Government should ignore the self-interested NIMBYs and fix Sydney's affordability crisis: Peter Bentley

Sydney continues to be Australia’s most expensive city in which to rent or buy a home.

Housing affordability has hit a crisis point. In Sydney it now costs 9.2 times the median household income to purchase a home, while 20 years ago it cost five times the median income.

While Melbourne’s median house price is around $529,000, Sydney’s has grown to a whopping $641,000. This has flowed through to the rental market, with the median weekly asking rent for a house in Sydney now at a high of $500, while Melbourne is around $350.

One of the main reasons Sydney’s housing market has hit crisis point is a lack of housing supply.

Over the past five years, Melbourne dwelling approvals totaled 182,026 while Sydney’s lagged behind at 97,884.

In 2010, the total shortfall of housing as estimated by the National Housing Supply Council was 73,700, with projections that this shortfall would continue to grow rapidly, eventually reaching 190,000 by 2020.

The McKell Institute recently made a submission to a New South Wales government discussion paper that will inform the development of a new Sydney Metropolitan Strategy.

In our submission, we exposed that over the last five years only two of Sydney’s 10 regions met their housing targets as set by the previous Metropolitan Strategy. 

This has resulted in a Sydney-wide deficit of over 46,000 homes since 2006, based on the previous Metropolitan Strategy targets.

One of the key reasons for this under-delivery is the increase in narrow minded, self-interested individuals who oppose the building of any new homes in their suburbs.

Not in My Backyard (NIMBY) resistance to new housing is stifling Sydney’s ability to provide the number of homes the city needs and further exacerbating Sydney’s housing affordability crisis. 

The current planning system in New South Wales has placed too much emphasis on mitigating the local impacts of new housing development and less on the state and regional importance of providing homes for people. 

The McKell Institute proposes a detailed action plan to ensure Sydney begins to boost the supply and affordability of homes in Sydney. 

The McKell Institute action plan proposes: 

The return of the Sydney terrace - The proliferation of terrace and semi-detached housing in Sydney will significantly increase density, while providing a form of housing that residents seek. The Institute has identified 41 middle-ring suburbs ripe for a terrace revolution, whereby existing quarter-acre blocks with one home could be knocked down and developed into three new terrace homes. 

Dual occupancies - From the mid 1990s, restrictive policies effectively banned this form of development. The McKell plan would see those restrictions lifted. 

Code-assessable approach to development and binding timeframes – Developments that conform to the relevant statutory plan should be allowed to proceed immediately, and binding timeframes should be in place to prevent lengthy delays for all development proposals. 

One plan to rule them all - The metropolitan strategy should have legal weight and take precedence over the local plans of NIMBY-inclined councils. 

Transport-oriented development - A renewed focus is needed on constructing high-density housing around Sydney’s railways stations and transport hubs. 

In recent years Sydney has failed to deliver the housing people seek at a cost they can afford. 

The McKell Institute’s action plan provides a roadmap to meet the housing needs of the majority, not the self-interests of the few, and allow Sydney to reach its full potential in the years ahead. 

The institute’s full submission can be found here.

Peter Bentley is executive director of the McKell Institute

For more on Sydney's current market and where it is headed, download our free eBook Sydney: Embracing the world of tomorrow.