The City of Sydney has put the building blocks in place to encourage the development of more rental housing as it looks to construct a solution to the city’s rising housing crisis.
With rental vacancy rates within the harbour city currently at their lowest in the last decade, Sydneysiders have felt the financial pinch as weekly rents continue to rise.
Sydney has long been Australia’s most expensive city to rent a home, with the median weekly rent for a house currently $747 a week, while the median unit rent is $648 per week.
But proposed changes to Sydney’s planning laws will help deliver more space exclusively for rental housing thanks to new incentives to develop build-to-rent properties close to the city’s CBD.
But what is Build-to-rent?
Popular in other parts of the world, build-to-rent housing is when apartment buildings are kept in single ownership by the developers and investors, who rent them out directly instead of selling each apartment for a profit.
The owner effectively becomes a landlord for a whole building of tenants and is responsible for its management and maintenance.
The refinements will approve up to 75 per cent more floor space for build-to-rent development, depending on the site location.
The changes apply to renovations and new builds and will pertain to property development applications made within five years of the updated legislation’s approval.
Changes to increase building occupancy rates
Lord Mayor Clover Moore says backing more build-to-rent housing means fewer inner city properties will sit empty while Sydneysiders search for a home.
“We’ve seen build-to-rent work well overseas to help address the housing crisis, with these types of developments providing stable and secure accommodation for renters,” the Lord Mayor said.
“In addition to increasing rental stock in Central Sydney, this type of accommodation has high occupation rates. That is great for inner-city vibrancy and avoids situations where international investors leave newly built flats empty for capital gain.
The proposed changes come after a review of the drop in demand for non-premium office space post-Covid. They could provide a silver lining to renters by converting some of the city’s 14 per cent empty office spaces.
The changes are good news for Sydney renters such as Samantha Neill, who told Build-it that continual rent rises since Covid have forced him and his partner to move further away from the CBD every time their lease expires.
“Every lease, we have had to relocate further out suburb by suburb,” she said.
“We’ve gone from Kirribilli to Zetland to Erskineville and now Oatley on the city’s outskirts in a matter of years, and that makes the commute horrendous.”
“Anything that frees up more properties to rent closer to the CBD is welcome news.”
Other amendments to the legislation include climate-friendly regulations, the promotion of increased tree canopy and green roofs and streamlined processes for design excellence and major development applications.
Students set to benefit
The amendments are set to benefit students with developers able to access 20 per cent more floor space to develop co-living accommodation to provide homes for those studying or in low-income work.
“We know that students are one of the groups that have been hit hardest by the rental crisis in Sydney, with lack of appropriate accommodation and affordability both major issues,” the Lord Mayor said.
“By offering these additional floor space incentives, we hope landowners and developers will create more co-living accommodation in areas like the Haymarket area, which has proved popular with students in Sydney.”
Clover Moore says the proposed amendments to the Sydney Local Environment Plan 2012 will also help make central Sydney a more inviting place to raise a family by increasing the number of residential development approvals for minimum three-bedroom apartments.
“The proposed changes would see a minimum of 20% of dwellings in new residential developments made up of three-bedroom plus apartments to help provide more suitable accommodation for families, ideally located on the ground floor or near to the building’s communal open space,” the Lord Mayor said.
“We have introduced incentives for developers to install lifts and stairs for roof access, shade structures, accessible bathrooms and kitchen facilities to encourage better use of communal and social spaces on top of residential apartment buildings,” the Lord Mayor said.
“This is a great endorsement of the City as a wonderful place to live and raise a family, but it means we need to encourage diversity in our apartment development mix and ensure the delivery of units with more than two bedrooms.”
