A Shared Responsibility: The plan to begin addressing the housing crisis in NSW

The Minns Labor Government is delivering on its commitment to address the housing crisis by rebalancing housing growth across the state with a focus on well-located homes close to transport, jobs and existing infrastructure.

The Housing Crisis

Housing is the biggest single cost of living pressure people are dealing with right now, with mortgage payments or rent the largest expense for most households.

But housing supply isn’t keeping up with demand.

Last year NSW recorded fewer overall completions than Victoria – despite NSW’s higher population, producing about six homes for every 1000 people each year, compared to eight in Victoria and nine in Queensland.

Despite NSW having the largest population, the largest expected increase in population, the highest rents and the highest medium house prices, NSW is last on the east coast when it comes to housing completions.

NSW completed 48,000 new buildings in 2022. This was behind Victoria with 59,000 completions – despite our state’s higher population.

The NSW Labor Government also inherited development application processing times that had slowed to an average of 116 days in March 2023.

The housing supply shortfall is behind Sydney unit rents increasing by 24 per cent over the year to the end of September 2023, along with house rents lifting by 11 per cent.

Back in the early 1980s, the average house in Sydney cost $78,900, or about five times a full-time average wage. Now, the price of a typical Sydney house is 17 times more expensive and is 14 times the average income.

The NSW Government believes if we are going to tackle this crisis, to create more housing supply that will drive down the cost of renting or make buying a home more affordable, we need more homes, our city will have to change.

Transport Orientated Development Program

Tier One – Accelerated Precincts

The Minns Labor Government has identified eight Sydney transport hubs for accelerated rezoning for the delivery of up to 47,800 new, well located, high and mid-rise homes over the next 15 years.

Bankstown, Bays West, Bella Vista, Crows Nest, Homebush, Hornsby, Kellyville and Macquarie Park will all undergo rezoning by November 2024 to provide significant uplift and support new homes within 1200m of these Metro and rail stations.

To speed up the delivery of homes over the next 5 years, developers will be able to access a new State Significant Development pathway for proposals of $60m or more, and construction will be required to start within two years of approval.

Affordable housing held in perpetuity will make up to 15 per cent of homes in these locations to make sure essential workers like health workers, teachers and hospitality workers can live closer to work.

Tier Two – Rezonings

The Minns Labor Government is also announcing it will snap rezone 31 locations across NSW allowing for 138,000 new homes to be created within 400m of Metro or suburban rail stations and town centres to make residential flat building permissible in all residential zonings

The stations are: Adamstown, Ashfield, Banksia, Berala, Booragul, Canterbury, Corrimal, Croydon, Dapto, Dulwich Hill, Gordon, Gosford, Hamilton, Killara, Kogarah, Kotara, Lidcombe, Lindfield, Marrickville, Morisset, Newcastle Interchange, North Strathfield Metro, North Wollongong, Rockdale, Roseville, St Marys Metro, Teralba, Tuggerah, Turrella, Wiley Park and Wyong.

These locations have been identified as being capable of accommodating new homes within existing enabling infrastructure.

Low and Mid Rise Reforms

Today’s announcements build on the changes the government announced last week that will also allow for different housing types like residential flat buildings, manor houses, terraces, and duplexes in these locations.

Currently, each local council has its own rules for what kind of homes can be built in their area. Mostly, these rules don’t allow the types of homes that can add density to local town centres and transport hubs.

As a result, the State government is setting the expectation for councils so that more homes of different types are built in areas close to transport.
This will also mean that councils can't say no to certain types of buildings, like terraces, residential flat buildings, manor houses, duplexes, and semi-detached houses in locations that are zoned for them. If a council changes its rules to match the new state rules, then the state government's rules won't apply to them anymore.

But if a council doesn't change its rules, then the State government's rules will continue to apply to confront the housing crisis.

These changes are in addition to the recently announced pattern book approach which will provide planning certainty through agreed housing designs.
Pre-approved designs, selected through the pattern book will access an accelerated pathway allowing for faster delivery of much needed housing and greater certainty for developers.

Building well connected communities

The NSW Government knows that growing communities deserve well-designed suburbs close to schools, healthcare, shops, transport, parks and jobs.

To make sure that homes are built in places where people want to live, the NSW Government is providing $520 million within the Tier One Accelerated Precincts for community infrastructure, such as critical road upgrades, active transport links and good quality public open spaces.

Developing new entertainment hubs including restaurants and cafes, including outdoor dining, and live entertainment venues will also help create vibrant and active precincts with great amenity. The Government will use the already legislated Housing and Productivity Contributions system to ensure some of the value created by Government investments will fund future infrastructure.

Premier of New South Wales, Chris Minns said:

"When I was young and graduating from high school, the key question my friends and I asked each other upon graduation was: “Will we ever be able to afford to buy a house in Sydney?"

"The question for many these days is “Will I even be able to afford to rent a place here?

"The simple truth is we don’t have enough well-located homes for the people who make up our city – and that has to change if we want our kids to be able to afford a home in Sydney and not leave for other states.

"But to do this, we need to reset our planning system so we can bring forward and scale up housing delivery.

"I want NSW to be a state that is affordable for the next generation of kids with great transport options to make work and life easier."

Minister for Planning and Public Spaces Paul Scully said:

"The housing crisis means all levels of government and industry need to step up to our shared responsibility to get more people into homes faster and meet our collective National Housing Accord commitment.

"These sites have been selected because they have infrastructure to build on and for that reason they will access a State Significant Development pathway that speed their approval'

"Today’s announcement works together with recently announced reforms to create more low and midrise housing, as well as our budget commitments of $520m and the infrastructure contribution reforms. They are critical pieces of our plan to create more well located homes and to do it faster.

"We can’t continue to turn our back on the next generation of young people who are undoubtedly being hit hardest by the housing crisis.

"These homes will also create choice, so essential workers can live close to their jobs in the type of housing they want.

"Housing choice means not everything is highrise. We're focused on building well designed communities, rich with diverse housing types.