Affordable Housing in Sydney Australia: Challenges and A Path Forward

Australia is in big trouble.  In fact, a recent report says that Australia is going to be facing an affordable housing crisis for the next 40 years if action is not taken.   Prices are inflated for both rent and homeowners.  Many young people cannot even believe for a second that they will be able to own a home.  This is not just in Sydney and Perth but other medium and smaller sized cities according to the Guardian Newspaper.

More Rental Housing

Many in Australia believe that building rental housing would help relax some of the affordable housing issues.  Like other expensive areas, Australia’s popular cities could stand to do better by increasing the density in building and backing off on various planning techniques that are slowing development.   One article brings out that there is a lobby who believes changing tax policy to move developers to build more rental housing could be another tool for accomplishing development.  Of particular interest, many in Australia believe they need to relax regulation as much as possible to encourage development instead of slowing it down.  It is all about supply and demand.

Supply and Demand, What About the People

Sometimes we get so caught up in talk about density, zoning and regulation that we forget the people being hurt.  An article on the Conversation website brings out that “A new report by the Australian Housing and Urban Research Institute (AHURI) reveals, for the first time, the extent of housing need in Australia. An estimated 1.3 million households are in a state of housing need, whether unable to access market housing or in a position of rental stress. This figure is predicted to rise to 1.7 million by 2025.”  So that is real people being affected by this lack of affordable housing.  If you have ever paid more than 35%-50% of your income to rent, you know how horrible it is not to have savings.  On top of that, there are folks homeless who stand little to no chance of improving their situations.   One idea being floated to improve security is to put a 5-10 year lease into place for tenants.  While I like this idea, I doubt the private market will let that go through.

Federal and State Intervention Needed while Private Sector Builds:

Australia will need to get large amounts of investment put into place from the fed and state government if they have a hope of dealing with this problem.  There are different tools in a city’s toolkit for leveraging the private market to develop affordable housing but we know that it takes massive state intervention.  The private market is not the right place to expect affordable housing strategy to be deployed.  However; lets not forget how important a role the private market plays.  For example, a city that is removing barriers to development can ensure that the market does not get to tight.  That can ensure there is good mobility in the rental market which allows the older complexes without amenities to stay a little more reasonable in price.  That will not solve the greater issues but it is a piece of the pie. The federal and state governments will need to invest billions of dollars to try catching up to this crisis.


One item of note is that many social housing units in Australia are sitting empty because the right size of family is not available.  Many countries are seeing smaller family sizes and this is hurting social housing organizations because of vacancy days.  Considering a massive renovation project to right size these units and activate parts of the stock that are sitting dead. 

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