Redfern PCYC site work throws up interesting financial questions

Redfern PCYC site work throws up interesting financial questions

We have earlier drew attention to the Land and Housing Corporation (LAHC) decision to move from ‘Build to Rent’ to ‘Build to Sell’ on the Redfern PCYC site. It was interesting in the Council and Central Sydney Planning Committee (CSPC) discussion this change was hardly mentioned. Council has correctly said that the planning controls it produced do not determine how the development might be financed, only what will be built. LAHC claimed the density was not high enough to continue with its plan to deliver ‘Build to Rent’.

Council’s initial proposal for the Redfern site was for 10% affordable housing in addition to the 30% social housing proposed. The state government gateway determination changed that proposal back to 30%, including both social and affordable, with the request that Council and LAHC come to agreement about the social and affordable numbers within the 30%. Council decided to push the point on the ability of the project to deliver affordable housing in addition to 30% social housing. Council commissioned a Feasibility Analysis by AEC Group on the development.

Council then used that feasibility analysis to propose that at a normal developer margin of 20% the project could deliver 7.5% affordable housing on top of the 30% social housing. At the CSPC the NSW Government Architect argued that the developer risk was lower for redeveloping a government-owned site and that the original 10% affordable housing agreed to by Council and the CSPC, arguably should still be possible. Council staff argued that by sticking to an ordinary developer margin there was more chance that the 7.5% would get up.

The interesting question is – if the government decides again that only 30% social and affordable housing is to be provided, then where will the profit that LAHC make on the development go? The inference from the CSPC meeting was that given LAHC are only delivering a 30:70 social private development in the inner city in all likelihood LAHC is using the profit from these redevelopment to fund additional social housing in other parts of Sydney and the state. This may go some way to explaining why LAHC argues that 30:70 is the sweet spot as well as government policy. The Waterloo South Independent Advisory Group and now AEC Groups figures both show that LAHC developments at both Redfern and Waterloo can deliver far more social housing and or affordable housing than is proposed. In effect some of the land is being sold to fund housing elsewhere and not in the inner city.

The Aboriginal Affordable Housing Issue highlighted at Elizabeth Street

The PCYC Elizabeth Street Redfern proposal has also bought a focus back on Aboriginal affordable housing. REDWatch supports the principle that the redevelopments of all NSW Government- controlled land in Redfern and Waterloo should provide 10% Aboriginal Affordable housing to keep a viable Aboriginal community in Redfern Waterloo.

REDWatch has previously highlighted that Council’s policy is that 10% of the Affordable housing provided should be for Aboriginal people. This issue came to a head in the Council committee debate over LAHC’s Elizabeth Street redevelopment, which revealed that Council’s policy would only deliver 2 or 3 Aboriginal affordable Housing units in this development in the heart of Redfern.

In the end Council changed its recommendation from “consideration should be given to allocating 10% or more of the total number of affordable rental dwellings to be provided for Aboriginal and Torres Strait Islander housing” to “consideration should be given to allocating 10 per cent or more of the total number of dwellings to be provided for Aboriginal and Torres Strait Islander housing”. We welcome the change and but will have to wait to see how DPIE and LAHC respond to the recommendation.

During the discussion useful information about other steps Council is taking to lift the number of Aboriginal people in affordable housing was released. This included that Council is funding a dedicated Aboriginal Affordable Housing Engagement Coordinator to work with the three major Community Housing Providers operating in the local government area and as a result of the 160 social and affordable housing units in the recent Gibbon’s Street development 43% have been allocated to Aboriginal and Torres Strait Islander households. You can see the details of what Council is doing in this area in this Council Officer note to Council on Housing for Aboriginal and Torres Strait Islander Peoples as it related to the Planning Proposal for600-660 Elizabeth Street, Redfern.

Geoff has also written an opinion piece in the South Sydney Herald linking these two issues - Will LAHC’s redevelopment profit pay for Aboriginal affordable housing?