Affordable Housing and Housing Affordability: What are the real drivers of Sydney s affordability crisis? What is the role of Local Government?

Transcription

1 Affordable Housing and Housing Affordability: What are the real drivers of Sydney s affordability crisis? What is the role of Local Government? Peter Phibbs. Henry Halloran Trust The University of Sydney Page 0

2 The Diagnosis The University of Sydney Page 1

3 The narrative Its just Economics 101: Sydney doesn t build enough houses. We need to increase supply to make housing affordable. For example: We know right at the heart of our problem with housing affordability is a lack of supply. Angus Taylor: Doorstop: Macarthur Railway Station, May The University of Sydney Page 2

4 The narrative The University of Sydney Page 3

5 Property Council Narrative Page 12 So why is the average home in Melbourne just $566,000, but $785,000 in Sydney? The answer is supply. Put simply, Melbourne has been far better in planning for and delivering new housing than Sydney for nearly two decades The University of Sydney Page 4

6 The Evidence: Economic Models What impact would additional new supply have on price? Dr Peter Abelson: If we increased housing supply by 50% we would reduce house prices by 2% (in real terms). PeterAbelson.pdf The University of Sydney Page 5

7 The Evidence: Australian Cities The University of Sydney Page 6

8 Evidence: Recent Australian Cities The University of Sydney Page 7

9 Gosh Its more complicated than Economics 101 The University of Sydney Page 8

10 Main Conclusion from AHURI Housing Supply Study Most of the growth in housing supply has been taking place in mid-to-high price segments, rather than low price segments. There seems to be structural impediments to the trickle-down of new housing supply. Targeted government intervention might be needed in order to ensure an adequate supply of affordable housing. (my bolding) Ong R et al (2017) Housing Supply Responsiveness in Australia.AHURI, Melbourne. Page 1 data/assets/pdf_file/0012/13242/ahuri-final-report-281-housingsupply-responsiveness-in-australia-distribution-drivers-and-institutional-settings.pdf The University of Sydney Page 9

11 Empirical Evidence - Ireland The University of Sydney Page 10

12 Empirical Evidence Sydney The University of Sydney Page 11

13 What should Councils be doing? 1. Looking for housing opportunities The University of Sydney Page 12

14 So what should Councils do: Keep on doing what you are doing- Pushing through a record number of housing approvals The University of Sydney Page 13

15 Gosh: where did the Property Council get that data from? The University of Sydney Page 14

16 What should Councils be doing? 2. Charging for uplift! (aka Economics 201) The University of Sydney Page 15

17 20% increase in yield- no charge! The University of Sydney Page 16

18 20 % increase in land costs The University of Sydney Page 17

19 What should Councils be doing? 3. Support the Greater Sydney Commission s Affordable Rental Scheme The University of Sydney Page 18

20 Support the Greater Sydney Commission s Affordable Rental Housing Inclusionary Zoning Targets Most global cities with housing affordability challenges have some form of inclusionary zoning It is now time that Sydney adopted a similar system It needs to be transparent and levied in a way that provides an opportunity to pass the charge back to the landowner and not crunch the developer The University of Sydney Page 19