Developers or renters? The real winners out of affordable housing schemes

Australia is grappling with a rental crisis, and government initiatives aimed at boosting affordable housing supply may inadvertently be favoring property developers over the very tenants they intend to help. Billions in taxpayer-funded subsidies and relaxed planning regulations are being offered to developers partnering with community housing providers in an effort to increase the availability of affordable homes.

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The Chimes redevelopment will replace a building affected by serious structural deterioration, including concrete cancer, with a new development that includes 23 affordable homes for frontline and essential workers such as nurses, teachers, police and paramedics.

However, critics contend that the current model is failing to deliver genuine affordability and is allowing developers to reap significant profits. A prime example is in New South Wales, where billionaire James Packer's real estate firm, NPACT, and developer Time & Place, have proposed redeveloping a 1960s apartment block in Potts Point. Their plan involves replacing 80 existing affordable units with 21 luxury homes and 23 affordable apartments.

This project utilizes a bonus scheme introduced in 2023, which permits developers to exceed height and density restrictions by 20-30% in exchange for dedicating 10-15% of floor space to affordable units for at least 15 years. Despite this, opponents argue that the redevelopment will result in a net decrease in affordable housing stock at The Chimes site. The proposed affordable units would be situated on lower floors, have a separate entrance, and lack access to building amenities like a swimming pool, a feature critics have dubbed a "poor door."

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Those homes will provide secure, high-quality accommodation in an area where many essential workers are increasingly being priced out.

Time & Place defended the project, stating that claims of reducing overall housing availability are "false." They assert the new development will replace a structurally deteriorated building with high-quality accommodation for essential workers, such as nurses, teachers, and police officers, in an area where such workers are increasingly priced out. The company also noted that separate strata arrangements for the affordable units would help keep ongoing costs down for occupants.

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The state government has already approved the concept design and early demolition works, and is now assessing the detailed proposal.