NSW Labor's 30% housing pledge meets a 5% reality in North Sydney

North Sydney residents are protesting the development of a new 24-storey apartment complex on 52 McLaren street. Noise pollution, increased traffic congestion and spoiled harbour views are among their gripes.

In the background, however, there is another issue at play. It hasn’t received as much focus, but goes to the heart of a 2023 pre-election promise by Labor to factor affordable housing into new housing developments built on public land.

Labor promised that all such housing developments would have 30 percent affordable dwellings built into any construction, in perpetuity.

However, developers of the McLaren Street high rise — which has been approved by North Sydney Council — only intend to put aside five percent of the apartments for affordable housing, and only for 10 years.

In real terms, 30 percent of dwellings in the development would equate to approximately 52 apartments. Five percent would see approximately nine apartments designated as affordable.

So why did they vote for it?

In 2022 all three tiers of government signed the National Housing Accord. Seeking to ease  the housing crisis in Australia, the accord has the stated aim of constructing 1.2 million “new, well-located homes” by 2029.

This has seen the NSW government put pressure on councils to increase housing stock to meet growth targets. 

Therefore, while a number of councillors were opposed to the development — the failure to meet the 30 percent quota was mentioned — nearly all voted in favour to approve the high rise, with state housing requirements cited as among the reasons why. 

As seen in other developments — such as this 22-storey Crows Nest building on Falcon Street and the Pacific Highway — even if council rejects a proposal, it can still be approved by the NSW Independent Planning Commission.

What is affordable housing?

Unlike social housing, affordable housing does not have a clear definition spanning state and council jurisdictions. The NSW Planning Department defines it as housing “for very low to moderate income households” that is “available for rent at a lower price than usual market rent”.

A broader range of income levels can apply for affordable housing than social housing. In Sydney, a single-resident household earning up to $80,700 annually can apply for affordable housing.

The rent on these affordable dwellings are either priced at 75-80 percent of market price, or capped at 25–30 percent of household income.

Some affordable housing, such as those in built-to-rent housing developments, specifically accommodate local essential workers, such as nurses, teachers and first responders.

Labor’s about-face

In the lead up to the 2023 NSW state election, Labor made two key commitments regarding housing. One was a statewide audit to identify “surplus public land that can be rezoned for housing and associated uses”. The second was that any developments made on this surplus public land would include “a minimum of 30 percent affordable, social and universal housing”.

This development isn’t the first to expose the holes in Labor’s promise. When the Minns Government sold off parcels of public land to private developers last year — with no requirement for social or affordable housing —  it defended the decision by stating that the  30 percent figure would be determined as part of a larger plan, not on a site-by-site basis.

"The consistent advice government has received since taking office is that imposing a 30 per cent target on each site would deliver less social and affordable housing, less housing overall, and would do so at significantly greater cost," NSW Housing Minister Rose Jackson told the ABC at the time.

Before reluctantly approving the development at last week’s council meeting, Mayor Zoë Baker criticised this defence, pointing out that in similar developments — such as housing built on top of Crows Nest metro station — a higher proportion of affordable housing has been secured in perpetuity.

“It is outrageous that a site that is a state-owned piece of public land in a housing crisis has five percent [affordable homes] for 10 years,” she said.

Image Credit: AAP, North Sydney Council