Pre-empting the NSW State Budget on June 20, the State Opposition (NSW Labor) over the weekend released their plans to tackle housing affordability for first home buyers if they win the next election (2019).
Key aspects of the announcement include1:
- 25% of dwellings constructed on government-owned land that is being redeveloped will be designated as Affordable Housing to rent or buy;
- 15% of dwellings on privately-owned land rezoned for housing will be designated as Affordable Housing to rent or buy;
- Conduct a full audit of all publicly-owned land and create an Affordable Housing Land Register; and
- Refocus Urban Growth to prioritise the development of affordable, social and mixed housing.
Robert Snell, Certified Financial Planner®, First Home Buyer Coach and Housing Affordability Expert welcomed the announcement. “It’s great that the NSW State Government and Opposition are now thinking about housing affordability for first home buyers.”
On the positive side of this announcement, Robert believes setting a mandate on the supply of new homes designated ‘affordable housing’ will provide first home buyers with a more reasonable chance to buy a first home. “The measure would increase supply if it was successful” said Robert.
Robert does however find the announcement is light on detail. “It’s ok to release more affordable supply but what happens when that supply is used?” questions Robert. “It must also include first home buyer zoning, which means that a property can only be bought and sold by a first home buyer. This way we develop a reserve of affordable housing over time. Without this, one day we’re just going to run out of developments and we’ll find ourselves right back where we started.”
Overall Robert finds the announcement doesn’t go far enough. “No one level of Government has all of the levers to solve housing affordability on its own and we should stop thinking that they do” said Robert. “Whilst we welcome all ideas fix the gaping wound of housing affordability, we need a more comprehensive solution, not more band aids” he said.
The announcement shows that we need first home buyer housing to be a State and National economic priority, as it identifies Federal government issues. “If that cannot be done in a bipartisan way, then we need to set up a non-political planning organisation to be charged with the task of making housing more affordable. We need to take the political heat out of this issue so that we can deal with the problem,” said Robert.
Robert proposes we create a National Housing Affordability Planning Organisation (NHAPO).
“NHAPO would have access to high-level economic analysis and could then work with existing city-based groups such as The Greater Sydney Commission along with infrastructure bodies such as infrastructure Australia as well as Federal, State, Local Governments and their Departments. NHAPO should be given the power to set interim and long-term housing affordability targets for each city with a focus on infrastructure to make the cities more liveable and more capable of dealing with immigration and population growth” said Robert.
Robert offers 13 solutions to first home buyer housing affordability in his paper “The Real Home Truth: Why unaffordable housing for Young Australians hurts us all”.