Save articles for later

Add articles to your saved list and come back to them any time.

Businesses are struggling to lure and retain workers as Sydney joins Hong Kong and San Francisco as the world’s most unaffordable cities and a new study warns the housing crisis is costing the city’s economy at least $10 billion a year.

As the NSW government attempts to tackle the housing affordability crisis, some businesses have reported workers moving to cheaper housing in Melbourne and “air commuting” to Sydney, while others are struggling to keep young workers and graduates who are priced out of the market.

Sydney could face a talent drain if it does not deliver more affordable housing. Credit: Dion Georgopoulos

Committee for Sydney chief executive Eamon Waterford said drastic action was required to prevent the city’s lack of affordable homes eroding its competitive edge and long-term economic success.

“This is not a small problem,” he said. “And that means that the solutions are going to be bold solutions.”

The international benchmarking study, compiled by the Committee for Sydney with urban intelligence firm The Business of Cities, said Sydney had joined Hong Kong, the San Francisco Bay Area, Tel Aviv and Vancouver as the most chronically unaffordable global cities in their region.

Sydney met the criteria for chronic housing unaffordability because its median property price had been more than eight times above the median household income more than five years in a row; and more than 33 per cent of renters were in housing stress, under which housing costs soaked up more than 30 per cent of monthly income.

Waterford said the report, published on Thursday, estimated Sydney’s lack of affordable housing was stripping $10 billion from the economy each year in the areas of talent, innovation and productivity alone.

“It means it’s harder to find good people, and to keep good people. We have fewer startups, we have less investment in research and development. There’s less risk-taking in our economy. People take longer to commute, there’s more congestion. And businesses have to pay more to keep people.”

He said some national businesses and organisations were struggling to retain graduates and young employees who wanted to move to interstate offices to avoid Sydney’s high housing costs. Other workers decided it was cheaper to live in Melbourne and commute to Sydney as required.

“We’re going to lose more people, and we’re not going to gain as many people. San Francisco is having the same challenge.”

Sydney’s shortage of affordable housing means workers often face high housing costs and long commutes.Credit: Louise Kennerley

To tackle the problem, the report recommends introducing “inclusionary” zoning, where authorities mandate or create incentives to ensure a proportion of new residential development is affordable housing. This should be accompanied by a far greater investment in social and affordable housing, and a significant increase in housing supply.

Waterford said Sydney could look to Tel Aviv, which had adopted an inclusionary zoning policy that required provision of 15 to 20 per cent affordable housing in new developments, aimed at encouraging families to live near train stations. And Miami in the United States was delivering more than 18,000 affordable housing units for key workers, such as teachers and nurses.

Committee for Sydney planning and housing policy manager Estelle Grech said the housing affordability crisis was also an opportunity for authorities to rethink the way in which they planned so-called “innovation precincts”, such as the much-vaunted Tech Central corridor in inner Sydney.

“A lot of the focus there has been on providing commercial floor space, but what if we got a bit more creative and provided work-living opportunities for people, so you could live in the Central precinct through build-to-rent? Our city will stop functioning if key workers can’t afford to live in it.

Planning Institute of Australia policy director John Brockhoff said NSW needed to increase housing density, but in doing so, it had to build more affordable homes and create liveable communities for workers.

“It’s not just a fairness and individual welfare issue anymore, it’s a genuine productivity problem if we don’t have our workers living where we need them.

“We need them to be located in places that are great to live, that are well-planned and with great amenity, and there’s no reason in Australia why we shouldn’t be able to do that.”

Get the day’s breaking news, entertainment ideas and a long read to enjoy. Sign up to receive our Evening Edition newsletter here.

Most Viewed in National

From our partners

Source: Read Full Article