Redfern PCYC site work
throws up interesting financial questions
We have earlier drew attention to the Land and Housing Corporation (LAHC) decision to
move from ‘Build to Rent’ to ‘Build to Sell’ on the Redfern PCYC site. It was
interesting in the Council and Central Sydney Planning Committee (CSPC)
discussion this change was hardly mentioned. Council has correctly said that
the planning controls it produced do not determine how the development might be
financed, only what will be built. LAHC claimed the density was not high enough
to continue with its plan to deliver ‘Build to Rent’.
Council’s
initial proposal for the Redfern site was for 10% affordable housing in
addition to the 30% social housing proposed. The state government gateway
determination changed that proposal back to 30%, including both social and
affordable, with the request that Council and LAHC come to agreement about the
social and affordable numbers within the 30%. Council decided to push the point
on the ability of the project to deliver affordable housing in addition to 30%
social housing. Council commissioned a Feasibility
Analysis by AEC Group on the development.
Council then
used that feasibility analysis to propose that at a normal developer margin of
20% the project could deliver 7.5% affordable housing on top of the 30% social
housing. At the CSPC the NSW Government Architect argued that the developer
risk was lower for redeveloping a government-owned site and that the original
10% affordable housing agreed to by Council and the CSPC, arguably should still
be possible. Council staff argued that by sticking to an ordinary developer
margin there was more chance that the 7.5% would get up.
The interesting
question is – if the government decides again that only 30% social and
affordable housing is to be provided, then where will the profit that LAHC make
on the development go? The inference from the CSPC meeting was that given LAHC
are only delivering a 30:70 social private development in the inner city in all
likelihood LAHC is using the profit from these redevelopment to fund additional
social housing in other parts of Sydney and the state. This may go some way to
explaining why LAHC argues that 30:70 is the sweet spot as well as government
policy. The Waterloo South Independent Advisory Group and now AEC Groups
figures both show that LAHC developments at both Redfern and Waterloo can
deliver far more social housing and or affordable housing than is proposed. In
effect some of the land is being sold to fund housing elsewhere and not in the
inner city.
The Aboriginal Affordable
Housing Issue highlighted at Elizabeth Street
The PCYC
Elizabeth Street Redfern proposal has also bought a focus back on Aboriginal
affordable housing. REDWatch supports the principle that the redevelopments of
all NSW Government- controlled land in Redfern and Waterloo should provide 10%
Aboriginal Affordable housing to keep a viable Aboriginal community in Redfern
Waterloo.
REDWatch has
previously highlighted that Council’s policy is that 10% of the Affordable
housing provided should be for Aboriginal people. This issue came to a head in
the Council committee debate over LAHC’s Elizabeth Street redevelopment, which
revealed that Council’s policy would only deliver 2 or 3 Aboriginal affordable
Housing units in this development in the heart of Redfern.
In the end
Council changed its recommendation from “consideration should be given to
allocating 10% or more of the total number of affordable rental dwellings to be
provided for Aboriginal and Torres Strait Islander housing” to “consideration
should be given to allocating 10 per cent or more of the total number of
dwellings to be provided for Aboriginal and Torres Strait Islander housing”. We
welcome the change and but will have to wait to see how DPIE and LAHC respond
to the recommendation.
During the discussion useful information about
other steps Council is taking to lift the number of Aboriginal people in
affordable housing was released. This included that Council is funding a
dedicated Aboriginal Affordable Housing Engagement Coordinator to work with the
three major Community Housing Providers operating in the local government area
and as a result of the 160 social and affordable housing units in the recent
Gibbon’s Street development 43% have been allocated to Aboriginal and Torres
Strait Islander households. You can see the details of what Council is doing in
this area in this Council Officer note to Council on Housing for Aboriginal and
Torres Strait Islander Peoples as it related to the Planning Proposal
for600-660 Elizabeth Street, Redfern.
Geoff has also written an opinion piece in the South Sydney Herald linking these two issues – Will LAHC’s redevelopment profit pay for Aboriginal affordable housing?