Inclusionary Zoning FAQs

New South Wales’ housing system is under stress. Homelessness is increasing and we need more emergency beds, we have 60’000 people on the public housing waiting list, only 1% of rental properties are affordable to people on the minimum wage and the median property price in Sydney is close to $1 million.

While there is no silver bullet solution one of the single best actions the NSW Government can take is to implement ‘Inclusionary rezoning’ (IZ) > or known publicly as Value Sharing.

Frequently Asked Questions

What is Inclusionary Zoning?

A:

Inclusionary zoning requires a given share of new construction to be affordable by people with low to moderate incomes.

How does it work?

A:

This planning provision sets aside a share of affordable housing in a new construction project – for example, 7-30% of all dwellings to be affordable housing for purchase or rental.

What is the problem?

A:

New South Wales’ housing system is under stress. Homelessness is increasing and we need more emergency beds, we have 60’000 people on the public housing waiting list, only 1% of rental properties are affordable to people on the minimum wage and the median property price in Sydney is close to $1 million.

While there is no silver bullet solution one of the single best actions the NSW Government can take is to implement ‘Inclusionary rezoning’ (IZ) > or known publicly as Value Sharing.

What is Value Sharing?

A:

Variously understood as inclusionary rezoning, inclusionary housing or value capture Value Sharing is the inclusion of a % of affordable housing in new developments where development is contingent on government intervention. Shelter provides more detail.

Affordable housing, managed by Community Housing Providers (CHPs) is a growing area but in order to be self-sustaining it needs access to affordable land.

Value Sharing would allow the systematic injection of affordable properties into CHP portfolios which they could then as an asset to leverage further properties.

What can the government do?

A:

Set a new planning provision for all new developments.
Build in 30% affordable housing at the 7 Urban Growth precincts.

Is the private sector opposed?

A:

The private sector is not opposed to such "inclusionary zoning" in the right conditions. The key is for the developer to know before they buy the land what their obligations will be, so that these can be factored into the purchase price. Australian developers working overseas already do this in many cities around the world.

Has this worked before?

A:

Yes, at Harold Park in Sydney, as well as in South Australia and ACT.

New York, London and Amsterdam are three examples of major global cities with inclusionary rezoning. London has developments with a 40-50% target.

Over 200 cities in the US have inclusionary rezoning planning instruments.  

Will it solve the issue by itself?

A:

No, but it is an important, widely supported solution that can have an affect across Sydney. It can increase the amount of affordable rental housing supply as well as help first time buyers who otherwise could not gain access to the housing market. The Sydney Alliance believes it is an important component in a comprehensive plan for affordable and social housing, with targets and timelines.

 

Where can I find more information?

A:

You can find more information from our friends at Shelter NSW here. You can find more about the perspective from the private sector from the Committee for Sydney.

 

Why must we act now?

A:
  1. The housing crisis is extreme with only 1% of properties in Sydney affordable to people on the minimum wage.
  2. Favourable media conditions: constant stories about housing stress
  3. Housing was an issue at the 2015 State Election
  4. Alignment of allies within NSW Government
  5. Lead in period toward 2019 election
  6. Leverages significant people power built through 2014-2015 Alliance campaign. (Campaign isn’t starting from scratch)
  7. Planning and Housing Ministers speak to the Federation of Community Housing Providers at the end of July.

Who is the decision maker?

A:

For state-wide policy change, the top decision maker is the Premier who we want to move to a positive position, followed by the Treasurer we want to move to a neutral position. This gives the political room for the Planning and Housing ministers to put forward the case for Value Sharing / Inclusionary Rezoning (IZ).

 

What is the mechanism that Government would use to implement IZ?

A:

In a considered way expand State Environmental Planning Policy 70 Affordable Housing across all local government areas.

 In a Considered way means that it would be phased in over a number of years, so that developers can factor in the cost of the affordable housing into the purchase of the land.

 SEPP No. 70 Affordable Housing is a policy which offers a mechanism allowing specified councils to assign an affordable housing contribution to certain developments within its local government area. This scheme is currently operating in Ultimo-Pyrmont and Green Square only.

You can find more information from our friends at Shelter NSW here. You can find more about the perspective from the private sector from the Committee for Sydney.

How do I convince conservative MPs about Shared Value?

A:

Following are points aimed at conservative listeners (who may have concerns from a number of different angles that progressives may not have considered problems). 

  1. We are asking the government to create the conditions in which private sector developers can deliver a proportion of affordable homes in all developments. The government does this by liberalising development controls.
  2. Value Sharing doesn’t cost taxpayers nor does it affect the viability of developments since it is funded by newly created wealth from the planning value uplift. 
  3. Value Sharing recognises that no one sector has the answer to the issue of housing affordability. Value Sharing is an innovative collaboration that leverages the best of public, private and community sectors. Private entrepreneurialism, with community sector for-mission values and expertise and government scale.
  4. Value Sharing works for developers to know before they buy the land what the obligations will be so that these can be factored into the purchase price.
  5.  While it wouldn’t be in developers’ interest to openly argue for it, developers are very used to integrating Value Sharing % overseas. Lend lease and PACE endorsed CFS paper on this issue.
  6. Sydney needs density done well with a doubling of the population over the next 40 years. (This was in the NSW Government intergenerational report June 2016)
  7. We know liveability and productivity go hand in hand in a successful knowledge based economy of the 21st century. 
  8. In a global economy, a diverse ‘city for all’ wins the competition for investment. In such a city, housing is not a barrier to skilled migration, retention of innovators, start-ups and entrepreneurs.
  9. Value Sharing provides a market for Sydneysiders in the lowest two quintiles of the economy that provide vital services to the city. * Note, some of the public advocacy for affordable housing has focused on teachers, police, nurses etc. They were used by local councils who wanted to make the argument about affordable housing to communities worried about public housing tenants. There was push back from Premier’s about this as it seemed like a critique of how much the NSW government was paying public sector workers and middle class welfare. These professions would earn above the threshold. The lowest two quintiles would cover base level jobs such as hospital orderlies, street cleaners etc.
  10. Unlike social housing tenants, people who use affordable housing are most often working but increasingly priced out of the rental market.
  11. Currently the gap between social housing and market rental is so great that there is perverse incentive to stay in social housing. Affordable housing provides a step out of welfare dependency.
  12. Social housing is dealing with the bottom 2%, and the transition out of social housing is at historic lows. Successful transition out of social housing is a key state priority under the Premier’s priorities – under the ‘protecting the vulnerable’ category.
  13. When a citizen transitions out of public housing they become eligible for federal rent assistance. Bringing funds into NSW.
  14. Who runs it? Community housing providers are agents for growing the supply of affordable rental housing.
  15. Value Sharing, phased in and considered, can be integrated easily into the booming construction industry which is the basis of so much of Sydney’s current prosperity.
  16. The government is succeeding in unlocking supply, home approvals are at record levels, but remains very unaffordable for most people in the lowest two quintiles.
  17. Even a 15% shared value target would be seen as conservative for a global city where San Francisco is debating 20, 30, 40%, Amsterdam has 30%, London has Tory Mayor Boris Johnson arguing for 31% and 50% in the past.
  18. Acting on housing is electorally popular! Value Sharing would see the NSW government acting in a measured and considered way for the most vulnerable. This helps build community support for ‘density done right’ by mobilising non-traditional community allies to support density.
  19. Value Sharing helps tackles homelessness by going "upriver" to where problems begin. The Sydney Alliance hears stories from Exodus, Jewish House, Muslim Womens’ Association and Wayside Chapel of more and more employed people coming to their services because they cannot find or afford rental.
  20. The cost of homelessness to the state is far greater than prevention through affordable housing.
  21. Families; Affordable housing is an option that can relieve familial stress caused by economic hardship. Mixed communities where young and old family members can afford to live nearby knits together social fabric and allows family members to help each other with child minding and caring for their aging kin. 
  22. Mixed communities provide greater opportunities for disadvantaged kids to succeed and would stand in contrast to badly planned estates that have become places of high disadvantage at Sydney’s fringe.
  23. For women seeking safety from domestic violence, affordable housing provides an alternative option to public housing that may be located amongst highly vulnerable people. 
  24. The 2011 NSW census found that 36% of older homeless people were women. However, this figure is considered to be an underestimate as older women experiencing homelessness are not generally found sleeping rough or in crisis accommodation, but are staying with friends, couch surfing or living in backpacker accommodation, boarding houses or hostels. Read the full story here
  25. Access to employment- city employers have better access to workers (wait staff, cleaners, childcare workers, orderlies) who are losing out good employees to regional competitors (e.g. St Vincent’s Hospital has a big issue of the turnover of base level staff).
  26. Affordable housing creates opportunities for people to build stability and continue to contribute to the tax base, spend more time with their children or families and contribute to the economy as consumers. Balances out opportunity cost?
  27. Value Sharing is not establishing a new precedent; but backing something that already works in Sydney- Jordan Springs, Citywest, Rouse Hill, Greensquare. There are some other examples through voluntary planning agreements with local council.  
  28. There have been no reported negative impacts of the affordable-housing levies in those parts of Sydney where they apply, either in terms of development disincentives or hour price inflation. 

 

What do I want my MP, MLC, local councillor or developer to do?

A:

1. Write to the Premier and the Planning Minister indicating that:
A group from the Sydney Alliance made a representation to them. That that group represented local and citywide organisations beyond those in the room. 
If supportive: the MP’s support for Value Sharing and why.
AND to let you know when they have sent the letter. 

2. If Coalition parliamentarian and supportive, to personally speak to the Premier about their support.

3. If a non-Coalition parliamentarian, to work with the Sydney Alliance on a parliamentary strategy to get the NSW Government to support Value Sharing.  

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