What Price Sydney
Successful cities get the balance of people, business and lifestyle right, but Sydney keeps struggling to nail it because of one fundamental flaw – housing affordability.
It’s no secret Sydney’s housing is in crisis. Only 1% of rental properties are affordable for people on the minimum wage, and the median property price in Sydney is now around $1 million, putting home ownership out of reach for many.
Not only that, a vibrant city relies on people doing essential jobs – in nursing, teaching, police work, hospitality, retail and emergency services, to name just a few. In Sydney, however, most of these indispensable workers can’t afford to live even remotely close to the inner city, let alone in the city centre itself.
And while the rates of apartment construction across the city might suggest that we’re on our way to sorting out housing affordability by increasing supply, the property investment boom, bound up as it is with relentlessly rising property prices, does much to derail such hopes.
The Greater Sydney Commission’s inclusionary zoning plan is tackling the rental problem, at least, by allowing higher densities when developers make 5-10% of the extra floor space available for low-cost rentals that will be managed by social housing providers. Similar strategies have worked in other cities and should work here – but I’m not seeing much talk at all about how to help low- and middle-income earners get a property foothold in inner Sydney.
One simple option would be to extend inclusionary zoning so that it encourages developers to set aside a share of below market price properties for sale. Essential workers could then be given preferential access to these properties, with a mandate that they be resold only to people working in the same types of critical jobs – and when such properties are resold, the original (but time-adjusted) costing formula could be applied, making this segment of the market self-sustaining.
Working out a discounted pricing formula isn’t hard, nor is this a new idea, with schemes already in place in the US and London and plans to implement something similar in Victoria. However, this simple mechanism could have hugely positive social implications for Sydney – including enrichment and revitalisation of our inner suburban and city communities, a measure of wealth redistribution and some stabilisation of long-term asset growth.
Some may ask whether such measures are affordable, but perhaps the better question is whether Sydney can afford not to try.
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