‘Left in limbo’: Sydney council backflips on housing rule to entice developers to ‘failed’ suburb

3 months ago 4

The number of affordable homes in a suburb earmarked for thousands of new units has been dramatically slashed by a Sydney council after developers argued that the rules put a handbrake on construction and made development “unviable”.

New housing on land earmarked for uplift in the Frenchs Forest town centre will have to include an affordable housing rate of 3 per cent after the Northern Beaches Council cut the requirement from a mandate of 10 per cent.

An artist’s impression of Frenchs Forest under the council’s plan to boost housing density.

A majority of councillors approved the reduction despite fierce pushback from opponents who warned that it could price future residents out of the suburb and turn Frenchs Forest into an “enclave of exclusivity”.

But other residents welcomed the reduction, including Ann and Craig Attwater, who have been trying to sell their home in Frenchs Forest for the past four years.

The 10 per cent mandate for affordable housing was set as part of a plan endorsed by the council in 2021 to supercharge the construction of 1800 new homes in the suburb that is also home to Northern Beaches Hospital.

However, in the four years since those rules came into effect, just four new housing applications have been approved for the town centre – and none have commenced construction.

Real estate agent Mark Thorn with home owner Ann Attwood in Frenchs Forest.

Mrs Attwater said the stalemate had left home owners in a “state of limbo”.

“Since 2021, labour and building costs have risen, interest rates have skyrocketed, and when you add to that the affordable housing contribution, it’s made new housing completely unviable,” she said.

“It’s left us in limbo because we haven’t been able to sell our home, but we also haven’t wanted to invest in it when it could be knocked down and redeveloped in the future.”

The decision to slash the affordable housing quota follows strong opposition to the council’s required rate of 10 per cent from developers.

An artist’s impression of the council’s vision for the suburb, released in 2021.

Under the scheme, developers must provide either a proportion of new homes as affordable housing or an equivalent monetary contribution to fund affordable housing projects elsewhere in the local government area.

Mark Thorn, a real estate agent, said the 10 per cent mandate had “killed development in Frenchs Forest”. He noted that the rate was far higher there than other parts of the northern beaches.

“If you drive four kilometres from Frenchs Forest to Dee Why, the affordable housing contribution rate is 0 per cent, so if developers have a choice between Frenchs Forest or Dee Why, they’ll choose Dee Why every time,” Thorn said.

“The scheme hasn’t delivered a single affordable home, and you’ve instead got residents sitting on land that’s been rezoned and are paying higher rates because of the uplift. It’s been a complete failure.”

The lower mandate was voted in as a council study found that housing stress and demand for affordable dwellings remained at chronically high levels in the northern beaches, with many young residents moving from the area.

Last week, resident Daniel Kersenboom urged councillors to maintain the 10 per cent standard, saying that Frenchs Forest was the “only part of the northern beaches that has shown any resilience to the housing crisis”.

Greens councillor Ethan Hrnjak also called for the 10 per cent mandate to remain, and said the lower contribution rate could turn Frenchs Forest into an “enclave of exclusivity”.

“The affordable housing contribution was a selling point to our community when the higher density was proposed, and it was designed to ensure essential workers and young people could live locally,” Hrnjak said. “We shouldn’t be expected to sacrifice affordability so developers can make a tidy profit.”

A report by the council concluded that a 3 per cent limit would stimulate housing growth and bring the contribution rate to levels attained by other parts of the local government area that have been earmarked for increased density under the NSW government’s low- and mid-rise housing reforms.

Mayor Sue Heins supported lowering the rate to 3 per cent, noting “the world was a different place [to] when the 10 per cent rate was set in 2021” – a position backed by councillor Vincent De Luca, who added that a lower affordable housing requirement was better than no housing at all.

The council will revisit the decision on Tuesday night.