Academic journal article The Town Planning Review

The Affordable Housing Conundrum: Shifting Policy Approaches in Australia

Academic journal article The Town Planning Review

The Affordable Housing Conundrum: Shifting Policy Approaches in Australia

Article excerpt

Maintenance of affordable housing supply in Australia has, like many developed countries, been an ongoing challenge to government. The three levels of government in Australia - Commonwealth (national), state and local - have, to varying degrees and with mixed success over time, sought to implement a range of policies to maintain existing and provide new, affordable housing stock. Affordable housing is defined here as privately provided low-cost rental housing, and is often considered in conjunction with social housing, that is, public rental housing. The State of New South Wales (NSW) is of particular interest - and the focus of this paper - as its capital, Sydney, is the largest Australian city and experiences the most acute housing affordability problem (SSCHAA, 2008; Haylen, 2014). Over time the public policy measures adopted to assist affordable housing provision have experienced a noticeable shift across the spectrum of potential government planning and financial intervention approaches. Successive affordable housing schemes have covered a range of approaches: (1) mandatory or compulsory, (2) voluntary or negotiated and (3) planning and financial incentives (see Figure 1). In NSW the first compulsory approach involved the application of traditional 'command regulation' in the form of a mandatory inclusionary zoning mechanism, to exact an affordable housing contribution from developers. Effectively, this mechanism was a betterment tax to capture part of the unearned increment accruing from planning uplift (that is, the increase in the value of land arising from a change of planning and development controls that allow more intensive uses). Utilisation of this land value capture planning tool was jeopardised following a successful legal challenge by a large residential property developer, with issues of property rights, regulatory takings and compensation central to the court's decision.

Bowing to developer pressure, the use of inclusionary zoning to provide affordable housing was curtailed, to be largely replaced by a 'planning negotiation' model. Termed 'voluntary planning agreements', and based on the British model of negotiating or bargaining for planning gain, this approach was not embraced by developers and was soon superseded by an 'incentives' model of planning bonuses and deregulation and financial inducements funded by both the NSW State and Commonwealth governments to encourage affordable and social housing provision by developers. Crucial to this incentives-based approach was the establishment of the National Rental Affordability Scheme in 2008 and a spike in Commonwealth government funding of affordable and social housing which occurred in 2009-2012 with the commencement in late 2008 of the AU$5.6 billion Nation Building-Economic Stimulus Plan (NBESP) Social Housing Initiative. Commonwealth funding available under the NBESP is now exhausted however, and funding has returned to the much lower pre-2009 levels (SCRGSP, 2014).

Pertinently in NSW, further changes to affordable housing delivery were considered by a State Government-appointed Affordable Housing Taskforce, created in May 2011. Deliberations by the Taskforce were subsumed and overtaken by a broader review and reform of the NSW statutory planning system which began in July 2011. A new Planning Bill - the product of this reform process - was introduced into the NSW Parliament late in 2013, but stalled following amendments to the bill by the NSW Upper House, the Legislative Council. These amendments, which were not supported by the NSW Government, included, significantly, the insertion of new discretionary affordable housing development contributions into the proposed planning legislation. With the Planning Bill lapsing in September 2014, these delays resulted in a lengthy hiatus in extending existing, and developing new, policy responses for affordable housing provision in NSW.

At a practical level, the evolution in the approaches embedded in affordable housing schemes - initially compulsion, thence negotiation and finally incentives - demonstrates the growing power of developer interests and property rights in directing government housing policy. …

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