Draft Blueprint for North Eveleigh
Released – Extracts from (Ministers Media Release)
Minister
for Planning and Redfern-Waterloo Frank Sartor
today previewed draft plans that will help deliver an upgrade to Redfern
Station and new affordable housing to the area reports this media release from
Minister for Redfern Waterloo, Planning and the Arts Frank
Sartor.
“It is our
intention that between 12% and 16% of residential dwellings on the site be
affordable housing – which breaks down to between 150 and 200 dwellings,
depending on size,” Mr Sartor said.
Further
detailed plans will also be developed for the station upgrade and affordable
housing component.
RWA Update May 2008
More than
$1.3 billion will be invested in Eveleigh’s transformation, which will result
in:
- 2400 residents living in 1260
new dwellings at North Eveleigh including
a significant proportion of affordable rental dwellings.
North Eveleigh Concept Plan Environmental
Assessment
Executive Summary –
- The provision of a significant
proportion of affordable housing dwellings.
1.2
- Introduction of a range of
initiatives for the conservation of water and energy, provision for
community facilities, and affordable housing.
1.4 Requirements
Provision
of affordable housing in accordance with the Redfern Waterloo Authority
Affordable Housing Contributions Plan
5.2.1.
- A range of initiatives for the
conservation of water and energy, provision for community facilities and
affordable housing
5.2.4 SEPP 65 Principles Social
Dimension
In addition
it is proposed to provide a significant amount of affordable housing units on
site.
5.2.12 RWA Affordable Housing
Contributions Plan
This Plan
requires a contribution equivalent to the estimated cost of the provision of
affordable housing comprising $59/m2 of the total gross floor area of
development in the Operational Area reduced by the gross floor area of existing
buildings. The gross floor area of existing buildings has been estimated by the
RWA at 45,854m2.
6.13.2
- Housing affordability is also
an issue for lower income city workers i.e. workers within the hospitality
and service industries. These workers are critical to the efficient
operation of Global Sydney and play an important role in its economy. They
are however becoming increasingly priced out of living in inner city
area’s (in favour of more affordable locations in Western Sydney) or
having a greater dependence on commuting. The latter trend placing
particular strain on city shift workers. - The RWA’s provision of a
component of affordable housing on the Subject Site will not only seek to
address issues of social equity but also the economy. This is because the
provision of affordable homes within the inner city will enable the
retention of a diverse workforce in close proximity to Global Sydney. This
will support the function of businesses within Global Sydney and their
economic success. - Maintaining diversity in the
Global Sydney labour force will also minimise the potential for labour
shortages. Should labour shortages occur for a range of lower income jobs,
businesses would need to attract staff through higher salaries and other
incentives. These additional costs would in turn need to be passed onto
the consumer through the costs of services and goods. - The provision of affordable
housing on the Subject Site will also enhance the economic wealth of
disadvantaged families through a number of measures. Firstly more
affordable housing options allows for a greater proportion of a households
income to be directed to quality food, health services and care. Improved
health and access to employment opportunities increases the ability for
these households to break the cycle of disadvantage.
6.13 Summary
- provide affordable housing
options to create a socially equitable and inclusive community and a
diverse local labour force;
8 Draft Statement of Commitments
- Affordable Housing – A
significant proportion of the new dwellings in North
Eveleigh will be affordable housing which will be managed by
a registered community housing organisation or government agency. This
will be funded by the RWA’s affordable housing developer levies. – To be
addressed at Project Application Stage - Payment of Affordable Housing
Contributions – Affordable Housing Contribution will be made in accordance
with the Redfern-Waterloo Authority Affordable Housing Contribution Plan
2006 (as amended) – Prior to issue of Construction Certificate
Appendix V – North Eveleigh Social Impact
Assessment Prepared by Redfern-Waterloo Authority April 2008
Executive Summary – Housing and
Population page 4
- It is anticipated that the North Eveleigh site will provide for up to 1,258
dwellings and a population of up to 2,400 new residents. Housing will
comprise a mix of studios, one, two and three bedrooms. - Based on the RWA’s initial
calculations taking into account development contributions collected from
the RWA Affordable Housing Contributions Plan and contributions from the
former Carlton United Brewery site, the North
Eveleigh site can provide a proportion of affordable housing.
Social Impact of North
Eveleigh (page 13)
North Eveleigh will draw a working/student population who want to
live in close proximity to the Sydney CBD for access to universities, work and
entertainment.
The North Eveleigh redevelopment will respond to a market
which is relatively more affordable than comparative residential markets close
to the City such as Barangaroo, Pyrmont, and Victoria Park.
6.7 Affordable Housing (pages 17-19)
The
definition of Affordable Housing has been endorsed by Federal and State and
Government to mean housing for very low income households, low income
households or moderate income households whose gross incomes fall within the
following ranges:
- very low income – below 50% of
the gross median income ($30,837)7 - low income – between 50% and
79% of the gross median income($49,339), and - moderate income – between 80%
and 119% of the gross median income ($74,008).
The
definition also includes housing that is appropriate to the household, and
housing that is priced so that households are able to meet other essential
basic living costs.
Based on
data compiled by the ABS using the 2006 Census for the RWA’s Operational Area,
in the postcode areas 2008, 2016 and 2017 (Redfern, Waterloo, and Darlington)
1,450 households earning very low, low and moderate incomes are expending more
than 30% of household income on private rental accommodation. The total number
of households in private rental accommodation in the above postcodes was 4,502.
Based on this figure, 32% of private renters are in housing stress.8
431
households earning very low, low and moderate incomes are expending more than
30% of household income on home purchase. The total number of households
purchasing in the above postcodes was 2,400. 18% of households purchasing in
homes in the RWA’s Operational Area in 2006 were in housing stress.
In 1996 and
2006, the proportion of dwellings which could be affordably rented by very low
income households fell from 4% to 1.7% respectively. In the same years the
proportion which could be affordably rented by low income households fell from
16.9% to 9.2%. 59% of all dwellings could be affordably rented by moderate
income households in 2006.9
Between
1996 and 2006 none of the dwellings which were for sale were priced such that
they could be purchased by very low income households. The proportion which
could be purchased by low income households fell from 5.1% to zero in the years
1996 and 2006. The proportion which could be purchased by moderate income
households fell from 31.7% to 7.3% in 1996 and 2006 respectively.10
There are
361 indigenous households in the RWA Operational Area. 58% of indigenous
households in RWA’s Operational Area live in public housing. Of those
purchasing 24 out of 361 indigenous households fully own or are purchasing a
house (2006 ABS Census).
Social Impact of North
Eveleigh
It is
estimated that under the Redfern–Waterloo Authority Affordable Housing
Contribution Plan approximately $7million in affordable housing contributions
will be received from the eventual purchaser of North
Eveleigh site over an estimated 5-7 year development horizon.
It is
estimated that under the Voluntary Planning Agreement between the RWA and the
owners of the former Carlton
and United Brewery site a further $25 million will be received by the RWA over
a similar development period for affordable housing.
The RWA
believes that the North Eveleigh site presents
an ideal opportunity for the provision of affordable housing and that a
proportion of the new dwellings in the site would comprise of affordable
housing dwellings.
The RWA has
made a commitment that $16 million worth of contributions would be directed at
providing affordable housing for Aboriginal people in the RWA’s Operational
Area.
A possible
approach for managing the affordable housing may be to transfer affordable
housing to a registered community housing organisation such as City West
Housing which has successfully delivered affordable housing in Pyrmont and Green Square.
It is
intended that the Statement of Commitments for the North Eveleigh Concept Plan
include a provision requiring that affordable housing be provided on the site and
be managed by a registered community housing provider.
7 Income ranges are for 2006 and provided to the RWA from the NSW
Department of Housing, Office of Affordable Housing.
8 Note that these figures are based on information provided to the ABS.
9 Rents for new bonds lodged with the Renting Services Branch, Office of
Fair Trading, Department of Commerce (1996 and 2006).
10 Land Sales Contracts notified to the Land and Property Information NSW
(1996 and 2006).
(North
Eveleigh Social Impact Assessment pp17-19)
Appendix W – North Eveleigh Economic
Impact Assessment March 2008 by Hill PDA Consulting
Key Study Findings – Other Economic
Considerations (page
8)
- 4. The RWA’s provision of a
component of affordable housing on the Subject Site will not only seek to
address issues of social equity but also the economy. This is because the
provision of affordable homes within the inner city will enable the
retention of a diverse workforce in close proximity to Global Sydney. This
will support the function of businesses within Global Sydney and their
economic success. - 5. Maintaining diversity in the
Global Sydney labour force will also minimise the potential for labour
shortages. Should labour shortages occur for a range of lower income jobs,
businesses would need to attract staff through higher salaries and other
incentives. These additional costs would inturn need to be passed onto the
consumer through the costs of services and goods. - 6. The provision of affordable
housing on the Subject Site will also enhance the economic wealth of
disadvantaged families through a number of measures. Firstly more
affordable housing options allows for a greater proportion of a households
income to be directed to quality food, health services and care. Improved
health and access to employment opportunities increases the ability for
these households to break the cycle of disadvantage.
1.5 Conclusion (page 9)
- provide affordable housing
options to create a socially equitable and inclusive community and a
diverse local labour force
4.4 Summary (page 23)
Owing to
the broad range of local residents and their diverse socioeconomic , cultural
and ethnic characteristics, there are significant challenges that need to be
addressed to ensure social cohesion and equity. The following sections of this
report address how the proposed uses, that form the North Eveleigh Concept
Plan, may help to address some of these challenges through the creation of
local employment opportunities, the provision of local services and affordable
homes.
6.1 Affordable Housing (page 32-36)
The Affordable Housing Scenario
It is
widely acknowledged that NSW is facing serious problems in relation to the
affordability of housing. In fact over 265,00018 households in the
State are estimated to be experiencing housing stress (generally defined as
households that spend over 30% of their gross income on housing related costs
and thereby have to sacrifice their ability to meet other necessities). The
following section of the report investigates the potential economic impact of
the proposed North Eveleigh Concept Plan to the residential industry and local
residents in accordance with the Director-General’s Requirements provided in
accordance with Section 75F of the Environmental Planning and Assessment Act
1979.
Housing
stress in Australia
has grown as a result of the quadrupling of housing prices over the past 20 years
without the commensurate growth in incomes. Within Sydney this issue has become particularly pronounced.
In Sydney it
was found that the median housing price of $520,000 would need to drop to $180,00019
in order for the average household to avoid housing crisis.
One parliamentary
report found that the median house price ($560,000) of a dwelling within Sydney’ inner ring would
require an annual mortgage repayment over a 25 year period of $47,500 (or $913
a week).20
The
mismatch between housing costs and household incomes has resulted in a
significant decline in the proportion of persons buying first homes and greater
pressures on the rental housing market.
The RWA
Operational Area has historically been associated with low to moderate income
housing, reflecting its location on the CBD fringe in close proximity to
industrial areas. As a result it has been generally regarded as an affordable
location for a mix of lower income city and CBD fringe workers, students and
families. As a result of increasing gentrification and the growing popularity
of living in inner city areas by professionals with higher incomes, this
perception has begun to change.
The
changing demographic characteristics and resurgence in housing demand in CBD
fringe areas has affected the value of dwellings significantly over the past 10
years alone. Based on the Department of Housings Rent and Sales Reports the
median dwelling price in the City of Sydney LGA (inclusive of the former South
Sydney LGA) increased from $298,000 in September 1998 to $483,000 in January
2008 or by +62%. The growth in values is in part a result of the gentrification
the area experienced over the period, housing shortages and changes in planning
policies permitting a greater component of residential dwellings within the
city.
“Housing is affordable when households that are
renting or purchasing are able to pay their housing costs and still have
sufficient income to meet other basic needs such as food, clothing, transport,
medical care and education. – NSW DoH – Centre for Affordable Housing
Much of the
supply of new dwellings within city areas has been however at the higher end of
the market reflecting a trend for the development of high value private rental
dwellings. This trend was so pronounced across Australia between 1996 and 2001
that despite the 7.6% growth in the number of private rental units achieved,
there was a net loss of rental units in the bottom four rent quintiles21.
Relating
the trends discussed above to the Subject Area, it was found that between 2001
and 200622:
- no dwellings for sale were of a
value that could be purchased (without other assistance) by households
within the very low income band (annual combined income of approximately $29,90023).
Over the same period the proportion of affordable rental dwellings fell
from 6.7% to 1.7% for this group; - the proportion that could be
purchased by low income households (annual combined income of approximately
$47,84024) fell from 0.8% in 2001 to zero in 2006. Over the
same period the proportion of affordable rental dwellings fell from 14.1%
to 9.2% for this group; and - the proportion that could be
purchased by moderate income households (annual combined income of
approximately $71,76025) fell from 7.8% in 1996 to 7.3% in
2006. In 2006 this group could afford to rent 59% of stock however it is
reasoned that there are still significant pressures for this group as they
compete with higher income households for the same stock.
The table
below compares these figures to the proportion (and actual numbers) of
residents with the suburbs of Darlington, Redfern, Waterloo
/ Zetland and the City of Sydney LGA
that were in the very low to moderate income bands as of the 2006 Census. It
shows that in the order of 14,000 households in the immediate vicinity of the
site are within these bands and competing for the limited affordable housing
stock outlined above.
Table 11 –
Proportion of Households by Suburb by Income Band
Suburb Population Very Low Band Low
band Moderate band Total Households
Darlington 2,183 43% 8%
15% 66% (1,441)
Redfern 11,344 31% 4%
16% 51% (5,785)
Waterloo/ Zetland 11,251 41% 4%
14% 59% (6,638)
City of Sydney 156,573 25%
5% 18% 48% (75,155)
Source: ABS
2006, Hill PDA
The figures
above are a combination of public and private households. They show that within
each suburb the greatest proportion of household incomes fall within the very
low to moderate bands and that between 31% and 43% of all households fall
within the very low income band.
By focusing
on public housing tenants, the average household income in the Redfern –
Waterloo Area (2,696 dwellings) was $337 per week or $17,500 per year26.
The
analysis provided above highlights the existing gap between housing costs and
incomes in the area immediately surrounding the site. This mismatch is
forecasted to grow with the attractions of inner city living and the associated
gentrification of inner city and city fringe areas.
The Economic Implications of Low
Housing Affordability
The merits
of providing affordable housing are often associated with the issue of social
equity. Affordable housing is however more than a social equity issue and in
fact an economic one. The economic implications of housing affordability are
becoming increasingly recognised. This is because a range of household types
and their respective incomes has a direct relationship with labour type. The
Australian
Housing and
Research Institute (AHURI) in fact identify that:
“This link between the supply of
affordable housing and labour market shortages is one of the ways in which the
chronic instability of housing markets can impact upon the efficiency of the
economy27”.
Whilst a
significant proportion of jobs within Global Sydney (Sydney CBD and North
Sydney) relate to professional and managerial occupations associated with the
Global companies and institutions based in these locations, there is still a
need (and will continue to be a need) for services that support the operation of
these businesses. The workers employed in service industries (such as sales
assistants, cleaners, administrators) can not command the salary expectations
of other inner city professions however they are equally required to access
jobs and housing within the city.
This is an
issue however when housing prices in inner city areas significantly exceed the
affordability of low to moderate income households as discussed above. This
issue has been identified by the Government with particular respect to Action
A3.2 of the Metropolitan Strategy – Economy and Employment which seeks to:
“increase the integration of
employment and housing markets’ in order to ensure a range of labour is available
for the spectrum of jobs required to support Sydney’s economic function.”
A study by
AHURI into the connection between housing affordability and labour shortages
across Australia
found that the incidence of housing affordability problems amongst working
households was highest for those working in Sydney and particularly inner
Sydney. Prior to 2001, the AHURI study found that the mismatch between housing
costs and staff wages in inner city areas of Sydney was addressed through a range
of methods including:
- commuting to Global Sydney from
more affordable areas (this was the case for the majority of workers); and - reliance on a higher income partner
to afford to live in inner/ central Sydney;
and - the relocation of lower income
households to more affordable areas and new employment markets in Sydney’s outer
suburbs.
The same
study highlighted that the post 2001 housing boom would have created greater
strain on these methods as a result of the growth in property values. This
factor together with the predominance of new luxury apartments in inner city
areas has further outpriced lower income workers. This is particularly a concern
for industries that depend on shift workers who need to locate in close
proximity to their work as they can not rely on public transport because it
does not correlate with the hours of their work.
One example
of such an industry is the hospitality industry. A key industry in Global
Sydney, the AHURI study found that 34% of all workers in the industry lived in
inner city areas (compared to 21% of all occupations). This high rate, despite
the mismatch between income and housing costs, indicates the dependence of
workers in this industry on locating in close proximity to their jobs.
Whilst the
AHURI study found that the greatest pressures were being experienced by
industries such as hospitality, cleaning and health care, the Department of
Housing’s centre for affordable housing also identifies that the issue is
prominent amongst key workers, stating that:
“Individuals working in key services
on low-to-moderate incomes such as those working in childcare and aged care,
police, ambulance personnel, nurses, community development workers and
transport workers, are finding it increasingly difficult to find affordable
housing close to their work places.
Over time, we risk these individuals
choosing not to work in high cost areas that are too far from their accommodation”.
In any case
it is apparent that the pressures on low to moderate income households will
exacerbate if current property trends continue. This will force more low income
households to relocate from inner city areas to more affordable housing
markets. As a result more employees will be required to commute daily to employment
in Global Sydney and pay the associated transport costs as a trade off for
housing costs. This will also exacerbate traffic congestion and transport
issues to and from the city and the environmental implications all of which are
contrary to the objectives of the NSW State Plan.
An
alternative scenario is that a greater proportion of lower income households
that relocate to more affordable locations choose to work in close proximity to
their home. Whilst this would create a more environmentally sustainable
scenario it would also be likely to result in labour shortages for businesses within
inner city areas dependant on key services.
Should
labour shortages in lower income industries occur in Global Sydney, many
businesses would be required to attract staff through financial incentives and
pass these costs onto the client. This would have a knock on impact to the cost
of goods and services within Global Sydney and potentially have an affect on the
attractiveness of businesses moving to or staying within the city.
The
prospect of growing service costs and labour shortages would not be considered
favourably for Sydney’s economy and its role as
a Global City. The economic implications of this
would be difficult to quantify however there is no doubt that they would be far
reaching.
At the
household level, a range of housing affordability within inner city areas also
has economic implications. This is a result of the employment opportunities
access to Global Sydney may provide to individuals through training, experience
with prestigious firms and higher salaries.
Providing
opportunities for wealth creation is a key element of the RWA’s Employment and
Enterprise Plan.
It states
that:
“Empowering people to create their
own wealth (through meaningful employment or starting their own enterprise) is
one aspect of addressing the root causes of social disadvantage experienced in
sectors of the community.”
By
restricting access to these networks there is reduced opportunity for all
socioeconomic groups to benefit from Sydney’s
economic growth. This will further exacerbate the divide between Sydney’s community.
Affordable Housing as Part of the North Eveleigh Concept Plan
The RWA’s
Affordable Housing Contributions Plan establishes clear objectives to ensure
that a socially diverse residential population is created and maintained within
the RWA’s Operational Area. Furthermore the plan seeks to ensure that:
“people of all social and economic
groups have access to a range of opportunities provided in the area.”
A range of
housing choice is a major mechanism to achieve the RWAs objectives. Accordingly
the RWA’s Affordable Housing Contributions Plan seeks to secure a contribution
equivalent to the estimated cost of 1.25% of the total gross area of
development in the RWA’s Operational Area.
The
proposed Concept Plan supports this position by providing in the order of
92,000sqm of residential floorspace. It is estimated that this would translate
into
between
1200 and 1300 dwellings. 1.25% of the gross floor area of these units will be
secured as affordable housing in perpetuity.
In light of
the discussion provided above, the provision of such a significant component of
affordable housing by the proposed Concept Plan is considered valuable in not
only social terms but important with respect to the efficiency and strength of
Sydney’s economy.
“By increasing access to affordable
housing, we work towards integrated and sustainable communities that function
in a way that benefits the whole community.” NSW DoH – Centre for Affordable
Housing
18 NSW Housing Fact Sheet – Shelter NSW
19 The Dimensions of Australia’s
Affordable Housing Problem – URBISJHD
20 John Collett, “Home Savings”
– SMH Nov 2005
21 The Dimensions of Australia’s
Affordable Housing Problem – URBISJHD
22 NSW Department of Housing, Housing Analysis and Research, based on land
sales contracts notified to Land and Property Information and rents for new
bonds lodged with Renting Services Branch, Office of Fair Trading, Department
of Commerce
23 NSW Department of Housing 2007
24 NSW Department of Housing 2007
25 Department of Housing 2007
26 Based on information Provided By Housing NSW – compiled by G.Turnbull
www.redwatch.org.au
27 Are Housing Problems Creating Labour Shortages? – AHURI 2006
6.4 Investment Stimulus (page 41)
The Redfern
– Waterloo Built Environment Plan 2006 identifies in the order of $286 million
of investment in the RWA Operational Area over the next ten years by a range of
government and private agencies. This investment relates to wide variety of
uses including art and media centres, performing arts centres, a national
Indigenous development centre, affordable housing, community health facilities
and infrastructure.
7 Conclusion (page 43)
- provide affordable housing
options to create a socially equitable and inclusive community and a
diverse local labour force;
RWA CEO Robert Domm on affordable
housing – answer to Inquiry into Indigenous disadvantage (uncorrected
transcript page 62):
The Hon. GREG DONNELLY: You have been provided with some
questions on notice. I will refer to a couple of them and seek your response.
The second question asks you to explain the Redfern-Waterloo Authority’s
proposed share equity model of home ownership. Can you provide some detail
about that proposal?
Mr DOMM: I got into trouble a year our so
ago at the budget estimates hearings when I answered that question by saying
that that forms part of stage two of the built environment plan and that we had
not started working on that. I tried to be helpful and answer some questions
and dug myself a hole. Stage two of the built environment plan has commenced
and we are working actively with the Department of Housing on revitalisation of
the public housing estates and trying to see what potential that creates for
new and better public housing and also an element of affordable housing,
including the potential for some sort of shared equity home ownership scheme.
The leaflet
I handed out today indicates that on Saturday the Minister for Redfern
Waterloo, the Hon. Frank Sartor ,
announced a major affordable housing initiative at North
Eveleigh . The concept plan for the redevelopment, which is going
on exhibition this week, will contain between 150 and 200 affordable rental
dwellings. That comprises about 12 per cent to 16 per cent of total dwellings
on that site. The total is estimated to be about 1,260. That is a very high
percentage of dwellings. However, I emphasise the word “rental”. In
other words, we made a strategic decision in respect of that site that
affordable rental dwellings would be a more enduring solution than a one-off,
lower-cost sale process. There are two ways to provide affordable housing: one
is to sell at an affordable rate and the other is to set affordable rental
rates. We have made the decision that the more enduring solution in North Eveleigh is for the Government to set aside the
land from the sale process and then to use developer levies to construct the
dwellings over the development horizon of the project and retain them in
ownership and use them for low-cost rental accommodation.
When it
comes to stage two of the built environment plan and looking at the public
housing estates we are still not at the point at which we have started to work
out the detail of a shared equity home ownership scheme. Therefore, I am not
able to go into any detail in respect of that today. However, the underlying
philosophy of that proposal is whether we can find a way whereby low-income,
disadvantaged people living in public housing can in some way gain a stake in
that housing so that they can generate wealth through capital growth. Having
said that, there is no proposal to sell public housing or anything like that.
We need to look at what is happening interstate and overseas to see whether
there is some capacity to create wealth through a shared equity scheme. We have
not come to any conclusions about that and ultimately it will go to Cabinet and
a decision will be made. That is all I can say about shared equity at this
stage.