FIVE-POINT PLAN IN GREATER WESTERN AFFORDABLE HOUSING FOR SOCIAL AND Metrostations. Mandatedinclusionary zoning radius1km a within newof M ANDATORY EXCLUSIONARY ZONING: HOUSING REFERENCEGROUP IN COLLABORATIONIN WITH ITS LEADERSHIPDIALOGUE WESTERN SYDNEY WESTERN ACKNOWLEDGEMENT.

The Western Sydney Leadership Dialogue acknowledges Aboriginal and Torres Strait Islander Peoples as the Traditional Custodians of the land and pay our respect to Elders past, present and future. First Nation Peoples have experienced exclusion, discrimination and oppression for too long. The Dialogue endorses Traditional Owners having a place at the table when making decisions about their country.

WESTERNSYDNEY.ORG.AU 2 ABOUT THE DIALOGUE.

The Western Sydney Leadership Dialogue is a not-for-profit, community initiative leading a national conversation about . The Dialogue facilitates interaction between key opinion leaders, across industry, government, academia, and the community, to inform public policy debate and to advance a Western Sydney regional agenda through research, analysis, advocacy & events.

WESTERNSYDNEY.ORG.AU 3 SOCIAL AND AFFORDABLE #1 HOUSING MAINTENANCE: Immediate and expansive investment in widespread maintenance and renovation works on existing social and affordable housing assets.

GOVERNMENT-COMMUNITY SECTOR ASSET TRANSFER: #2 Stimulate asset renewal and a move to scale for the sector, the NSW Government should accelerate the transfer of its Western Sydney public housing stock to the community sector, in contestable tranches.

MANDATORY INCLUSIONARY ZONING AT METRO STATIONS: #3 Transit-oriented developments 1km around new station precincts must strike an appropriate balance between community expectations for the provision of social and affordable housing whilst maintaining a vibrant and profitable development sector.

UNLOCK THE POTENTIAL OF LOCAL ABORIGINAL LAND COUNCILS AS

#4 KEY AFFORDABLE HOUSING POINT PLAN POINT

PROVIDERS: - Increase the utilisation and consideration of Local Aboriginal Land Councils’ assets through planning, partnerships and private investment opportunities with CHPs and developers.

BETTER VISIBILITY OF STRATEGIC #5 DEVELOPMENT & PARTNERSHIP

OPPORTUNITIES: FIVE An open data approach to help promote development and partnership opportunities on underutilised public land.

WESTERNSYDNEY.ORG.AU 4 EXECUTIVE SUMMARY.

The Housing Reference Secure, Stable and Group Suitable Housing for all

In December 2019, the Dialogue Secure, stable and suitable convened the Housing Reference housing for all underpins every Group (HRG), a social and aspect of a community’s affordable housing policy forum viability. Achieving this has made up of Community Housing always been a core policy Providers (CHPs) and financiers, concern in GWS. The is academia, local councils, one of ’s fastest developers, public landholders growing and most culturally and and government agencies. The economically diverse. It is also HRG aims to identify geographically dispersed, shortcomings in existing social spanning , and affordable housing policy, Cumberland, Fairfield, propose and refine alternative Canterbury-, solutions, and generally Liverpool, Campbelltown, advocate for the sector in Penrith, , Camden and GWS. This five-point plan Wollondilly through to the Hills emerges as a distillation of the District, Hawkesbury and the group’s discussions to date. Blue Mountains. Already home to over 2.5 million people and set to expand exponentially in coming decades, fully leveraging the region’s vast potential will demand housing policy that lets no-one slip through the cracks.

WESTERNSYDNEY.ORG.AU 5 Current State of Social and Affordable Housing in GWS As things stand, however, the lack of diverse housing stock in GWS is overwhelming. Currently there are only 46,000 social and affordable housing dwellings available to meet a need for 114,000, a shortfall of more than 67,000 homes¹. At just 40.6% of demand, closing this inexcusable gap will require a minimum of almost 6,500 additional dwellings per year, simply to catch up with forecast needs by 2036. The Dialogue recognises that in the short term, the COVID-19 crisis may significantly curtail the immigration growth that has added to such accumulating housing shortfalls. Regardless of population increases going forward, pressure will continue to build on the social and affordable housing sector, not least via likely declining incomes and increasing , and a subsequent rise in homelessness. With over 14,000 homeless in 2016, GWS rates were already well above state and national norms². The certain compounding devastation of COVID-19 on the region‘s most housing-vulnerable is deeply troubling.

*This data was gathered from Western Sydney Community Forum & Wentworth Housing, Home in Western Sydney April 2019. We note Canterbury Bankstown Data was not available.

WESTERNSYDNEY.ORG.AU 6 The Dialogue’s East London Tour • Preserve the housing sector’s The Dialogue’s 2019 UK Study Tour to employment and economic role in examine city shaping in East London gave GWS, using stimulus spending to a key leadership cohort from GWS an improve public asset value, revenue insider’s view of the historical context and contemporary workings of one of the streams and the daily lives of tenants; world’s most ambitious urban • Clarify and better match the housing regeneration programs: the remaking of market’s ‘supply and demand’ the industrial relics and socially- parameters, particularly in GWS, disadvantaged communities along the incorporating transparency of demand River Thames east of London’s Tower type, location and associated housing Bridge. An area economically, politically amenity/services, not mere dwelling and historically similar to many defining volume; parts of GWS³, the successful renewal • Hasten the transition towards CHP achieved here (and as observed sector management of social housing, elsewhere in the UK) proved that mixed promote the investment profile of tenure dwelling profiles are essential to social and affordable housing and both new housing projects and the facilitate more innovative delivery of rejuvenation of existing mono-tenure projects and client services; estates. The audacious approach in East London included mandated social and • Make better use of existing public land affordable housing targets within a ‘10- and housing resources, and better minute walk’ of Metro catchments; ‘Third understand and meet community Sector’ leaders working directly with needs, to enhance diversity, government to build corporate capacity; emergency responsiveness, creativity, and the transfer of substantial tranches of cultural appropriateness and resilience public housing stock to community sector in housing options; ownership. Such lateral thinking sees the • Make housing affordability a defining region flourishing today, and GWS must ambition and characteristic of the NSW embrace the same ambitious approach. Housing Strategy; and • Build-in principles of sustainability and NSW Housing Strategy 2020 liveability to the policy framework surrounding housing in NSW. The Dialogue expressed this ambition in our submission to the NSW Housing In collaboration with our HRG, the Strategy 2020 Discussion Paper, with 17 Dialogue now distils these grouped specific policy recommendations grouped recommendations further, into five under six broad Principles of Action, targeted, deliverable elements. designed to:

WESTERNSYDNEY.ORG.AU 7 SOCIAL AND AFFORDABLE HOUSING MAINTENANCE:

Immediate investment in widespread maintenance and renovation works on existing social and affordable housing assets.

Australian and international evidence shows a clear link between poor housing and living conditions, and poor physical and mental health outcomes⁴. It is concerning that one in five public housing tenants live in dwellings that do not meet Australian standards⁵. The efficacy of housing as well as health and welfare policy should not be compromised by the poor maintenance of assets. New stock volumes, types and tenure arrangements are vital, but maintenance is important to guarantee quality of life for tenants and to guarantee best utilisation of the existing asset base. Funding of maintenance rejuvenates housing stock, and increases or unlocks land value, shoring up revenue streams and catering to community needs⁶. It also relieves CHPs of managing homes that are falling behind maintenance schedules, allowing them to invest in preventative maintenance, rather than in rebuilding or repair. There is a constant need for rolling maintenance programs to ensure maximum value for money and optimal asset management⁷, however in the current climate this need is particularly amplified. The Dialogue is urging further contributions to social housing maintenance in the upcoming NSW Budget. Investment in social housing has been a proven stimulus measure, with a benefit-cost ratio of 1.3⁸ in the last major stimulus program during the GFC and provides lasting benefit to some of our most vulnerable community members.

#1 Since the GFC, the economic importance of jobs and supply chains in Western Sydney has grown tremendously, and as such, a stimulus measure of this kind would also deliver substantial support to our residential construction sector.

WESTERNSYDNEY.ORG.AU 8 In GWS, this sector generates the most The Dialogue believes that expanding jobs and produces some of the programs of maintenance and region’s highest value-added economic improving the quality of social and activity. Nearly 3,500 additional jobs affordable housing, will not only were added in residential construction improve the lives of those living in between 2013 – 2019⁹. Given that social and affordable housing but also GWS’s most recent housing improve asset values, increase construction boom was driven by investment appetite and regenerate sustained, migration fueled population whole community dynamics. growth, without this growth in the near term, investing in maintenance and renovation of the state’s existing stock of social and affordable housing will provide the most immediate support for construction jobs with demand for new housing in relative decline.

CONSTRUCTION EMPLOYMENT % (2018/19)

Australia* 8.5 Greater Sydney* 8.2 NSW 9.4 Greater Western Sydney 12 Campbelltown 9.9 Liverpool* 7.7 14.5 Cumberland 10.4 Parramatta 11.8 Canterbury Bankstown 11.2 Fairfield 11.3 Blacktown 12.8 Penrith 14.7 Camden 19.8 17.6 Bluemountains* 6.5 Hawkesbury* 11.6

Profile id, ABS 2016 census & National Institute of Economic and Industry Research (NIEIR) ©2019.

WESTERNSYDNEY.ORG.AU 9 GOVERNMENT- COMMUNITY SECTOR ASSET TRANSFER:

To stimulate asset renewal and a move to scale for the sector, the NSW government should accelerate the transfer of its Western Sydney public housing stock to the community sector, in contestable tranches. A powerful push is needed from government to accelerate the growth and commercial maturity of the CHP sector, and to help attract and sustain institutional investment in affordable housing. The implementation of the NSW Housing Strategy is an opportunity to position social and affordable housing in the state as a secure, reliable investment within a stable and principled policy framework. Central to this, the Dialogue strongly supports an increasing influence and expanding role of CHPs in developing and managing social and affordable housing. The extension of selected CHP leases from 5 to 20 years earlier this year, and another successful bond issuance through NHFIC in June 2020, shows a clear acknowledgement within state and federal government that ‘Tier One’ CHPs are up to the task of not only managing the complex needs of tenants, but also leveraging balance sheets to expand supply. Until recently, however, public housing transfer programs have been relatively small in scale and experimental in nature¹⁰. A contestable large-scale transfer of government-owned housing assets to the CHP sector is one bold idea the Dialogue has previously championed to now trigger a step change in the commercial scale of the sector. With a sudden drop in private housing demand and the spectre of a protracted economic downturn, expansion in social and affordable housing supply is becoming critical, and the

#2 CHP sector – predominantly the ‘Tier One’ providers – is well placed to deliver supply in partnership with developers and institutional financiers.

WESTERNSYDNEY.ORG.AU 10 Increasing asset transfers will also achieve a We reiterate our call to stimulate a move to number of other policy objectives, including scale for the CHP sector, recommending revenue maximisation, leverage growth, the NSW Government transfer 30,000 service improvement, tenant public housing properties to the community empowerment, and community place sector, in a combination of management management and renewal¹¹. If this is done and title transfers. This would more than via long-term lease arrangements, it would double the previous Social Housing also be compatible with the state’s very Management Transfer of 13,000 properties. successful asset recycling regime, which has strengthened the Budget position and However if tendered in packages of 3,000 credit rating of the NSW Government. to 5,000 over an 18-month period would be manageable in terms of the sector and government’s administrative capacity. MANDATORY INCLUSIONARY ZONING AT METRO STATIONS:

Transit-oriented developments 1km around station precincts must strike an appropriate balance between community expectations for the provision of social and affordable housing whilst maintaining a vibrant and profitable development sector.

Learning from the Dialogue’s 2019 East London Study Tour, the externalities associated with unaffordability, social housing under-supply and homelessness need to be weighted appropriately in the NSW Government’s approach to inclusionary zoning – referring to the mandated inclusion of a proportion of social and/or affordable housing in new property developments. There has been substantial taxpayer-funded investment in new metro stations on the Sydney Metro South West, West and lines. The Dialogue believes that transit-oriented development around station precincts must strike an appropriate balance between community expectations for the provision of social and affordable housing whilst maintaining a vibrant and profitable development sector. In our most recent property boom, this balance was not realised. Simply put, the Dialogue asserts that the communities that are shaped around taxpayer- funded infrastructure must reflect taxpayer values, not just the profit motive of developers, or the revenue mandate of Treasury. The Dialogue believes there are opportunities to be much more ambitious, particularly in the face of a downturn in new private housing demand. We have previously advocated an inclusionary zoning target of 30% for development within 1km of new Metro stations, in line with successful urban renewal precincts in East London and the NSW LAHC’s goals to ensure large redevelopments target a 70:30 ratio of private to social housing¹². We

#3 acknowledge that 30% is ambitious, given the Greater Sydney Commission inclusionary zoning “target range” is just 5-10%¹³.

WESTERNSYDNEY.ORG.AU 12 Noting the commercial pressures currently facing the development industry, and the risk of imposing an effective tax that might render land undevelopable in the case of Metro-proximate development (1km radius), the Dialogue recommends that the 30% inclusionary zoning include the full range of “affordable” housing typologies (including key worker and student housing, sub-market rental, rent-to-buy, shared equity ownership, etc.) as well as build-to- rent housing.

The state government must take responsibility for delivering a higher proportion of social housing on its own land holdings, and also offer developers both carrots (tax credits and levy exemptions, floor space ratio bonuses, parking space relief, approval fast-tracking, etc.) and sticks (penalties and disincentives for development inertia, time limits to value-add Metro-proximate land holdings, etc.) to incentivise development of sub- market typologies and to help close the subsidy gap that impedes the delivery of new supply.

Ultimately, we believe 30% “affordable” housing in new metro precincts is an ambition worth striving for. Give-and-take will be required from both developers and government to get there. What is non- negotiable is the community’s expectation of a dividend from the infrastructure it funds, and as reflected in responses to the NSW Housing Strategy, it places a high value on affordability and diversity in housing supply.

WESTERNSYDNEY.ORG.AU 13 UNLOCK THE POTENTIAL OF LOCAL ABORIGINAL LAND COUNCILS AS AFFORDABLE HOUSING PROVIDERS:

Increase the utilisation and consideration of local Aboriginal Land Councils’ assets through planning, partnerships and private investment opportunities with CHPs and developers.

Aboriginal Land Councils must have a seat at the table. They can play a vital part in leveraging land holdings to support their members to achieve better housing outcomes and ownership opportunities. Established under the Aboriginal Land Rights Act 1983, with low holding costs and an established legal and membership framework, there is huge potential for ALCs to be serious players in the housing sector. This is a result of their unique ability to shape culturally competent housing, and create more flexible options to build social and affordable housing on their land holdings. The NSW Aboriginal Land Council supports LALCs who wish to use their land for the construction of much needed housing, and that may be suitable for residential subdivision. This year, the NSW Aboriginal Land Council established NSWALC Housing Ltd to increase the portfolio of available housing for Aboriginal people and to improve the management of existing housing stock. This aims to expedite the transfer of Aboriginal Housing Office housing stock to the management of the Aboriginal housing sector¹⁴. This will increase the number of homes available to the

Aboriginal community and improve management. #4

WESTERNSYDNEY.ORG.AU 14 Deerubbin Local Aboriginal Land Council A key risk to progress in this space is the (DLALC) is looking to sharpen the GWS fragmentation of services and governance Aboriginal community’s focus on housing, between levels of government and within education and employment autonomy. Part the Aboriginal and Torres Strait Islander of the DLALC approach is to increase community itself. While bigger scale may not management, maintenance and land holding reflect the diversity and complexity of for social and affordable housing. Their Aboriginal and Torres Strait Islander eagerness to use land for residential communities, better housing outcomes need development, and to expand social and commercial scale to attract the requisite affordable housing and home ownership volume of investment needed. A step change schemes for Aboriginals in GWS, will provide in housing outcomes for Aboriginal and direct benefits for DLALC members and a Torres Strait Islander communities can be range of indirect benefits across the GWS best achieved by aligning services and region¹⁵. programs wherever possible with LALCs, which in NSW are well placed to deliver It is important at the local, state and federal commercial scale with the established legal level to recognise the whole-of-government framework and capital base (land) that can and societal benefits of this expanded role be easily leveraged. for LALCs in housing, and to ensure that zoning and land use decisions do not lock With this in mind, the Dialogue urges all them out of opportunities to achieve levels of government and players across the commercial scale. housing sector to seek out partnerships with LALCs across NSW to foster a commercial The Dialogue also welcomes the $150 million scale that can perpetuate new supply and allocated in the Federal Budget to economic opportunity for Aboriginal and Indigenous Business Australia for new Torres Strait Islander communities. Indigenous Home Ownership construction loans that will help bolster Aboriginal and Torres Strait Islander housing autonomy and security. This is a positive step to supporting Aboriginal housing in GWS, but involving and engaging further with LALCs is vital for the sector to grow. It would be ideal to, wherever possible, support NSWALC and LALCs to utilise their land and collaborate on GWS’s housing needs whilst also creating partnerships with local CHPs.

WESTERNSYDNEY.ORG.AU 15 BETTER VISIBILITY OF STRATEGIC DEVELOPMENT & PARTNERSHIP OPPORTUNITIES:

An open data approach to help promote development and partnership opportunities on underutilised public land.

If it is agreed that government, CHPs, developers and financiers have a shared interest in the expansion of social and affordable housing supply, then open and transparent information around development opportunities is fundamental. This is particularly the case when an explicit priority is to better utilise government-owned land, and when appetite and capacity exists in the housing sector for new supply through established schemes such as the Social and Affordable Housing Fund (SAHF) and via unsolicited proposals. The current asymmetry of information when it comes to such opportunities is an impediment to new supply and innovation in the sector, and can be easily addressed. The Dialogue, in collaboration with Landcom, conducted an audit of GWS land within proximity of transport and local town centres which is suitable for the development of social and affordable housing. The project examined council and other government-owned land in each GWS LGA to gain a high-level snapshot of the opportunities for new development partnerships on under-utilised public land, and the renewal or upscaling of existing housing stock. This project was established on the advice of HRG members and in recognition of how a strong appetite for new housing development is all too often thwarted by poor visibility of opportunity (i.e.

#5 available, suitable land).

WESTERNSYDNEY.ORG.AU 16 It has highlighted that land availability is not always the challenge; that often it is simply awareness of it that is needed to trigger innovative discussion and thinking on what might be possible. The audit revealed a total of 1,620 hectares of developable land across the 10 LGAs of Greater Western Sydney that fit the search criteria. Of course, not every lot will be suited or accepted from a community perspective as a genuine development opportunity. However, the audit, as a broad- brush demonstration project, has been able to provide valuable insight into the scale of unrealised potential across the region.

The Dialogue recommends the NSW government use the HRG’s mapping project as a pilot template to draw councils, state agencies and other institutional landowners into discussion with CHPs, developers, and financiers, coalescing partnerships and collaboration on how best to utilise available government land for future social and affordable housing whether via unsolicited proposals or the SAHF. Another application of this approach might be to aggregate a hypothetical capital base to help inform discussions around the subsidy gap in the development of sub-market housing. We believe we have demonstrated that with access to appropriate data sets and mapping tools, a simple open data approach might be all that is needed to ‘match-make’ between a CHP, an investor with an appetite and eye for opportunity, and the (mostly government) landowners who just lack the visibility, resources or awareness to seek out development partners themselves.

WESTERNSYDNEY.ORG.AU 17 CONCLUSION.

Enabled and encouraged by the Whilst COVID-19 factors must be promising outline of the NSW addressed, long term policies are Housing Strategy, this five-point what is really needed, in a plan is a contribution to a once- holistic response to the wider in-a-lifetime opportunity to housing sector issues raised. This reshape the way we ‘make five-point plan has been ourselves at home’. Although designed as just that in housing is nominally a state consultation with the HRG: a issue, the Dialogue stresses the group of experts in the sector importance of federal policy and with lived, working and invested funding, to improving systemic interest in housing within outcomes and bolstering the Greater Western Sydney, who NSW Housing Strategy’s overall have long understood that social impact. The Dialogue also and affordable housing is not emphasises that, although many only a home for the individual issues have arisen from the and a necessity for the COVID-19 crisis, policy settings community, it is an investment must not be formulated only in towards the future of the entire reaction to the pandemic. region.

WESTERNSYDNEY.ORG.AU 18 HRG MEMBERS & OBSERVERS

ARUP CAMPBELLTOWN CITY COUNCIL CITY OF CANTERBURY-BANKSTOWN DEERUBBIN LALC DELOITTE EVOLVE HOUSING EY FRASERS PROPERTY GENERATION WEST GREATER SYDNEY COMMISSION HUME COMMUNITY HOUSING KIMBERWALLI LANDCOM LENDLEASE NAB NHFIC NSW DEPARTMENT OF PREMIER & CABINET NSW LAND & HOUSING CORPORATION SGCH WENTWORTH COMMUNITY HOUSING WESTERN SYDNEY COMMUNITY FORUM WESTERN SYDNEY LEADERSHIP DIALOGUE WESTERN SYDNEY LOCAL HEALTH DISTRICT WESTERN SYDNEY

WESTERNSYDNEY.ORG.AU 19 ENDNOTES.

1 Wentworth Community Housing and Western Sydney Community Forum, ‘Home in Western Sydney’ (April 2019). 2 Wentworth Community Housing and Western Sydney Community Forum, ‘Home in Western Sydney’ (April 2019). 3 Western Sydney Leadership Dialogue, ‘Western Sydney meets East London’ (2019). 4 Edgar Liu, Chris Martin & Hazel Easthope (2019) ‘Poor Quality housing and low-income households’ Shelter Brief No. 63, City Futures Research Centre, UNSW Built Environment, UNSW Sydney, NSW 20152. 5 Report on Government Services 2020, ‘Chapter 18 Housing – Dwelling condition’, Productivity Commission. 6 Judith Stubbs and Associates, Best Practice in Multi-Tenure Development: Part A: Australian Case Studies (July 2017) p18. 7 Russell Kenley, Maxwell Chiazor, Jon Hall and Christopher Heywood (2010) ‘Good practices for managing Australia’s public and community housing assets’, Australian Housing and Urban Research Institute Final Report No. 148. 8 KPMG (September 2012) ‘Social Housing Initiative Review’ Housing Ministers’ Advisory Committee, p13. 9 National Institute of Economic and Industry Research (NIEIR, 2019) Compiled and presented in economy.id, Breakdown of Greater Western Sydney LGA data by the Western Sydney Leadership Dialogue. 10 Hal Pawson, Vivienne Milligan, Ilan Wiesel and Kathe Hulse (2013) ‘Public housing transfers: past, present and prospective’ Australian Housing and Urban Research Institute, Final Report No. 215. 11 Ibid. 12 NSW Government, Future Directions for Social Housing in NSW, p9. 13 Greater Sydney Commission (Updated March 2018) ‘A metropolis of Three Cities – connecting people’, NSW Government, p. 70. 14 NSWALC Position Statement on Home Ownership for Aboriginal People (June 2019). 15 Deerubbin Local Aboriginal Land Council, 2016-19 Community Land and Business Plan.

WESTERNSYDNEY.ORG.AU 20 FOR FURTHER INFORMATION LUKE TURNER [email protected] KATIE WALKER [email protected]

www.westernsydney.org.au @WSLDialogue

MANDATORY EXCLUSIONARY ZONING: Mandated inclusionary zoning within a 1km radius of new Metro stations.