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A Greens councillor wants the City of Sydney to spend at least a quarter of the $817.5 million it has in the bank to purchase property after the council backed away from its affordable housing targets, calling them “aspirational”.
Data compiled by Sylvie Ellsmore, a Greens councillor and former deputy mayor, said the council will not meet its 15 per cent target for affordable and social housing by 2036.
City of Sydney councillor Sylvie Ellsmore wants the council to buy private properties and turn them into public, social or affordable homes as part of its spending on housing.Credit: Jessica Hromas
Her report How Councils can drive affordable, social and public housing gains: Lessons for Sydney from Paris and London said council is forecast to have an operating surplus of about $100 million each year for the next decade.
But Ellsmore said the council had at least $220 million cash that “it doesn’t have any plan for” and could spend it on affordable homes without strain on council finances.
“Spare public money should be invested in what the community needs, not sitting in the bank,” she said. “The City of Sydney is willing to invest large amounts in commercial property. It should be willing to invest in giving people a home.”
Ellsmore’s report outlining the council’s struggles with housing affordability follows NSW Premier Chris Minns’ clash with Sydney Lord Mayor Clover Moore over residential development in the Sydney CBD.
Sydney Lord Mayor Clover Moore said the council was committed to tackling housing affordability and homelessness “any way it can”, although housing is principally the responsibility of the state government.Credit: Janie Barrett
Moore said the council was helping deliver 4700 affordable homes by 2036 through levies, amended planning controls, discounted property sales and a housing fund.
“Divesting cash assets earmarked for services and capital works might allow us to purchase a few hundred additional homes in the short term,” she said.
“But [it] would put the city’s work under great financial strain in the long term and limit our ability to leverage even greater housing yields through ongoing support of the community housing sector.”
Moore said the council was committed to tackling housing affordability and homelessness in “any way it can”, although housing is principally the responsibility of the state government.
Planning Minister Paul Scully said all options should be considered when it comes to addressing the housing crisis and local councils should focus on increasing the supply of homes in their area.
If the council is collecting money for affordable housing, “they should be doing everything in their power to make sure it is delivered”, he said.
Ellsmore said the council will not meet its affordable and social housing targets because of minimal public investment in new affordable housing, few requirements for new private development to be affordable and the sell-off of public housing.
“Hardly any of the new housing built in our city has been affordable – less than 1 per cent of new development in the city last year was affordable,” she said. “This demonstrates that simply encouraging additional supply is not solving the problem.”
Ellsmore’s report said the proportion of social housing in inner-city Sydney will decline from 7.9 per cent in 2022 to 7.5 per cent in 2036, with affordable housing projected to increase from 1 per cent in 2022 to 2.9 per cent.
A council spokesman said the 15 per cent target for social and affordable housing had always been aspirational.
He said the target articulated what is needed to “create inclusive communities where people of all incomes and circumstances can live” and to spur all levels of government to play their role in the delivery of social and affordable housing.
If the council purchased private properties for affordable housing, it would also have to spend significant amounts on maintenance, “putting greater pressure on other sources of income and potentially leading to higher rates and charges”, he said.
Ellsmore said London and Paris had shown it was possible to deliver public, social and affordable housing quickly and on a large scale by greater government intervention in the housing market instead of leaving it to the private sector.
Buying and renovating existing housing is one of the main sources of new public and affordable homes in Paris, she said. “They are buying housing and making it affordable everywhere, even the wealthiest areas of the city.”
University of NSW senior lecturer in city planning Ryan van den Nouwelant said it is entirely appropriate for councils to invest it in ways to add more social housing if they have the resources.
However, van den Nouwelant said providing council-owned land for affordable housing would “go further than cash, in terms of the social housing delivered”.
“It is more important, and would be more effective, for state housing and development agencies to increase the share of housing it builds, than to expect local governments to fill that void,” he said.
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