Last month, two one-bedroom ‘affordable housing’ units in Stuart Street, Mullumbimby, were placed on the market.
The asking price for each? $420 a week.
For someone to pay this amount without spending more than 30 per cent of their income on rent (thus avoiding rental stress) they would have to earn $72,800 a year.
Such is the nature of ‘affordable housing’ in the Byron Shire.
A housing snapshot released by Anglicare last week shows that there is not one genuinely affordable rental property for people on government benefits being publicly advertised anywhere in the Shire.
A few days later, a study by the University of NSW revealed that the Richmond electorate (covering the Ballina, Byron, and Tweed shires) had the second-highest rate of rental stress of any electorate in the country.
The case of the two ‘affordable’ housing units in Mullumbimby highlights some of the main reasons why the system of building affordable housing in NSW is broken.
Developer The Kollective was granted approval to build the units under the state’s affordable housing planning policy, known as SEPP 70.
This meant that the proposal was granted exemptions from the standard floorspace ratio, parking, and open space rules in return for a promise that the units would be rented at 80 per cent of the market rate.
But from the moment The Kollective formulated the concept for the development it would have been clear that the two units were never going to be within the reach of most locals.
The entire block is geared toward upwardly mobile entrepreneurs running their own businesses, something The Kollective freely acknowledges.
Each unit comes complete with a home office/therapy space, air conditioning, and a loft bedroom.
The rents were never going to be cheap, and 80 per cent of $520 a week (the rent for the remaining six units in the development) is still an expensive rent.
Planning rule option
There is an option within the planning rules for a developer to set rates for affordable housing units at 30 per cent of the income for their ‘target group’, but they almost never take up this option because it works out to be less than 80 per cent of the market rate.
A community housing provider is required to manage the rental of the affordable housing units in such developments, but they have little or no say over what the rent will be.
Instead the provider effectively acts as a real estate agent, processing applications to make sure the tenants can actually afford to pay.
John McKenna, the chief executive of the community housing provider for the Stuart Street development, acknowledges that those on low incomes are left out of the picture.
‘The market will never provide housing for people on low incomes,’ said Mr McKenna, who is also the chair of the community housing industry association.
The director of The Kollective, Duncan Band, said his company made no secret of the fact that it was a profit-making enterprise that catered for moderate-income earners.
‘It is well documented that there is a large and growing demand for newly constructed housing for moderate-income-earning households in centrally located and well-serviced suburbs,’ Mr Band said.
‘We understand the need for low-income accommodation within the Byron Shire and surrounding communities, and we have partnered with not-for-profit organisations in assisting them with providing this housing.
‘Owing to the rising cost of land and construction, it remains the role of the government and community housing organisations to provide housing for very-low- and low-income households.’
Yet this seems to be at odds with the ministerial guidelines for affordable housing in NSW, which state that ‘affordable housing is housing that is appropriate for the needs of a range of very low- to moderate-income households and priced so that these households are also able to meet other basic living costs’.
But this worthy ideal does not apply to private developments such as The Kollective. Instead, it applies only to developments where a community housing provider owns the land, or manages it on behalf of the state government. Such developments are rarer than hens’ teeth in the Shire.
No govt subsidies
Mr McKenna puts it simply: ‘The only way to have subsidised housing in Byron is through government subsidies.’
But there are virtually none on offer.
Research from the City Futures Research Centre at UNSW demonstrates the stark consequences of this broken system for the Northern Rivers.
It shows that there is a current shortfall of 3,500 affordable housing units in the Northern Rivers, which is expected to increase by 1,500 by 2036.
Byron arguably sits in the eye of the storm.
On the weekend that the Anglicare snapshot was conducted, there were just 58 rental properties available across the entire Shire.
Not one was affordable for families or singles on benefits.
The comparison with the number of properties rented on Airbnb was telling.
The snapshot’s authors say, ‘In comparison to the 194 homes available for long-term rental across Ballina, Byron, and Tweed Heads, according to Inside Airbnb, there are 4,660 homes advertised for rent through Airbnb in this area’.
The vast majority of those homes were whole houses that stood completely empty 81 per cent of the time.
‘The picture is stark: Unless you are in receipt of at least the minimum wage, your chance of finding a home that will not place you under financial stress is fast approaching zero,’ the report stated.
Affordable housing promises to be one of the biggest issues at the upcoming federal election.
But do either of the major parties have a solution?
Neg gear reform
The federal member for Richmond, Justine Elliot, said that if elected Labor would reform negative gearing so that deductions could only be claimed on newly built homes.
She said this would ‘increase new housing supply and support jobs’ and ‘build 250,000 new affordable rental homes’.
‘Labor will support affordable housing for renters by offering 15-year subsidies – $8,500 per year – to investors who build new houses – conditional on their being rented at 20 per cent below market rent,’ Mrs Elliot said.
But as the case of Stuart Street, Mullumbimby, shows, a 20 per cent rent reduction still excludes anyone on a low income.
It seems we’re destined to see many more $420 a week properties that only the well-off can afford.