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What is affordable housing?

One of the most common misconceptions about “affordable housing” is that its “cheap housing”.   Whether housing is cheap or expensive depends on how much income a person or a family has and what portion of their income is spent on housing.   Generally housing is considered affordable if it costs less than 30 percent of gross household income for very low, low or moderate income households .

People described as being on a very low income are those earning less than 50 percent of the NSW or Sydney median income, depending on where they live. They include workers in a range of lower paid occupations, particularly in areas such as retail or manufacturing, as well as people earning the minimum wage or who are on an aged or disability pension or other government benefit.

People earning more than 50 percent but less than 80 percent of the NSW or Sydney median income are described as earning a low income. They include many people working in jobs such as a child care worker, secretary or cleaner.

People described as being on a moderate income are those earning between 80 – 120 percent of the NSW or Sydney median income. They may include people working in occupations such as teaching, policing or nursing, particularly if they are in earlier stages of their careers.

Note – The 2011 ABS Census data found that the median income in Sydney is $1,444 per week or $75,088 per annum.

Affordable Housing may include a range of housing types and sizes, including single or multi-bedroom units or houses, as well as studio apartments. It is only available in some locations and eligibility criteria apply.   Although affordable housing is sometimes available for purchase, it is most commonly available for rent.

Affordable Housing is also often confused with “Social or Public Housing”. Affordable housing is open to a broader range of household incomes than social housing, so households can earn higher levels of income and still be eligible. Households do not have to be eligible for social housing to apply for affordable housing, though people who are eligible for social housing may also be eligible for affordable housing properties.

Affordable rental housing may be owned by private developers or investors, local governments, charitable organisations or community housing providers. It is usually managed by not for profit community housing providers, and sometimes by private organisations.

Affordable housing in NSW has been developed in a range of ways and funded through a mix of sources including government (local/state/Commonwealth) grant or land contributions, planning incentives, philanthropic sources, community housing provider equity contributions and from finance secured against assets owned by community housing providers.

Affordable Housing and the share economy

Affordable Housing in Byron Shire is a hot topic and for good reason. Outside of Sydney its one of the most expensive places to live in NSW and well located and designed affordable housing is in desperate short supply . One of the more contentious issues in the creation of new affordable housing options is the reduction of parking spaces in return for higher density housing close to town centres. Byron council’s aspirations to create pedestrian and cycle friendly towns are admirable however connecting the shires towns still relies heavily on the use of private vehicles. Sure carpooling has been trialled and bus services exist however the demand for more and more parking to accommodate the ever increasing number of cars continues to grow.

One project that is attempting to redesign the relationship between affordable housing and car ownership is “The Kollective – Mullum” by Byron based designer/developer Koho. The project, that has the support of Byron Councils staff is set to trial the shires first private car share scheme specifically for tenants residing at the premises. Adam Bennett-Smith from Koho says that “in over 10 years working in the affordable and community housing sectors its clear that affordability is not just a housing issue its a whole of lifestyle issue. This includes housing, transport, energy etc and creating affordability requires a holistic approach. As a designer and investor in new affordable housing we are uniquely positioned to incorporate elements of the share economy to create connected, affordable lifestyles for people”

So what is car sharing? Put simply carsharing is an on demand car rental service. A dedicated vehicle and carspace is located on the premise and residents can book and rent the vehicle by the hour or the day. Residents sign a standing car rental agreement and pay a monthly bill based on their usage. Booking is done via an app and the rental rate includes petrol. All of this adds up to some serious savings for a person who infrequently needs a car, say once or twice a week and research suggests that one share car can service the needs of six casual users at about 1/5th of the cost of owning the vehicle. In dollars this can equate to a saving of up to $3,000 per year or around $50/week. In addition carsharing reduces the indirect environmental impact of cars such as parking.