Affordable housing is good for the environment

Background and definitions

Housing affordability

Housing, either rental or owned, that is appropriate for lower income householders in terms of price, location (including being close enough to places of work and transport) and suitability (including being warm, dry and insulated; having sufficient bedrooms; and easy access for elderly or disabled).

Housing stress

Housing stress is commonly defined as households in the lowest 40 per cent of income spending more than 30 per cent of household income on rent or a mortgage. Some measures refer to proportion of disposable income to take into account that some communities have much higher costs for other essential expenditures e.g. electricity and heating, food, transport, health.

Housing crisis

Most commonly applied to the decline in the proportion of people in Australia who own their own home or are in a mortgage to buy one. Conversely, it applies to the proportion of people renting who do not want to do so. There is a growing proportion of Australians (particularly younger adults) not able to enter the housing market and many believe they will never be able to. 

Australian house prices have been rising rapidly and this also increases the cost of renting. This in turn makes it harder for renters to save for a deposit for their own home. Recently, Airbnb has exacerbated this problem by increasing rents and reducing the number of houses and rooms available to be rented. 

There is a growing shortage of rental vacancies (particularly bad in parts of Tasmania) and many private rental properties are of poor quality and are insecure. The stocks of social housing (housing subsidised by the government or a not-for-profit organisation) has not been increasing as a rate to keep up with demand and waiting lists remain long. There is a growing problem of people not being able to afford rents, not having social housing available and being forced into homelessness. Shelter Tasmania reports that lack of affordable housing is cited as the most common cause for homelessness in Tasmania.

House prices and wages

The ABS reports that between 1994-95 and 2013-14 the proportion of Australian households renting increased from 26 percent to 31 percent. In this period, households renting from private land lords (private rentals tend to be higher) increased from 18 to 26 per cent.

The trend away from home ownership is primarily due to a growth in the housing prices and rents relative to incomes, which began in the late 1980s. The National Centre for Social and Economic Modelling found that between 2001 and 2011 average housing prices in Australia increased 147 percent and average incomes increased 57 percent. In 2001 average house price was 4.7 times the average income but in 2011 it is 7 times the average income.
— Peter McGlone

Urban sprawl creates unsustainable cities and towns that destroy local habitats and ecosystems, increase carbon emissions and energy consumption, and contribute to poverty, isolation and poor health in communities. Addressing housing affordability through the planning system can help create neighbourhoods that are spatially efficient, well-connected and well-serviced. These neighbourhoods have a lower carbon footprint and require less energy consumption to build, maintain and use. Neighbourhoods with affordable housing options have the potential be to more socially and environmentally sustainable, helping to minimise the impact of cities and towns on both the local and global environment. 

Australian homes are some of the biggest in the world. Over the past 70 years, the size of our homes has almost doubled. As our homes are growing, fewer people are living in them, the average floor area per person jumping from 30 square metres in 1950 to around 87 square metres today. Our houses are bigger than we need them to be; around 78% of homes have more bedrooms than are required to accommodate the people living in them. 

Our penchant for large, spacious homes with multiple spare rooms has contributed to the rise of urban sprawl in cities and towns, increasing carbon emissions, energy consumption and environmental damage. Large houses are more costly and resource-intensive to construct, maintain and buy, limiting the housing options for low income households. 

The energy consumption associated with the housing industry is building materials and infrastructure 26.9%; transport 33%; and operational requirements 39.4%. Large homes are not only more costly and resource-intensive to construct they are also more expensive to heat and cool, locking future occupants into these high costs and emissions for the life of the homes. Building smaller, more sustainable homes can help reduce the environmental impact of housing: energy consumption per capita can be reduced by 19.6% by replacing half the single-storey detached homes in a neighbourhood with apartments. 

Poor planning has created urban sprawl in many cities and towns, particularly as homes are built on the urban fringes to be more affordable. However, these homes have a large carbon footprint and higher living costs compared with inner city living. People living on the urban fringes are geographically distant from employment and education opportunities, services, and amenities. They have to commute long distances to do everything from eat, exercise and socialise, to work and educate themselves. Often, limited public transport options mean that people living on the urban fringes rely primarily on cars for transport.  

Many of the characteristics of affordable housing options also have a positive impact on local environments and carbon emissions. The creation of affordable housing means moving beyond large, single-storey homes, that have dominated the housing market to include a wider range of options to meet the needs of a diverse community. A mixture of housing types, sizes and densities creates more choice, and provides options for single-parent families, single people, the elderly and couples. A well-connected and serviced community with a greater range of home size and type can allow residents easier access to shops, services and public transport. This greater connectivity can reduce carbon emissions, and a more efficient use of space can help protect local wildlife. 

A participatory approach to planning can help ensure that the introduction of some higher density developments does not negatively impact on the amenity and liveability of a city. In Vancouver, the city emphasised a strong participatory approach in its planning process to combat urban sprawl.  Vancouver residents have shown a preference for higher density development to avoid urban sprawl and the associated challenges for infrastructure and transport. These decisions regarding density are often negotiated with trade-offs, such as ensuring adequate green and open spaces, or prioritising public facilities and connectivity. Meaningful community consultation allows communities to decide the level of density versus sprawl that suits them best. 

The Tasmanian Government has tended to focus on addressing housing affordability through supply-sided mechanisms that encourage the development of new homes. For example, the first home buyers grant can ease the financial pressure of entering into the housing market. Similarly, the government is planning to release Crown land for new development. However, research undertaken by the Australian Housing and Urban Research Institute (AHURI) has indicated that without good planning and targeted development, simply building more homes does not create a ‘trickle down’ effect where low income households move into existing homes vacated by higher income households as they move into newly-constructed homes. 

Planning is crucial to ensure that new homes are being built in the location they are needed, and that they are of a size and density that matches the needs of local communities. One housing strategy that has been used to create affordable housing options in Australia is inclusionary zoning. 

Inclusionary zoning can be mandatory or voluntary. In a mandatory model, the number or percentage of affordable homes to be included in a development is a condition of planning approval. It may be a fixed requirement of a specified proportion of the total number of homes or value of development, or it might be negotiated by a developer and the planning authority during the planning assessment process. 

A voluntary incentive model encourages the building of affordable homes by reducing the costs to developers. These can be planning process incentives such as fast tracking of developments that include affordable housing, or by reducing the costs, fees and charges for the development. 

In South Australia’s mandatory model, inclusionary zoning requires that all new ‘significant’ development includes 15% affordable housing, including a minimum of 5% for high-needs groups. Significant development is defined as greater than 20 homes. Originally, the affordable housing requirement was applicable only to urban fringe government land releases, but it is now also applied to urban renewal sites. The scheme, introduced in 2005, has created over 100 developments that include affordable housing, contributing to 5490 new and committed affordable homes in South Australia.

The City of Sydney has also mandated an affordable housing component of approximately 2%, calculated on the percentage of total floor area of the development in specific zones including Ultimo, Greenacres and Pyrmont. In these zones, developers have the option of including affordable housing in the development or paying an affordable housing levy. In Sydney’s unaffordable housing market, this scheme is helping lower income households live in areas that are well connected to opportunities and services, instead of contributing to Sydney’s considerable sprawl on its urban fringes. 

The creation of affordable housing options in towns and cities can contribute to the creation of healthy, happy communities with access to employment and education opportunities, services and amenities. At the same time, affordable housing is a useful strategy in planning to create more environmentally sustainable towns and cities that are efficient and well-connected, thus reducing carbon emissions, damage to ecosystems and energy consumption now and into the future. 

Article by Melinda Morris, UTAS

Melinda Morris did a work placement with the TCT in September-October 2017, working on planning policy, as a part of the Master of Environmental Governance (Oceans, Polar and Climate) at the University of Tasmania.

Further reading: development/planning-controls/affordable- housing-contributions uploads/2014/05/Delivering-an-inspiring-urban- future-Annual-Report-2013-14-30-September-2014- with-Financial-Statements_1.pdf