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Sydney’s ‘global’ vision bad news for local housing affordability

The forecast is grim for housing affordability in Sydney, according to a recent government briefing paper. In the last decade median rent for all properties in the inner ring of Sydney more than doubled…

The vision for a “Global Sydney” overshadows the need for affordable housing in the city. James Morgan/AAP

The forecast is grim for housing affordability in Sydney, according to a recent government briefing paper. In the last decade median rent for all properties in the inner ring of Sydney more than doubled from A$195 to A$560.

We can expect little policy movement on private housing subsidies by the federal or state governments. Negative gearing has increased the wealth of middle and high income Australians. Developers endlessly lobby governments for taxation concessions. No major political party would dare propose reform.

Whether the Sydney Metropolitan Strategy has been successful in providing affordable housing is debatable. The strategy does more to underwrite the problem of housing affordability than address it.

The strategy, part of the “Global Sydney” vision from the NSW State government, is almost 10 years old. Updated government forecasts suggest Sydney’s population will grow to 5.8 million by 2031 - approximately 200,000 more people than predicted in 2010.

Young (under 15) and elderly (over 65) people will account for the biggest growth rates. People aged 18-25 are already feeling the housing affordability squeeze. As are elderly private renters.

The Global Sydney vision

The strategy set out plans for the provision of 770,000 additional homes, 760,000 new jobs, and new transport networks to meet the demands of a growing city.

In 2005 the NSW Premier stated in the opening pages of the strategy text:

Sydney is Australia’s only truly global city and one of the world’s great metropolises.

At the national level, the globalisation of Sydney is inevitable and useful in geo-political and economic terms. But at the local level, the Global Sydney vision leads to costs and benefits for different social groups. The government’s eagerness to position Sydney as a global city has important local repercussions for urban planning and affordable housing provision.

Crucially, it represents a fundamental reorganisation of the way we think about the city. Rather than thinking about Sydney as an urban space within which the rights of the city’s inhabitants might be protected, the global city of Sydney is pitched as facing the harsh economic realities imposed by the global world.

Global cities and urban zones

Central to the vision is an assumption that global cities move foward to betterment. Ideas such as social progress, economic growth, and increased property prices are all contingent on moving the city from its blemished past to an improved future.

In Sydney, this has resulted in a rethink of the purpose of the greater Sydney region. Some sections of the city were promoted as sites that could be used to capitalise on specific locational advantages, such as “growth centres” and “business parks”. Visually, the city was represented as a network of zones made up of a “global economic corridor” connecting the “powerhouse of Australia’s economy” to the “airport”, “major shipping networks”, and the “shopping districts and malls” within the “regional hubs”.

Th Sydney Metropolitan Strategy highlights key regions for economic activity. NSW Government

The strategy commodifies the urban space of the city. In other words, the various zones of the city are thought of as a tool through which the government might better integrate Sydney into the global economy. But to enable this Global Sydney vision, changes had to be made at the local level.

Urban renewal, housing affordability and privatising public property

Historically, public housing has been a key housing affordability policy mechanism. Evaluated through the Global Sydney vision and metropolitan strategy public housing estates are portrayed as outdated places that are preventing the future economic progress of the city.

NSW Department of Planning and Infrastructure says:

What do we mean by renewal? Renewal is not simply about increasing housing densities. Urban renewal is about transforming under-used or dilapidated areas…

Sydney has many underused or dilapidated areas, but how the Department measures these two criteria is important.

For example, in terms of land-use planning, many consider the low housing density profiles of some Sydney suburbs close to the city and transport centres to be an underuse of urban space. “80% of the city will be untouched” by the strategy argued Professor Bill Randolph in 2006.

There has been local resistance to housing affordability programs that threaten to impinge on the housing landscapes of wealthier Sydney suburbs.

In the strategy, measuring an underused or dilapidated area was conditional on the commodification of urban space. A place is defined as underused or dilapidated so that it can be redeveloped to extract a financial return from this undervalued urban commodity.

In the case of public housing estates, they are not defined as dilapidated to provide much needed maintenance, or as underused to increase the public (i.e. affordable) housing supply. Estate redevelopments do not revitalise the rights of poor urban populations.

Instead, they label these urban spaces as “economically unproductive” and the tenants as socially dysfunctional. Both the housing stock and tenants are thought of as dilapidated.

Announcing a public housing estate redevelopment by public-private partnership in 2005 the state government said, “much of the public housing stock is either at the end of its economic life or requires significant refurbishment”. They suggested that public housing estates were “burdened with more than their share of problems, made worse by low concentrations of private housing”.

During redevelopments, changing the housing-tenure profile or dispersing tenants across the city in pursuit of global city credentials, irrespective of the disruptions to the often long-term residents of these estates, is justified.

Australia needs a new housing vision

The strategy’s criterion for defining urban spaces as underused or dilapidated means public housing and tenants are viewed as part of the city’s dilapidated past. It also reinforces private and non-government housing as part of the city’s global future.

Infilling affordable housing projects into the parts of the city where it is most needed has generated strong local opposition within this context. This threatens the rights of low-income citizens to long-term affordable housing in the city.

Reducing public housing supply, increasing non-government housing supply or providing taxation concessions for mum and dad investors and developers has not addressed the housing affordability problem in Sydney.

Australia needs a new housing vision from which progressive affordable housing policies can be built. A vision that is not conditional on private housing subsidies and the privatisation of public property.


This is the fifth piece in our Housing 2020 series, exploring the major policy issues facing housing over the next five years. Click on the links below to read the other pieces.

How Australia’s ageing population could push house prices down

Your home as an ‘ATM’: home equity a risky welfare tool

Explainer: why negative gearing is bad policy

Aussie rules for overseas buyers won’t solve London’s housing bubble

Join the conversation

12 Comments sorted by

  1. R. Ambrose Raven

    none

    Public (not social, public) housing is what we need:
    . 1. government must have a greater, not a lesser, role in direct provision of public housing, if any genuinely affordable housing is to be available,
    . 2. efforts by housing associations and co-operatives to increase their significance through all sorts of subsidy and finance schemes – usually with the inevitable government guarantee – will be neither affordable nor significant, except in improving NGO CEO power, pay, and status…

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    1. alfred venison

      records manager (public secotr)

      In reply to R. Ambrose Raven

      i agree - get rid of negative gearing - its inherently unfair. and heavy tax on unutilised vacant property and unoccupied liveable residences. -a.v.

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  2. Jenny Goldie

    president at Sustainable Population Australia

    Oh come on. The real reason that Sydney has become increasingly unaffordable is because of high population growth and new housing not keeping pace. Now, of course, there's only one way to go but up because the Sydney is hemmed in by ocean to the east and national parks to the south, west and north. Natural increase (births minus deaths) is partly responsible but 60% of Australian population growth - and we may assume Sydney's - is from net migration which is almost a quarter million people a year now (244,400 in the year ending June 2013). If we could dramatically cut skilled migration, let's say halve it, then it might allow some catch-up in housing and in turn stabilisation of house prices, be they for sale or rental.

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    1. Frank Moore

      Consultant

      In reply to Jenny Goldie

      Absolutely correct Jenny Goldie.
      The slime caught up as spruikers for population growth all have one thing in common: The want their businesses to have a subsidy.
      No, they don't want to succeed on the international stage - in international markets. No, they want a taxpayer subsidised market to be grown for them here.
      What do we get as a result? No funds for peanut level subsidies for manufacturers (who, surprisingly, actually export at modest levels) - but billions are spent subsidising the welfare of (mostly overseas sourced) slimy property developers.
      No import orientated business person should have any lobbying rights to media (import advertisers) or politicians.
      Something has to stop this debacle.

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    2. James Hill

      Industrial Designer

      In reply to Jenny Goldie

      But Jenny, how can you have high interest rates on high loans without an artificial demand that exceeds the supply?

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    3. Jenny Goldie

      president at Sustainable Population Australia

      In reply to Jenny Goldie

      Oh James, you're sure getting to the nut of the problem, namely, how to deal with the debt bubble when energy is becoming increasingly expensive so economic expansion/growth to pay off the debt is thus increasingly problematic.

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    4. grant moule

      Manager

      In reply to Jenny Goldie

      I agree that immegration is not helping the housing problem. However, I believe that the favourable tax treatment of housing such as negative gearing, and foreign ownership rules have turned housing into a speculative venture. This is one of the main reasons housing prices have become unaffordable, too many houses owned for speculation only.

      Also the same problem does affect the rest of Australia, we have one of the heighest ratios of median income to median house price in the developed world.

      Many people make use of median house hold income rather than individual income to make this ratio look better. It reduces the ratio for recent years due to the increase of the number of working people per household. It is not a true measure for the actual price of housing which is very high here. Median house price to median income is over 9x for Sydney, where a figure of over 3x is often said to be unaffordable.

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  3. David Arthur

    resistance gnome

    Seems to me, it's about time a cap was placed on Sydney's population - so for every new residential bedroom that's constructed, another one needs to be demolished.

    If Australia wants to have more people, then additional people should not be in Sydney; new cities, somewhere else.

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  4. James Hill

    Industrial Designer

    Affordable housing is not just some sort of "need", it is an economic imperative.
    Without it there will be no economy, unless the "service" workers are to all be replaced by robots which do not need their own "affordable" homes and families.
    On that front, in default of said mechanical robots, will the Sydney of the future look like the Gulf State cities with guest "robotnik" workers imported at least cost from areas with an "over-supply" of human beings?
    A Global City? Certainly an un-Australian one.

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  5. MItchell Lennard

    Researcher - Distributed Energy Systems

    All good but lets not get confused between Sydney's problems and the rest of Australia.

    The author seems to interchange references to Sydney specific issues and Australian general issues far to easily. This is a problem that causes confusion in much political debate and a problem that is re-enforced by the Sydney centric nature of the national media

    Sydney has many problems, but these are not necessarily shared by the rest of NSW let alone the rest of the country. Its bad enough our federal politicians see all issues through a Sydney basin prism, the rest of us need to be more circumspect.

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  6. Chris Baulman

    logged in via Twitter

    I agree Dallas, but the problem is not just a "Sydney" one, it's the same in every "centre" around the world. The cause, as you say, is that centres are business based and business, a competitive rather than a cooperative way to meet needs, must now compete globally. To do so they need to become ever more ruthlessly "efficient", excluding every possible inefficiency, especially people who are not at the top of the game.

    Undeniably, business has brought western nations many benefits, but with globalisation…

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