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Sydney faces shortfall of more than 200,000 homes for low to moderate-income earners, report shows

Sydney needs to find room for 200,000 more homes to help low to moderate-income earners who face chronic rental stress, new research has found.

The biggest area of need is the inner south-west, according to University of New South Wales researchers, where 33,600 homes are needed within the next two decades just to keep up with demand at that income level.

Sydney has a huge backlog in social and affordable housing thanks to decades of undersupply, said research fellow Laurence Troy from the university’s City Futures Research Centre, ahead of the release of the research on Thursday.

The Parramatta region and the south-west also have a lack of appropriate housing and face a shortfall of 28,000 and 23,000, respectively.

“Social housing doesn’t currently deliver enough to even maintain the same share [of the market] and while affordable housing is being built by the community sector, it’s not enough to meet the current unmet backlog,” Dr Troy said.

A further 117,000 properties are needed across the rest of the state, which Community Housing Industry Association chief executive Wendy Hayhurst said indicated the urgent need for government action.

Region Dwellings needed
Inner South West33600
South West23900
City and Inner South17700
Inner West13500
Outer West and Blue Mountains13000
North Sydney and Hornsby11500
Outer South West10600
Eastern Suburbs10300
Northern Beaches6300
Baulkham Hills and Hawkesbury3800
Source: City Futures Research Centre.

“It’s a huge total, but if we turn our back on it, all it will do is get bigger and bigger, and more difficult and more difficult to solve … it won’t go away,” she said.

Ms Hayhurst, whose organisation commissioned the research, said demand for social and affordable housing was greatest in the city’s outer regions because lower income earners had already been pushed to live there. But, she noted, this did not mean this was where the most new housing should be built.

Dr Troy added while it was more affordable to build fringe estates where land was cheaper, this would not have the same benefit as having a spread of social and affordable housing across the city.

Delivering such a huge amount of social and affordable housing would cost billions, with the report indicating government would need to chip in $3.3 billion a year under the preferred funding model to meet demand. More than $1.2 billion would be needed for housing in Sydney alone.

Dr Troy said a capital grant, combined with money available though the federal government’s bond aggregator, would be the most efficient way to fund supply long-term. He said if combined with any private housing development that in turn raised capital for social and affordable housing, annual funding needed for Sydney properties could drop to $345 million.

He said while an ongoing subsidy was often more appealing to governments than an upfront payment, it could be more costly in the long term.

Along with picking the right funding model, Ms Hayhurst said the delivery of social and affordable housing could be greatly affected by affordably housing targets, such as those put forward by Labor and the Greens, as well as by government giving up land – which could make up between 40 and 60 per cent of development costs – for redevelopment.

The findings come ahead of a cost of living rally to be held Thursday night, which will call for at least 5000 new social housing homes to be built across the state each year. The rally at Sydney Town Hall, expected to draw about 2400 community leaders and members, will also call for government action on housing insecurity, rental affordability and energy costs.

A spokeswoman for Social Housing Minister Pru Goward said the government was on track to deliver 23,500 new and replacement social and affordable housing dwellings over 10 years. An extra 3400 homes were expected to be delivered by community providers under an affordable housing fund.

The opposition was contacted for comment.

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