Affordable housing has never been more needed in Australia’s most expensive city, but a range of apartments designated for lower income earners has left prospective tenants shocked at the high cost – even at a discounted price.
Luxury apartments in Bondi complete with marble bench tops, Miele appliances and terrazzo floors are available for as much as $1150 per week for a two bedroom unit, and $775 for a one bedder – and that's with the required 20 per cent discount.
To be eligible to apply, tenants must meet certain income limits as outlined in the NSW Affordable Housing Ministerial Guidelines.
While the guidelines state that “housing is usually considered affordable if it costs less than 30 per cent of gross household income”, the income limits and rental prices would see tenants giving up 50 to 60 per cent of their weekly wages to keep a roof over their heads.
'Affordable for who?'
Despite being classed as ‘affordable’, the calculations have one Sydney councillor questioning, “affordable for who?”.
Woollahra Liberal councillor Sean Carmichael said the eastern suburbs were “simply too expensive” for the affordable housing scheme to work.
“NSW affordable housing policy seems to be working in some parts of Sydney, but honestly it doesn’t work in the eastern suburbs,” he told Yahoo News Australia. “Housing is simply too expensive here for 25 per cent rental discounts to make a meaningful difference for those on low incomes.
“Case in point in Bondi Junction. Obviously young people on low incomes aren’t demanding Gaggenau and Miele appliances from government; they literally just want to afford a roof over their heads.”
In June, NSW Premier Chris Minns announced housing developments valued over $75 million would be granted a 30 per cent extension on height and floor space if they allocated a minimum of 15 per cent of the project to affordable housing.
But Cr Carmichael believes it just won’t work in the more affluent areas of Sydney.
How many homeless people or those in poverty and rental stress have $4000 bond and $1000 a week rent for so-called "affordable housing"?
Build public housing. Publicly owned and publicly administered.
Stop lying to people about what #HAFF is, Labor. #auspol @helenhainesindi pic.twitter.com/uywXTi0oQG
— Don't know? Find out and #VotesYes. (@Jansant) August 4, 2023
“Asking developers to include affordable housing units in new buildings in the Eastern Suburbs isn’t going to work when all new builds out here will inevitably be described and priced as ‘luxury’,” he said.
“That is regardless of any height or floor space ratio dispensation being given to them by the state. To maximise their returns, developers are still going to want to produce developments that are modern, sleek and stylish and fit the lifestyle of Bondi or Edgecliff. Offering them more height and floor space doesn’t change that basic equation, it just means we get ridiculously priced rentals that, after discount, are still more expensive than so much existing comparable stock.”
He also offered a suggestion of an alternate solution that he believes would work better.
“The best way to increase affordable housing stock is to still ask developers to pay the affordable housing fee instead of supplying supposedly affordable units within new developments, and for councils to pool that money over time to buy older blocks of flats with basic but comfortable offers, and to rent those out at the discount rate,” he said.
“That should yield much better result."
Department responds to expensive rentals
Minister for Housing and Homelessness Rose Jackson has recently approved the new Affordable Housing Guidelines for 2023-24, where a minimum 20 per cent discount from market rent is required. But a spokesperson for the Department of Communities and Justice told Yahoo News it is looking into new ways to calculate rent in affordable housing units.
"It is recognised calculating affordable housing in this way is becoming increasingly untenable as rents accelerate in advance of average weekly earnings," the spokesperson said. "The NSW Government is currently assessing options to a more sensible approach to calculating affordable housing rents.
"This goes hand in hand with the NSW Government’s plans to increase the supply of social and affordable housing in NSW. Not For Profit Community Housing Providers often apply a rent discount more than 25% to properties they own and manage."
When provided with examples of rentals in the eastern suburbs, the Department said the one bedroom unit available for $775 "is actually a discount to market rent of almost 30 per cent".
"While the goal of the NSW Government is to ensure that very low and low income households do not pay more that 25-30 per cent of their gross income in rent, greater flexibility can be applied to moderate income households. This recognises the particular challenges of renting affordable housing in high value locations," the spokesperson said.
"Access to affordable housing is determined by income eligibility brackets and household size. A couple earning up to $107,400 combined will still be eligible for affordable housing assistance under the NSW Government’s guidelines.
"Using the example of the property above, if a couple were to rent this apartment for $775 per week, they would pay 37% of their income in rent as opposed to 53% of their income if the property were rented at market rent of $1100."
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