SGS Economics and Planning (SGS) analysis for the University of New South Wales City Futures Research Centre shows that poor housing affordability is impacting Sydneysiders wellbeing and productivity.
The report Strengthening Economic Cases for Housing Policies argues for a new housing story – one that considers which housing arrangements will best sustain metropolitan economic development for the long term.
Sydneysiders are taking a direct hit
SGS analysis found the high cost of housing in Sydney not only affects resident’s wallets; it affects their health and even creates problems for childhood learning. High cost housing also affects the labour market – how long people work for, how far from work they live and what age they retire.
SGS Principal and Partner Ellen Witte said: "Offering affordable housing close to jobs and services enables people to connect to jobs that best suit their capabilities. This benefits both the employee and the employer. Also, better housing outcomes reduce housing stress and the amount of time spent travelling to and from work.”
SGS conservatively estimates that households across New South Wales overspend $1.8 billion each year on rent: “This overspend is money households could be spending on other primary needs such as food, power, medical needs, transportation and education for their children. It would be interesting to compare this overspend with the cost of tax exemptions for investors," said Ms Witte.
Business Council of Australia Chief Executive Jennifer Westacott said in The Sydney Morning Herald that, while well-intentioned, the government’s current approach distorts the market and the poor quality living arrangements in the rental market affect people’s mental health and disrupt the social and educational development of children.
The Chief Executive of the NSW Federation of Housing Associations, Wendy Hayhurst, said that getting housing right could be key to reducing problems and saving money in other sectors: “A lot of spending we do, whether on social services … or for health or education issues [that people face] is because they’re not in stable, secure accommodation,” she said. “If we get housing right….the evidence shows you would spend a lot less on these services.”
Shaping better outcomes
The results clearly show that Sydney needs to have more affordable homes at reasonable distances from where people work if the government wants to boost productivity in the city. The task now is for government, housing providers and researchers to work collaboratively to shape better outcomes.
Download the report
The study was led by Professor Duncan McClennan and jointly commissioned by a consortium of not-for-profits, government and private sector organisations, including the Community Housing Industry Association of NSW. SGS worked with Cadence Economics on this project. Click the image to download the report: