SUBMISSIONS RECEIVED FOR PARRRAMATTA AFFORDABLE HOUSING SCHEME
ORGANISATION / SUBMISSION / COMMENTSGreater Western Sydney Property and Development Group
Box 463, PARRAMATTA 2124 / Our Greater Western Sydney Property and Development Group (GWSP&PG) is concerned regarding a number of issues regarding the policy currently on exhibition.
- Assumption that cost be absorbed by the developer is flawed; the cost is passed on and housing is less affordable
- Reports commissioned did not study current alternative methods for affordable housing
3. The effects of this affordable housing policy was not adequately foreshadowed in the new LEP which increased certain property values and therefore no adjustment regarding bonuses was warranted – would seem to conclude that the property owners have not changed in this period or that council has informed all parties at the time of purchase that this policy may be introduced. Failing this, council is penalising a number of property owners / developers. / 3. While the effect of upzoning was foreshadowed in the REP (Strategies) and LEP in residential housing mix, property owners and developers have benefited from upzoning and from the rising value in land prices calculated to be 11.5% per year in the Parramatta LGA.
4. Assumption is that developers are making large profits, while in fact the average are making less profit today. Due to the number of failed or bankrupt developers it is obvious that this group cannot absorb or afford this policy and will then be driven from the market, limiting development & competition in the industry. / 4. The assumption is that the levy will be absorbed over time. The consequence forecast for developers have not happened where a levy has been introduced in other councils areas.
5. Property owners will, in the longer term, have the value of their properties adjusted to encompass this policy if the full amount is not directly passed to the community / purchasers / 5. The statement that the value of properties will adjust to account for the levy is expected to happen.
6. Is the legal platform (State Government SEPP) currently established for Parramatta Council or does this rely on changes to policy by the Minister? / 6. Council is relying on the Minister for Infrastructure, Planning and Natural Resources (DIPNR) to amend the State Environmental Planning Policy (SEPP) 70 to include the Parramatta Affordable Housing Scheme. That is the legal basis for inclusionary zoning.
7. Affordable housing is broken into two parts – rental and sales price of properties. To encourage and maximise the mixture a one policy fits all (ie the Levy) will not achieve results / 7. The focus of the Parramatta Scheme is on providing some affordable housing for rental to those on very low, low and moderate income for the research identified those households in the rental market as being in the highest housing stress.
8. Federal and State Governments should be involved so as to work longer term towards addressing the policies that have created the problem (including the objectives of stamp duty) so as to avoid a knee jerk reaction which will create further problems.
Encourage Council to workshop more alternatives with Land owners, Developers, the Construction Industry & the public so as to adopt a range of measures which will then allow for the best outcome for the community longer term. / 8. Council has sent submissions to State and Federal governments requesting they do more to provide affordable housing in Parramatta.
Council will explore further options for providing affordable housing in Parramatta and supports this proposal from GWSP&DG.
Propose Council and all in the community step up and take responsibility for the solution to the problem of Affordable Housing so
a)Developers / property owners are encouraged to provide affordable housing on an individual development basis by bonuses proportioned to the public’s benefit through negotiation
b) On large areas of land where Council is addressing rezoning to residential, medium density or mixed uses, controls for affordable housing are incorporate into the DCP / a)Council considered Negotiated Agreements for density bonuses or a concession when preparing the Parramatta Affordable Housing Scheme. While Council retained the option for Negotiated Agreements, Council chose Inclusionary Zoning as the first option for providing affordable housing. When an extensive amount of land was up-zoned in the REP and LEP, the consequence for land holders was the increase in the value of their property through the increase in density. The additional development potential was given to the land holder.
The density and form of future residential development was the subject of the preparation of the Parramatta Residential Development Strategy, the LEP and the DCP. These processes included extensive consultation with the community. So for negotiations to vary these standards may be contrary to these processes. To pursue this path, a comprehensive framework would need to be established and agreed to by the wider community.
No formal legal basis currently exists for negotiated agreements. Council is aware of the initiative undertaken by State Government to introduce accountability in a bill before parliament.
b)Council could consider this as an additional consideration in the review of the Residential Development Strategy.option in the future rezoning of land
Centre for Affordable Housing
NSW Department of Housing / The NSW Department of Housing supports the intent of the Draft Parramatta Affordable Housing Scheme (the draft scheme) and is committed to assisting in its further development and implementation. However, the draft scheme only identifies one mechanism, inclusionary zoning, for developing affordable housing in Parramatta. The Department considers that it would be in Council’s interest to incorporate other options into its affordable housing strategy so that it has the flexibility to tailor the strategy to the circumstances of individual developments.
In addition, the Department believes that important amendments need to be made to the draft scheme itself. Our comments relate to several issues in the draft scheme: / Council values the strategic partnership that is being developed with the Department of Housing and in the discussions affordable housing is one strategic area where there is planning for long term cooperation.
While Council’s preferred option was for inclusionary zoning, Council has retained “negotiated agreements” as a second option.
The important amendments refine the draft Parramatta Affordable DCP and state the role and responsibility of the Centre for Affordable Housing and the Office of Community Housing more clearly. Each proposal has been included in the refined document without changing the intention or substance of the draft scheme that has been on public exhibition.
- In the need for affordable housing note that 5,000 households paying more than 30% are in low income households;
- Data from the 2001 Census indicate that approximately 5,000 low income households in private rental accommodation. . . (4.2)
- Clarify that dwellings of under 200 sqm are in multi unit developments;
- Development of the four types described above is not required to contribute to the provision of affordable housing in any of the following circumstances:
- The title for affordable housing dwellings is transferred to the Land and Housing Corporation and managed by the Centre for Affordable Housing or its agent for the purpose of providing affordable housing in the Parramatta LGA;
- The applicant transfers title of the affordable housing unit(s) to the Department of Housing (Land and Housing Corporation) and managed by the Centre for Affordable Housing or its agent for the purpose of providing affordable housing in the Parramatta local government area. (3.2)
- Monetary or in lieu contributions to be sent to the Parramatta Affordable Housing Scheme Account
- Parramatta Affordable Housing Scheme Account in the Centre for Affordable Housing in the Department of Housing. (3.3)
- Funds will be released for the purpose of developing affordable housing;
- Monetary contributions from developers will be paid into the Parramatta Affordable Housing Scheme Account in the Centre for Affordable Housing in the Department of Housing. The Centre for Affordable Housing will use the funds to develop and maintain affordable housing (3.5)
- How affordable housing properties will be managed; and
- Community housing providers will enter into headleases with the Land and Housing Corporation and management agreements with the Centre for Affordable Housing on behalf of the Land and Housing Corporation. (4.1)
- How rents for affordable housing dwellings are set.
- Rents for affordable housing dwellings are fixed at a level that is affordable for tenants and ensures financial sustainability of the affordable housing properties.
Shelter NSW Inc
Suite 2, L 4
377-383 Sussex Street
SYDNEY NSW 2000 / Support Council’s modest and achievable proposal
- 18% decline in availability of low-cost rental cost with a shortage of 150,000 units of low-income rental stock nation wide.
- Good grounds in terms of supply & demand of affordable housing and social equity for measures proposed by Council
- Moderate income earners face severe housing problems
Briggs and Associates
Box 250 West Pennant Hills 2125 acting for
Dyldam Developments Pty Ltd / Fundamentally support the objectives for affordable housing. While properly a state matter recognise the responsibility for planning for affordable housing rests at the local level
- The quantum of the levy at 3% seems excessive having regard to other like levies imposed in other Sydney Metropolitan local government areas. That levy is ordinarily factored against the UCV of land than on a floor area basis:
- The Parramatta affordable housing levy is less than the Willoughby levy of 4% and South Sydney which has an additional 1% on commercial development. The Parramatta Affordable Housing levy is on floor space and not on the UCV (Unimproved Capital Value).
2. As to the equity of application of the levy, this means that the small investor building 2 or 3 multi unit houses is obliged to contribute on the same percentage basis as the national corporation building 200 units. Further; we are not aware of what becomes of the contribution of ‘floor area’ when 3% of the development is less than a residential unit. Is that contribution calculated as a percentage of the UCV? If so, that is inequitable to the developer that is obliged to contribute on a percentage floor area. /
- As the equity is a percentage of the development it is proportional to all developments.
If 3% of the residential floor space area of a development does not provide sufficient floor space for an affordable dwelling (ie. is less 50sq.m), a monetary contribution can be made in lieu of dedicating a dwelling.
Similarly, if the floor space area of dwellings to be dedicated for affordable housing is less than 3% of the total residential floor space area of the development, the difference is to be made up by payment of a monetary contribution. For example, if 3% of the total residential floor space in a development is 130sq.m, a developer may provide 2 x 60sq.m dwellings (ie. 120sq.m) and pay a monetary contribution equivalent to the value of 10sq.m giving a total contribution of 130sq.m (ie. 3%). (Insert in 2.5)
3. The Council’s projections have been based on data that is not current and assumes that development trends and housing demands of recent years continues unchanged; /
- The projections contained in the research commissioned by Council contain the most up to date data for housing and for trends at the time of the report. The housing forecast in the Metro Development Program from DIPNR (formerly PlanningNSW) was released February 2003 and the forecast was for the following five years.
4. As the application of Section 94F(1) of the Environmental Planning and Assessment Act 1979;
(a)Council cannot be satisfied that every development ‘will or is likely to reduce the availability of affordable housing within the area’. In most instances, post-development medium and higher residential densities provide more housing stock at a reduced cost to occupants than the pre-development conditions;
(b) (i)On what basis does the Council say that ‘development will provide new housing with rents that are not affordable for low to moderate income earners in Parramatta’. Putting aside the city wide issue of affordable housing (which we respectfully suggest is a more appropriately a State responsibility), the legislation clearly requires the Council to consider each application on a case by case basis;
(ii) Further, on what basis does the Council say that ‘development’ will remove the older more affordable housing. This will create a need for affordable housing within the area’ We would welcome the opportunity to consider any feasibilities, model or other studies undertaken upon which the Council relies in making these statements;
(c) Council has said that ‘(r)edevelopment is allowed only because of the initial zoning under Parramatta LEP 2001 and Sydney REP No. 28 – Parramatta.’ Having regard to the questions we have raised above and notwithstanding the legislation, we are not satisfied that the re-development of these lands (irrespective of zoning) depletes housing stock or increases the cost of housing. /
- While it is the responsibility of State and Federal Government to provide social housing, local government as a consent authority was given a role in providing affordable housing in Section 94F and 94G of the Environmental Planning and Assessment Act.
- The requirement for the provision of affordable housing has emerged from a state government commitment to achieve greater housing affordability and housing options for households on very low to moderate incomes, which do not qualify for public housing and cannot financially compete for accommodation in the private rental market.
(b) (i) The conditions in Section 94F (a) (b) and (c) requiring land or contributions for affordable housing apply to the Parramatta LGA. When assessing a development application any of the three conditions can be used to justify the levy: when the development reduces the availability of affordable housing, creates a need for affordable housing within the area or the proposed development is allowed only because of the initial zoning or rezoning of a site.
(ii) With the rezoning and the increase in property value within the LGA, older housing that provided affordable rent is being demolished and replaced by new dwellings where the rent is no longer affordable.
(c) The research in the Issues and Options Report examined the housing and rental prices in the four Section 94 areas of the LGA. The increase in prices has reduced the availability of affordable housing for rent or purchase.
5. Has Council undertaken a study of rental markets in the area in terms of occupancy rates and costs? This would appear to be essential first principles data; and /
- The rental analysis was from statistics available in April 2003. To buy a median unit the minimum annual household income required would be $74,000 and to rent a median unit the minimum annual household income required would be $42,100. Moderate household incomes in Parramatta are between $36,688 - $55,032. The median household income in Parramatta LGA is $45,860.
6. The levy is applied to proposed land uses but has inadequate regard for zoning. This potentially means the development of affordable housing away from existing infrastructure when the occupants of that type of housing are most reliant on that infrastructure. /
- Parramatta LGA is $45,860.Where title is transferred; The Council must be satisfied that the nominated units will fulfil the affordable housing principles for Parramatta and will have sought comment from the Office of Community Housing and or selected Community Housing Providers on the suitability of the units. (3.2)