“A lot of people who are against it [affordable housing] think it will be criminals who will be occupying the housing. In fact, it will be our children, it will be us” - Professor Richard Peiser
In a public talk co-hosted by Sydney Ideas at the University of Sydney on 23 February 2017 Professor Peiser presented an overview of affordable housing drawing on lessons from around the world.
Professor Peiser was later joined by a panel of expert speakers including Mayor Sally Betts, Waverley Council and President of SSROC, Robert Furolo, Director of Strategic Housing Solutions and Dr. Kate Harrington, Demographics and Planning Statistics, NSW Government.
Over the past few decades approaches to address housing affordability have significantly changed. In the United States, there has been a shift away from supply side subsidies such as tax credits and below-market interest rate loans to using demand side subsidies such as voucher programs to finance affordable housing.
Effective supply side tools include:
Offering government-owned land at below market prices
Lowering the cost of entitlements including fees and time
Offering density bonuses for affordable units so that larger floor space ratios are available where specified levels of affordable housing units are guaranteed
State legislative overrides such as Massachusetts Comprehensive Permit Act Chapter 40B. In areas that have low levels of housing that qualifies as affordable, developers are permitted density above local zoning limits where they include new units that have long term affordability restrictions.
Effective demand side tools include:
Providing financial assistance for home purchase down payments
Mortgage assistance schemes such as shared appreciation mortgages or soft second mortgages where the State or not-for-profits subsidises a second mortgage below market interest rates.
Professor Peiser identified a range of challenges in developing and implementing effective affordable housing solutions including:
A supply side approach can reduce the cost of housing in the long run however need shorter term solutions and ensure that supply is increased in the right places rather than on metropolitan fringes away from jobs. A strategic and holistic approach is needed.
The definitions of affordable housing are not consistent and can cloud public perceptions of who will occupying the home.
Listen to audio of the event here