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The announcement by NSW Labor to demand 15-25% of housing in new housing developments be affordable has been slammed by campaign groups.
Urban Taskforce believes plans to mandate housing affordability targets will make most housing projects unviable.
Under the plans every residential development planned for state-owned land would have 25% of its dwellings designated affordable housing. For private land rezoned for development this would be 15%.
According to the party this would create 25,000 more affordable homes each year.
But Urban Taskforce’s CEO has called it a “heavy-handed” policy that adds excessive tax to a housing market which is already slowing down through restrictions on lending from banks and potential levies from councils.
Chris Johnson said, “To add another tax of 15% to 25% to a market that is slowing down will have a very negative impact on the number of new homes that will be built in future years.
“Those well-meaning politicians and community housing providers who believe the developers of new housing can give away a significant percentage of their new homes must understand how the economics of the complex supply system works. The banks will not fund the 15% to 25% proportion that Labor wants to give away and developers will find it very difficult to make a project viable without some incentive.”
“The report on housing affordability for the NSW government by the former governor of the Reserve Bank of Australia, Glenn Stevens, made it clear that housing affordability was linked to housing supply and that the planning system in NSW was too slow and complex and that standards that add to housing costs should be reviewed.
“The Urban Taskforce has proposed an incentive based policy for affordable housing that could provide 40,000 new affordable rental homes over a 10 year period. The policy is based on the NSW government’s Affordable Rental Housing SEPP and could provide 20% of a project as affordable housing for a 10 year period with 20% floor space uplift.”
