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    Can zoning help create more affordable homes?

    First home buyers and low income renters will be interested in a new study that outlines ways to leverage the planning system to create more affordable housing.

    An Australian Housing and Urban Research Institute report, led by the University of Sydney, suggests that developers should be required to incorporate affordable housing when land is rezoned, and projects should be incentivised to offer affordable housing units for sale or lower rents. The research examined how land-use planning mechanisms could help supply affordable housing in Australia, and also studied the UK and US markets where inclusionary planning mechanisms for affordable housing are already in place.

    Almost a decade ago, NSW had introduced incentives for developers to produce affordable rental housing while South Australia introduced a 15 percent affordable housing target in 2005. In NSW, for instance, the voluntary incentive approach delivered around 1,300 affordable rental dwellings in greater Sydney between 2005 and 2016, equivalent to about 0.5-1 percent of total housing output for the period. The South Australian model, on the other hand, has yielded 2009 affordable homes to date, with a further 3,476 underway, representing around 17 percent of the state’s total housing output.

    Lead researcher Professor Nicole Gurran from the University’s School of Architecture Design and Planning explains that the general expectation in England and Scotland is for 20 to 40 percent of new housing developments to be affordable for low and moderate income earners to rent or buy. By consistently applying the planning requirements, a total of 83,790 new affordable homes were delivered in the UK between 2005 and 2016.

    A similar approach is being followed in South Australia where affordable homes are set aside for purchase by eligible households or social housing providers with the cost difference being factored into land values at the time of acquisition.

    NSW’s density bonus approach is to offer developers increased floorspace in return for affordable rental housing. These units are required to be rented to eligible households at 20 percent market discount for a minimum of 10 years.

    Inclusionary zoning refers to a requirement for the development to include a contribution for affordable housing, while density bonuses, as in the NSW example, offer incentives such as additional floorspace. Professor Gurran believes there is great potential to extend inclusionary planning approaches across Australia, with the affordable housing condition to be included when land is rezoned for residential development.

    The report ‘Supporting affordable housing supply: inclusionary planning in new and renewing communities’ was undertaken by researchers from the University of Sydney, the University of NSW, Curtin University and the University of Glasgow. 

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