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Seven months after taking power, Chris Minns used an address for the annual Sydney Institute lecture to outline his solution to the state’s worsening housing crisis.
Sydney would be denser, and homes would be built faster in well-located areas close to public transport. Crucially, many would be formally classified as affordable housing, meaning key workers and those on low and middle incomes would not be locked out.
“We can show the people of Sydney that in solving this housing crisis we can create a better Sydney in the process,” Minns told guests during the black-tie dinner in Pyrmont in October 2023.
Since then, the government’s affordable housing commitments have been whittled down, taking a beating in the face of economic headwinds that have dramatically affected the feasibility of new development.
In the new Bays West precinct, what began as a promise to commit 30 per cent of all new homes on surplus public land to affordable housing has dropped to 10 per cent. A pledge of up to 15 per cent affordable in new density zones around public transport has in some cases dropped to 3.
While some of those decisions have been defended as necessary policymaking, critics say the government has too readily jettisoned a housing type that Minns had identified as vital to Sydney’s future and a payoff in the density deal.
What is affordable housing?
“The way most people should think of affordable housing is as an attempt to fill in the gap where social housing existed before the 1980s,” says Leo Patterson Ross, chief executive of the Tenants’ Union of NSW.
Where once the state government built significant quantities of social housing for low-income blue-collar workers, the introduction of means testing in the late 1970s increasingly limited access to subsidised homes as the stock of publicly owned properties was sold off.
Affordable housing became the imperfect solution for those left behind.
With the transition to delivering affordable housing through the private market, governments introduced policies requiring developers to set aside a proportion of residential developments for low- to medium-income households, or pay the equivalent in cash.
Those homes are offered at discounted rates, usually 20 to 25 per cent below the suburb’s median rent, and accessible under certain eligibility criteria, such as household income and number of children. For example, a single parent with two children can earn up to $57,600 a year to access an affordable housing unit in the “very low” bracket, or $138,200 in the “medium” bracket.
Labor’s vision
The Minns government’s early vision for affordable housing was underscored by Rose Jackson soon after she was sworn in as housing minister, citing a commitment by London mayor Sadiq Khan in 2016 to ensure 50 per cent of new homes developed are “genuinely affordable”.
“Can we get it to 50 per cent?” she mused in an interview with The Guardian.
“I don’t know if in every development, particularly the ones that are already in train, whether that’s going to be feasible … but I’m going to try.”
After successive decades of greenfield construction on Sydney’s fringe, the commitment to affordable housing – which had been at the heart of Labor’s planning agenda since opposition – was a fundamental part of redefining where housing should be built.
Instead of turning farm paddocks into endless developments, Minns, like others before him, dreamed of densification: transforming inner Sydney into something akin to Paris, Singapore or New York. His government’s grand vision would rely upon building bigger apartments in suburbs close to employment centres like the CBD.
For the city to function, a decent chunk of those apartments would need to be priced so that low- to moderate-income workers could afford them.
“Sydney is one of the most expensive cities in the world. Ultimately, affordable housing is going to be one of the main ways that we keep low-income, high-importance communities in our city,” says Eamon Waterford, chief executive of the Committee for Sydney.
Talei Williams should be benefiting from affordable housing. The 31-year-old nurse drives from her parents’ home in Waterfall, on the city’s southern fringe, to Royal Prince Alfred Hospital in Camperdown, a commute that can take up to 90 minutes in bad traffic.
But living near RPA while studying to become a registered nurse is simply unworkable, she says. Splitting rent in a share house nearby would consume about 40 per cent of her income if she was working full-time, and Williams says she earns too much to qualify for low-income affordable housing.
“I don’t earn enough to rent anything within the area. Essentially, everyone’s solution to that is, ‘Well, why don’t you just work somewhere else?’” she said. “That shouldn’t be my only option.”
Waterford says the current affordable housing model needs to confront three core issues.
First, the current lack of a centralised public database tracking where affordable housing is, and who is being homed; second, the fraction of affordable housing being offered in perpetuity; and last, that many of these homes were either unaffordable or priced at levels pushing occupants into rental stress.
For example, a four-bedroom Burwood townhouse listed in early June with a 20 per cent discount was $1200 a week. A couple with two children seeking to apply could have a maximum combined gross income of $181,400, or take-home pay of roughly $142,000 a year.
Rent would consume nearly 44 per cent of their net income.
“It’s just bullshit affordable housing,” says Peter Phibbs, an emeritus professor of planning at the University of Sydney.
Housing Delivery Authority
Announced at the end of 2024, Minns explained that the Housing Delivery Authority would fast-track developments trapped in Sydney’s planning system, while giving developers the scale necessary to unlock unfeasible projects. An affordable housing requirement would ensure the community benefited too.
But the authority’s definition – requiring developers to “contribute a measurable quantity of affordable housing” – resulted in vastly divergent commitments, a 12-month departmental review concluded.
Of the 402 projects fast-tracked through the HDA, only 22 have affordable housing in perpetuity, analysis by the Herald shows – 17 of those were cleared on May 29. Nearly 100 projects had been waved through despite not specifying the affordable housing commitment.
The 12-month review recommended that affordable housing should surpass the level designated in state and council policy, while developments obtaining significant uplifts should contribute a proportional amount of low-income housing in perpetuity, “recognising the substantial benefit in uplift to the proponent”.
With the vast majority of affordable commitments on limited horizons, some wonder anxiously what Sydney will look like in 15 years’ time, once they disappear. Shelter NSW chief executive John Engeler says the state should accept a smaller number of affordable homes if they are in perpetuity, what he describes as the “gold standard”.
Yet, in policy on the fly after Urban Taskforce chief executive Tom Forrest criticised the changes, Minns rebuked his Planning Department’s recommendations. His evolution from affordable housing idealist to market realist was complete.
“My view is the last thing we need to do is scale back the Housing Delivery Authority. We don’t need to put it on a diet; we need to put it on steroids,” Minns said on May 28.
Minns’ decision to walk away from the review’s recommendations is criticised by Phibbs, who says that making affordable housing proportional to the developer uplift was sensible as a way of ensuring the community benefited from large developments.
“Surely, you can walk and chew gum at the same time. The HDA is a really good idea because we have so many projects which are stuck in the feasibility trap. But you don’t need to give it away for free,” he said. “What’s your aspiration as a Labor government? Do you want to house poor people? Or do you want to make developers millions of dollars?”
Infill bonus
The sign of things to come became evident within weeks of Minns’ Sydney Institute speech.
One of the NSW government’s first planning policies gave developers a 30 per cent height and floor-space ratio bonus for large-scale residential apartments if they set aside 15 per cent as affordable housing.
By December 2023, four months after the “Three Peaks” – the state’s three development lobbyists – claimed the policy was “impractical and unfeasible”, the trade-off had been pared back. Developers could now receive a 20 per cent bonus if they allocated 10 per cent to affordable housing.
After Minns declared his government would stop “demonising” developers, critics say the needle has now swung too far, with his government too sensitive to their demands. The Tenants’ Union’s Patterson Ross said it had set an expectation it would fold under sufficient public pressure, which perversely resulted in “more disruption and delays”.
In October 2025, research undertaken on behalf of not-for-profit Shelter NSW found the bonus scheme would deliver developers windfall gains in suburbs such as North Sydney, Crows Nest and Edgecliff, with “only a minor contribution to affordable housing”.
With Sydney’s western suburbs unfeasible – the results were largely confirmed by a UDIA report published last month – the authors, Phibbs and economist Cameron Murray, argued that their results called for the policy to be finessed to maximise the delivery of affordable housing.
Planning Minister Paul Scully underscored various affordable housing policies implemented by the state government, including the infill scheme and the $450 million investment to provide 400 build-to-rent homes for essential workers in Sydney.
“The Minns Labor government is driving the delivery of more affordable homes than ever before through smart initiatives which balance both feasibility and increasing supply,” Scully said. “We are continuing to review policy settings to make sure we are delivering more housing, including more affordable housing for everyone in NSW.”
TODs
In late December 2023, Minns stood triumphantly alongside Scully and Jackson to outline how they would reach the state’s commitment to build 377,000 dwellings by 2029.
Thirty-nine sites near transport hubs would be rezoned across Greater Sydney. Eight growth areas within 1200 metres of heavy rail and metro stations would be home to towering apartments, creating capacity for almost 60,000 new homes by 2040, with affordable housing “held in perpetuity” making up as much as 15 per cent of these dwellings.
As Minns laid the groundwork for the necessity of overhauling the planning system – pitting those favourable to development against those he cast as NIMBYs – an already unfavourable macroeconomic environment was deteriorating around him.
Throughout 2024, interest rates plateaued at 4.35 per cent as inflation remained stubbornly high, undermining construction feasibility. Building apartments in Sydney’s west became unworkable as the cost of constructing units surpassed the price that buyers were willing to pay.
The housing numbers increasingly made for grim reading. Soon after Labor entered government, 3737 apartments were approved in NSW; within 13 months, the figure had plunged to 156. Dwelling completions fell from 12,304 in the June 2024 quarter to just 9570 a year later.
Twelve months after the state government’s announcement, the department published the final rezoning for the eight accelerated transport zones. A 3 per cent affordable housing base rate was established across the entirety, while “key sites” – spots largely adjacent to transit hubs – would be subject to higher, variable requirements.
While Scully explained the new base rate had been determined by independent modelling and was “not a ceiling”, in the Bankstown accelerated zone, developers of the two key sites there were expected to contribute 4 per cent – 1 per cent higher than the base.
Of the total 38 key sites across the accelerated precincts, only a “handful” in Crows Nest – where towers would jump from six storeys to 62 storeys – would surpass the 15 per cent the government first spruiked in December 2023.
In a mayoral minute soon after the TOD rezonings were announced, North Sydney mayor Zoe Baker criticised the outcome, saying the “plan lacks ambition to address the urgent need for affordable and key worker housing in this precinct”.
Shelter NSW decried the downgrade, saying the original ambition was part of the “density deal” sold to the broader community, while warning that low-cost housing and communities would be displaced by developments in Homebush and Bankstown.
Including a range was “poor practice” and sending “confused signals to the market”, Shelter said at the time.
But Waterford defends the decision, saying: “I want to see enormous amounts of social and affordable housing built, but I understand the economic reality they’re dealing with in those precincts.”
Public land audit
The long-awaited Bays West precinct – in which 8500 new homes would be built within two kilometres of the CBD – disappointed many who had hoped the large-scale development on public land would be an opportunity to deliver a significant number of affordable homes.
In opposition, Labor’s committed to undertake a statewide audit of surplus public land. Any properties built on this land would be subject to a “mandatory requirement for 30 per cent of dwellings to be used for social, affordable and universal housing”, the party’s election manifesto said.
Instead, Minns announced only 10 per cent of the housing in the Bays West precinct would be set aside in perpetuity for affordable and essential workers’ homes.
The state government’s $6.6 billion injection into social housing in the June 2023 budget, delivering 6000 new social homes, was a “better way” of increasing net social housing than making “unnecessary compromises on major land releases”, he said.
Surplus public land would now deliver 21,400 “market and affordable homes”, although the number of dwellings for low-income workers was not stipulated.
But Patterson Ross is unconvinced by Minns’ trade-off, arguing that tackling the state’s social housing crisis requires a comparable multibillion-dollar injection every year, while also delivering significant blocks of affordable housing on surplus public land.
The social housing waitlist in NSW has ballooned from 56,000 in June 2023 to 69,000 in April, while the number of people sleeping rough rose to 2308 in 2026, a 5 per cent increase over the year earlier.
Lands and Property Minister Steve Kamper said: “The government is on track to deliver more than the 30 per cent target of social and affordable housing built on public land, including 8400 new public homes.”
“Instead of requiring 30 per cent to be delivered on every site, the government kept this overall target and made the biggest ever investment in new public housing.”
Social housing served a different but equally important demographic to affordable housing, Waterford says. He said the government should “stick to their guns” and deliver on the original commitment, and that solving the housing crisis required a greater fiscal commitment.
“The reality is the government needs to take a financial hit to deliver on their commitment to social and affordable housing,” he said.
“Only 4 per cent of housing stock in Sydney is social and affordable housing. These aren’t nice-to-haves. These are actually core parts of a functioning economy and a functioning society. And 4 per cent is not enough. We need to be pushing that number much higher.”
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