The trend of knocking down older blocks of flats to replace them with a smaller number of luxury apartments in parts of Sydney could see community support for development dive, federal independent MP Allegra Spender has warned.
Spender, whose Wentworth electorate takes in Bondi, Potts Point and Paddington, has written to the New South Wales housing minister, Rose Jackson, calling for urgent action.
She is meeting with councils too, urging them to adopt policies similar to the City of Sydney, which does not allow developments that lead to a significant loss of dwellings.
“There is a real risk here of a loss of social licence,” Spender said.
“People are nervous about development at the best of times, but I do think most people in my area recognise that we have an issue that young people can’t get into housing and childcare workers, healthcare workers – the people who are valued parts of our community – can’t live anywhere near us.
“This issue of reducing density and affordability makes people extremely cynical.”
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The Wentworth electorate is at the centre of the luxury housing trend, where developers buy older-style blocks of units and convert them into multimillion-dollar luxury whole-floor units.
Under the government’s affordable housing policy, a development can be approved to have up to 30% more floor space – usually extra floors – if 15% of units in the project are deemed “affordable”. This means they must be rented for 20% below market rent for 15 years.
Woollahra council this week voted unanimously to oppose the demolition of a block of 27 genuinely affordable studio apartments at 160 Oxford Street in Paddington, which developers want to replace with a nine-storey luxury tower containing 40 units.
About a dozen of the 40 units would be designated as “affordable housing” for 15 years – but the tower would result in a net loss of 15 to 17 genuinely affordable units, the Paddington Society said.
“The proposal reduces the amount of affordable housing in the area and will have an unacceptable impact on the surrounding heritage conservation area,” the Woollahra mayor, Sarah Dixson, and the councillor Harriet Price said on Facebook.
“We are especially concerned that that development will be waved through via the NSW government’s new fast-tracked state significant development application pathway, with very limited involvement from council and the community.”
The developer, Toohey Miller, did not respond to requests for comment.
The developers have applied to have the $78m development considered by the Housing Delivery Authority as “state significant”, meaning the NSW government would be the approving authority, not the local council.
Woollahra council is now organising submissions and a petition to try to block that designation.
In wealthier parts of Sydney, genuinely affordable units are being bulldozed and replaced with luxury blocks that include a small component of so-called “affordable” units. But they can fetch rents of $1,000 a week for a two-bedroom unit.
Spender said the definition of affordable used by the NSW government did not work in Sydney’s eastern suburbs, for example, where a two-bedroom unit can rent for upwards of $1,200 a week in a new building.
“If you have two childcare workers on $65,000 each sharing a two-bedroom flat [and] the ‘affordable’ flat is $1,000 a week, they are spending almost 50% of their post-tax income just on rent,” she said.
“The definition [of 20% below market rent] is meaningless in our area. It needs to be changed so that it is actually affordable.”
Jackson, the housing minister, has asked Housing NSW to look at the definition of “affordable housing” in the government’s housing state environmental planning policy.
But Spender said the matter was urgent because developments were being approved every day using the current regulations.
The City of Sydney won’t approve developments that lead to a reductions in dwellings of more than 15%.
Woollahra and Randwick councils are considering similar policies but neighbouring Waverley council has ruled it out.
“I’ve always been very clear that $1,000 a week is not affordable and that’s exactly why I’ve asked Homes NSW to review the current definitions of affordable housing,” Jackson said this week.
“That work is already under way. We need definitions that deliver genuinely affordable homes for working people and families.”
Leo Patterson Ross, the chief executive of the Tenants’ Union, previously said that NSW’s affordable housing policy was much less stringent than some in European cities and London.
He suggested extending the time period that units had to remain affordable from 15 to 30 years and pegging the rent charged to a person’s ability to pay, rather than a proportion of market rent.
