing in Rose Bay and Double Bay.

“In high-value coastal markets, contribution-based density uplift is more likely to boost project viability than produce affordable homes.”

“These settings may also attract speculative or capital-preservation investment — including from offshore institutional or private investors — whose priority is asset security and financial return rather than long-term affordability outcomes.”

“There is no clear or transparent framework for monitoring compliance or ensuring that affordability commitments are actually delivered over time,” the group said. “At the same time, existing entry-level apartments and town-houses are being demolished and replaced with larger premium dwellings, raising legitimate concern that the net effect may be reduced affordability.”

It argued that, for the council to improve housing affordability, “policy settings should first address threshold planning issues, such as site suitability and the risks associated with large-scale basement excavation in areas of shallow groundwater and known geotechnical sensitivity.”

“Without resolving these fundamental constraints, contribution schemes alone are unlikely to deliver meaningful affordability outcomes, and may instead facilitate development outcomes that primarily benefit project proponents.”

About 104,000 Sydneysiders left for elsewhere in Australia last financial year, the cost of housing being a major factor.