Business Illawarra housing report puts spotlight on actions

Having just delivered a report, prepared on behalf of Business Illawarra and in conjunction with local councils, property groups and major employers, outlining the crisis facing the region and the raft of solutions that are available to governments to fix the issue, Dr Judith Stubbs laid down the gauntlet to politicians across all levels.

"Never has so much been written and spoken about and so little done," Dr Stubbs said.

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"We've got to move beyond the rhetoric, we've got to have political will and really strong leadership and make this a priority."

There were many arresting statistics is Dr Stubbs's report, but perhaps the stand out was that the region saw rents significantly increase in the three years to 2022, including by over 10 per cent in Shellharbour, while rents across NSW fell, leading those in the Illawarra key workers to spend on average 40 per cent of their income on rent, compared to 30 per cent statewide.

Despite this significant pain being inflicted on households across the region, As Dr Stubbs pointed out, many of the solutions are available to local, state and federal governments - and have been done before.

For example, with all three major hospitals in the region set for an overhaul, Dr Stubbs said it was incumbent on the state government to include housing for health workers, just as nurses quarters were an essential part of hospitals when they were first built.

"We need to go back to that kind of thinking, for example, all large infrastructure projects need to have a good amount of affordable housing."

NSW Planning Minister and Wollongong MP Paul Scully said the Minns state government had instituted a raft of measures since being elected earlier this year, including reforms to accelerate housing delivery by state bodies and the private sector, but acknowledged there was more to do.

"No one, not the private sector or the public sector alone is going to solve this problem," he said. "There's more for [state government developer] Landcom to do, and there'll be more announced in the future."

Being the level of government closest to those affected in the Illawarra-Shoalhaven and significant land holders in their own right, the report notes the particular levers that councils have to pull.

These include mandating affordable housing as a proportion of new developments, and using council-owned land to develop affordable housing, at a return to the ratepayer.

Dr Stubbs emphasised that councils currently have the powers to make significant change, but were often not utilising these to the extent permissible. For example, Byron Shire on the NSW North Coast updated the Local Environmental Plan in January this year to include an affordable housing contribution scheme, where a 20 per cent of land is set aside when areas are rezoned for additional development to provide affordable housing in perpetuity.

Councils in the Illawarra-Shoalhaven region have a diverging approach to providing housing and affordable housing in particular.

Currently, Shoalhaven City Council has a distinct Affordable Housing Strategy, which, adopted in 2018, sets out a number of strategies with the aim to increase affordability and the number of social housing in the LGA.

However, so far, the strategy has been unable to meet its identified key performance indicators, including with the Shoalhaven losing eight per cent of its social housing stock between 2011-212 to 2019-2020 and seeing rates of housing stress increasing.

A Shoalhaven City Council spokesperson said the local authority was working with partners to respond to heightened housing stress.

"We will continue to actively work with Community Housing Providers on the direct provision of much needed affordable housing, including Southern Cross Housing who we are currently partnering with on a 39 unit affordable housing development in the Bomaderry Town Centre and where Council donated the 4000 sq metre parcel of land to help facilitate the outcome," the spokesperson said.

The spokesperson said council was considering a formal developer contribution scheme for affordable housing.

Moving north, Kiama is yet to formally adopt its Local Housing Strategy, which it was required to adopt by June 30 last year. The Kiama Council website indicates the strategy will be adopted by October 2023 and it is currently on exhibition for community consultation.

Kiama Council's director Planning, Environment & Communities Jessica Rippon said the LGA was aware of the need for affordable housing for key workers.

"We are actively developing housing solutions and strategies for our Municipality."

The LGA has only one designated affordable dwelling, on land owned by Council and leased to community housing provider the Housing Trust. The unit is in urgent need of redevelopment, having reached the end of its life, and council is exploring a renovation which would increase the number of dwellings on the site.

"We are actively seeking for both this and other opportunities to improve and enhance our existing stock and encourage affordable housing development within our region for key workers, in whatever way we can."

The need for affordable housing in the LGA, which is facing a shortfall of 219 social housing dwellings according to Dr Stubbs' report, has caused rifts in council in the past. Independent councillor Warren Steel said in 2021 the days of affordable housing in Kiama "were gone", however Labor councillor Imogen Draisma campaigned on introducing affordable housing targets to the Kiama housing strategy.

The Shellharbour Housing Strategy, adopted in 2019, identifies the need for more affordable housing and acknowledges the low levels of affordable housing for those on low incomes, however does not set targets for the provision of affordable housing. The Strategy suggests Shellharbour adopt specific affordable housing policies, however none have yet been developed.

A Shellharbour council spokesperson welcomed the report and highlighted recommendations were made at all levels of government.

"Council looks forward to working through these recommendations with the Chamber and determining how best we can work collaboratively to increase the supply of affordable housing," the spokesperson said.

In Wollongong, the council developed a draft Housing and Affordable Housing Options Paper which would inform a draft Housing and Affordable Housing Policy. The options paper was exhibited in 2020 and the feedback noted by council in 2021. The summary of the feedback on the affordable housing strategy noted that council was limited in what it could do.

"Council has limited ability to improve affordable housing outcomes as it relies on Federal and State policy settings," the agenda item notes.

Wollongong Council adopted its Housing Strategy in February this year which included actions to develop an Affordable Housing Development Contributions Plan, which would levy developments to provide affordable housing in the LGA, waive fees for affordable rental housing delivered by registered providers, mandate a minimum of five per cent affordable housing in new residential developments and three per cent of floor space in developments of more than 20 units be affordable rental dwellings, or equivalent funding provided. The Strategy said targets would be set at a state-government level.

Council is recommending a tender for the provision of affordable housing services to head Start Homes, which would support homebuyers to put down a deposit, to councillors on Monday.

"Regardless of the outcome from Monday night's meeting, Council remains committed to considering innovative partnership opportunities as, and when, they emerge and this commitment is embedded in the adopted Housing Strategy," Lord Mayor Gordon Bradbery said.

Wollongong City Council general manager Greg Doyle said any resolution would require all levels of government and the private sector to work together.

"There are a lot of pieces to this puzzle to deliver the right outcomes for our community and we all need to come to the table and collaborate," he said.

CEO of the Housing Trust Michele Adair said governments, including local governments had a role to play in leading the conversation on affordable housing and that councils in the Illawarra had been laggards when addressing affordable housing requirements.

"They have not had innovative, proactive, strategic, courageous conversations about their plans, and about how to take their communities and business with them," she said. "They have not done it."

Finally, the report also exhorts the private sector to become more involved in the provision of housing through leading by directly building affordable housing but also stopping from land banking - a process by which developers hold off redeveloping a site, whether awaiting larger returns or the ability to consolidate a development across a number of sites. Business Illawarra executive director Adam Zarth said it was an issue identified through consultations.

"Land banking for its own sake, sitting on land or not developing land in an expeditious way is obviously not something we want to see."

The report also suggested meanwhile use of private sector assets for short term or temporary housing, such as in the case of aged care homes waiting to be redeveloped. A report from the Property Council found one fifth of office space in the Wollongong CBD were vacant, the highest of any CBD in Australia.

Mr Zarth said that while turning empty office blocks into housing would require the rezoning of the underlying land, "we would encourage this opportunity" as long as it did not reduce productive employment lands.

"If we want a dense Wollongong city centre and Nowra city centre and we want a density of commercial activity to create vibrancy," he said. "We need to not let it go and become residential, on the other hand, on the city fringe, if there's commercial that can be rezoned and redeveloped as residential that's absolutely the sort of ideas that we need to be pursuing."

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