Newsletter 20 – Affordable Housing

Affordable Housing is housing made available to very low to moderate-income households at low rents.

Affordable Housing comes at a cost – who should pay?

Governments that don’t deliver avoid accountability – they make a myriad of their departments share the responsibility, provide inadequate funding and set confusing measure – that’s Affordable Housing in a nutshell.

Tangling local government up in Affordable Housing simply serves to “nickel and dime” a very serious challenge that our community needs to address.

The facts from North Sydney’s vantage point.

North Sydney commitment to providing Affordable Housing sees it “owning”:

• 12 houses ranging in value between $1.6m and $3m (median value is $2.3m)
  • North Sydney’s median price for all houses is $2.1m
• 42 units ranging in value between $600,000 and $1.3m (median value of with an average value is $850,000)
  • North Sydney’s median price for all units is $870,000
• 23 boarding house places valued at around $350,000 each
• 1 retirement village

The total investment is near to $70m

We are told that to meet the “projected demand” for Affordable Housing in 2036, the number of:

• houses will need to increase from 12 to 180 houses
• units will need to increase from 42 to 2,961 units

How much will it cost to meet that “projected demand”?

Simply using present average values of North Sydney’s present “affordable” houses, tells us that we need to invest $2,300,000,000 to meet that “projected demand” .

North Sydney can fund this by either:

• asking rate payers to pay more – $60,000 between now and 2036; or
• levying new developments which of course will drive up prices of new residences.

Neither is practical.

What should we do:

• Make a start by selling existing stock and reinvesting into more lower cost housing units?
• Look for ways to raise capital to invest in Affordable Housing?
• Look for ways to get out of affordable housing and pass the burden back to the State Government?

Let me know what you think.