Affordable Housing Discussion Paper of Australia

Introduction:

Affordable Housing is a critical issue in the City of Parramatta and across Sydney’s overheated property market. The Reserve Bank recently confirmed that Sydney housing prices have surged 18.9% in the year to March 2017. At her first press conference in January, the incoming NSW Premier Gladys Berejiklian declared it “the biggest issue people have across the state.” Independent polling confirms this.

The average price of a house in Greater Sydney is now $1.124 million, and the average unit price is $711,256. Recent international research confirms that Sydney now has the second least affordable housing in the world, and many low and moderate income households, first home buyers and vulnerable people are locked out of the housing market. City of Parramatta is Sydney’s central city, the demographic and geographic heart of the Sydney region, and the centre of the expanding Greater Western Sydney region. In 2016, Parramatta was home to over 230,000 people, and the population is set to grow to nearly 400,000 over the next two decades to 2036. Public and private investment is driving growth and change in the City of Parramatta, including rising property prices.

Defining Housing Affordability, Housing Stress And Affordable Housing:

This chapter defines the key terms associated with affordable housing and housing affordability. It is critical to define these terms for the following reasons:

1. Negative media and public opinion about affordable housing in the past has centred on a misunderstanding of what it is and an assumption that it is only for the most severely disadvantaged community members.

2. Due to its legislative limitations and mandates, Local Government is best positioned to contribute to particular types of affordable housing, but not others.

Housing Affordability:

Housing affordability is“…the relationship between housing costs (prices, mortgage payments or rents) and household incomes.”

Housing Stress:

Housing stress occurs when households have to pay an unacceptable share of their income towards housing, either as rent or mortgage payment. The high cost of housing means many households are unable to meet basic living costs. Housing stress generally occurs when a household is paying more than 30% of their income in housing costs and is also in the bottom 40% of household incomes in a given city.

Affordable Housing:

Affordable housing is any housing that is appropriate for the needs of a range of very low to moderate income households and priced so that these households are also able to meet other basic living costs such as food, clothing, transport, medical care and education. Generally, housing is considered affordable if it costs less than 30% of gross household income.

Who Benefits From Affordable Housing?

Affordable housing addresses the issue of housing stress for individuals and families on low to moderate incomes. Affordable rental housing is typically managed by Community Housing Providers (CHPs) and provided to eligible community members. The eligibility requirements for affordable rental housing vary depending on its specific purpose and who it is targeting. Some eligibility criteria used across different affordable housing providers enable provision of affordable housing to:

• Key workers, e.g. nurses, cleaners or school teachers.

• Low to moderate income earners, i.e. households whose income level is between 50 and 120% of the median Sydney income level.

• Households who are experiencing housing stress.

• People at risk of being displaced from their communities, e.g. have resided or worked in the area for a minimum number of years.

Acting Now To Support Future Communities:

This significant growth is supported by an expansive plan for the City of Parramatta and a recognition of its strategic importance to the future of Sydney. The Greater Sydney Commission’s vision for the Greater Parramatta and Olympic Peninsula (GPOP) highlights the opportunity currently at hand.

Conclusion:

Based on the options considered in this paper, Council proposes to do the following in order to address the issue of housing affordability for the residents of City of Parramatta. Applying these strategies will allow City of Parramatta to realize the affordable rental housing target.

• Increasing supply of affordable rental housing for people in the City of Parramatta on low to moderate incomes.

• Working toward an affordable rental housing target of 9,500 dwellings to be delivered between now and 2036.

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