As development across the North Shore increases, the phrase “affordable housing” has become something heard more often; even if you’re not too sure what it really means.
The federal government isn’t too sure, either.
Despite the billions of federal investment into delivering more “affordable” housing across Australia, a precise definition of the phrase — crossing different programs and state borders — has never been provided.
For Bradfield MP Nicolette Boele, that’s something that needs to change.
What happened: In parliament on Monday, Boele introduced a bill calling for a “strict, consistent national definition” that would peg rents on affordable housing units at 30 percent of the household’s pre-tax income.
Boele said current definitions allowed developer’s units to be labelled “affordable” while being fundamentally unaffordable to anyone eligible for the scheme.
What’s in it: The bill calls for governments to ensure the affordability term is “not used unless it complies with this definition, so no one can go around affordable-washing”.
Boele claims this change is “critical to bringing host communities along the journey to absorbing more density in their suburbs and neighbourhoods”.
How does it work: In New South Wales, a developer can build higher and wider than regular planning restrictions would allow if they designate a certain portion of the project toward “affordable housing”.
For a complex of 100 apartments, this could mean 10-15 are subsidised.
How exactly these apartments are subsidised varies. In theory, the rent could be pegged at 30 percent of a tenants income, before tax; however, in practice, they are more often rented out at a market discount of 20–25 percent.
In high-rent areas — St Leonards, Gordon, Killara — this can still be far from affordable in a practical sense.
Boele is calling for a national definition so that housing can not be called “affordable” unless it reaches the benchmark of 30 percent of a household's gross income.
The Australian Institute of Health and Welfare defines rental stress as when a household spends more than 30 percent of income on rent.
What now? The Member for Bradfield has seen engagement from the government on this issue.
Responding to Boele in Question Time last week, Treasurer Jim Chalmers said the government had asked their economic advisors to look into “the different definitions and frameworks that currently operate across Australia, and to see what our options are for more consistency”.