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NSW Planning Department Housing Targets & Its Impact On Housing

Posted On Wednesday, 08 March 2023 20:04
NSW Planning Department Housing Targets & Its Impact On Housing

It’s anticipated that two-thirds of Sydney’s councils will fall below the 2021-2026 housing targets for building new homes, exacerbating the city’s affordability issues. This projection for the five-year development plan of Sydney will result in a shortfall of almost 50,000 homes, direly missing housing targets for the second time in the last ten years. 

This shortfall might spell further bad news for renters, homeowners, and prospective homeowners all around the city. Whether it’s buying or building homes, Sydneysiders have experienced record-breaking costs for new houses for sale over the past ten years, and these projections will certainly not mitigate the issue.

Two-Thirds of Sydney Councils Miss Housing Targets

With such an incredible shortage of houses in Sydney to be built over the next five years, everyone involved in the property market will be anxious to see how house prices may fluctuate. 

It's important to note that not all Sydney councils face the same housing shortage. 10 of the 33 Sydney councils are on track to meet or exceed their housing targets, while the rest are falling short. Here’s a quick look at the performance of some local councils:

Parramatta City Council

Parramatta is set to fall over 12,000 properties short, failing to reach its goal of 23,660 homes by 2026. 

The City of Sydney

The Sydney City Council is projected to miss its goal of 17,033 homes by 8,408.

The Hills Shire

The Hills are set to exceed its goal by 5,375, building 14,375 new dwellings. They are the most significant achiever in new development projections. 

Sutherland Shire

Sutherland is projected to exceed its goal by 1,905 properties, totalling 8,905 new properties. 

The Impact of a Shortfall in New Housing Construction

The lack of new housing construction in Sydney is a pressing issue affecting housing affordability and residents' overall quality of life. With two-thirds of Sydney's councils projected to miss their housing targets for the next five years, it's essential to understand the full impact of this shortfall on the city and its residents. 

House Prices

The high cost of housing in Sydney is already a significant concern for many, and with fewer new homes being built, prices will likely continue to rise. These rising costs can make it difficult for people to find affordable housing, particularly those on lower incomes or just starting in the housing market.

Urban Sprawl

As more people are forced to live further away from the city to find affordable housing, the demand for services and infrastructure in these areas will increase. These increased needs can strain local governments and lead to an overall decline in the quality of life for residents. Urban sprawl can also contribute to traffic congestion, air pollution, and loss of green space.

Renting

The need for more new housing also affects renters. It becomes more challenging for renters to find affordable housing when fewer new homes are developed, as competition for rental properties and rental costs rise. These high housing costs can limit people's ability to save, invest, and spend money with disposable income.

Social & Economic Diversity

The need for more new housing construction can also lead to reduced social and economic diversity in neighbourhoods. Many low-income families are forced to move further away from the city centre, resulting in less diverse and inclusive communities.

Local Businesses

The lack of new housing construction may also impact local businesses that rely on steady demand for new homes to maintain operations. Small businesses in retail and hospitality get affected, as do larger home building and trades businesses. As the housing market is one of the most critical drivers of the economy, it's vital to address the housing shortage to ensure the economy is not further affected amidst rising inflation and high-interest rates.

Addressing The Housing Shortfall

It isn’t all doom and gloom for Sydneysiders, however. It's certainly a tall order to solve Sydney's housing crisis, but one solution worth considering is building up rather than out. And by "build up", we mean reviewing and amending the existing planning and zoning laws.

The Role of Planning and Zoning Laws in the Housing Shortage

Planning and zoning regulations are crucial for managing land use and ensuring that the structures that can be developed there are appropriate. These regulations often cap the number of houses built on a piece of property and may restrict the types of housing that can be built, such as single-family homes or high-rise apartments. This cap might make it difficult for developers to construct popular home designs, such as affordable housing or multi-unit residences, aggravating Sydney's housing problem.

Allowing for Denser Housing Developments

One solution to the housing shortage is allowing denser housing developments, such as multi-unit dwellings. Increasing the number of homes allowed to be built on a given piece of land makes it possible to build more homes in a given area. This increase can help to address the housing shortage and provide more affordable housing options for Sydneysiders.

Importance of Reviewing Planning and Zoning Laws

Reviewing and amending the existing planning and zoning laws is crucial to address the housing shortage in Sydney. By making it easier for developers to build the types of housing that are in high demand, local governments can help to address the housing shortage and ensure that everyone has access to affordable, quality housing.

Implementation and Challenges

While reviewing and amending the existing planning and zoning laws can solve the housing shortage, implementing this solution can face some challenges. Reviewing and amending the laws can take a significant amount of time and resources, and there may be resistance from local communities or developers. Local governments need to address these challenges, consult with all stakeholders and plan accordingly to ensure the smooth implementation of the reviewed laws.

Future Outlook

With mounting pressure on local governments to provide more affordable housing in Sydney, there certainly will be reforms to planning and zoning laws. As monitoring for year one of zoned housing capacity is being evaluated for 2021-2026, you can expect to see new infrastructure projects in the pipeline.

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