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LAHC profit on 600 Elizabeth Street Redfern to fund social housing across the state at cost of affordable housing

The Department of Planning and Environment (DPE) have now finalised the planning controls for the 600-660 Elizabeth redevelopment. Council has been unsuccessful in forcing its recommended 7.5% affordable housing on the site in addition to the 30% social housing proposed by LAHC. The approved planning controls are for a minimum of 30% affordable housing (which includes social housing).

The amendment to the Sydney Local Environment Plan 2021 says “(i) at least 30% of the gross floor area used for the purposes of residential accommodation will be used for the purposes of affordable housing, and (ii) the affordable housing will be provided by or on behalf of a public authority or a social housing provider”

Key to the DPE decision was a submission from the proponent the NSW Governments Land and Housing Corporation (LAHC) to DPE after Council submitted its proposal for final DPE approval.

In that submission LAHC argued that the Council proposal had not taken into account that they were a self-funding organisation and that the proposed affordable housing prevented them from using funds from the development to build social housing elsewhere in the state.

While long suspected and mentioned in REDWatch’s comments on the 2021 Central Sydney Planning Committee, it is now clear that LAHC’s self-funding model includes using money made by it on sites like Redfern to fund the delivery of social housing in other parts of the state.

The finalisation report quotes LAHC as saying:

  • The proposed requirement for 7.5% affordable rental housing in addition to 30% social housing ignores the self-funded nature of LAHC and reduces the ability of LAHC to deliver more than 30% social housing, on or off site. P13 and
  • The analysis does not consider how much additional social housing could be delivered off-site if the additional 7.5% affordable rental housing is not required and it decreases the land value of the site. P14 

DPE Finalisation report summarises this as “LAHC have raised concerns the Study makes assumptions not discussed with LAHC, ignores the self-funded model LAHC operates under and does not consider how much additional social housing could be delivered off-site if the 7.5% affordable rental housing is not required. P18”

The DPE assessment then concludes that “Given the proposal already delivers substantial public benefit through the delivery of new affordable housing and replaces and provides additional community facility floor space, the Department considers also requiring 7.5% affordable rental housing is unreasonable.”

In another change to Council’s proposal the PCYC will be removed from the site rather than remain until a new facility is built.

This aspect of the LAHC business case being made public highlights potential conflict of interests between investing in the kind of long term activities needed to ensure a high density development succeeds and its need to use the development as a fund raiser for other developments throughout the state.

This is not just the selling of off public land to renew housing stock in the inner city that many, including REDWatch have opposed, it is also selling off some off this public land to fund social housing in other locations around the state. It probably puts a priority and premium on inner city redevelopments as they are a way of making money to fund housing elsewhere. It also explains why LAHC are so adamant about only delivering 30% social housing on public inner-city land that can support more – anything over 30% goes into kitty to build in lower cost locations rather than into the inner city.

The report is a useful read to understand what LAHC has argued and when and how this has been taken up by Council and DPE when the finalised the proposal. While the finalisation report does not see any correspondence between the Redfern and the Waterloo South redevelopment, it is difficult to see how at least some of the same approach by LAHC will not be carried over to Waterloo South even if it is not articulated.

This article is based on the “Plan finalisation report – PP_2020_SYDNE_004_00, Sydney Local Environmental Plan 2012 Amendment 75 - 600-660 Elizabeth Street, Redfern of February 2022” which is held by REDWatch. As soon as we have a link for the report we will post it. The new planning controls were published on 18/2/22 and can be found at https://legislation.nsw.gov.au/view/pdf/asmade/epi-2022-50.