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Build-to-rent (BTR) housing could see a boost in the Sydney central business district thanks to a proposed planning overhaul.
Around Australia, shrinking supply and plummeting vacancies are putting extreme pressure on the nation’s renters.
In Sydney, the rental vacancy rate is now under 1.11 per cent, while Adelaide is grappling with the country’s lowest vacancy rate at just 0.67 per cent.
The City of Sydney council has recently taken steps to ameliorate conditions for renters in the city centre by endorsing proposed amendments to the Sydney Local Environmental Plan 2012. If approved, the changes will incentivise more BTR and co-living accommodation to make renting more affordable for Sydneysiders.
Developers will be granted between 20 per cent and 75 per cent more floor space for designated BTR accommodation. The new planning rules will apply to BTR conversions and new builds whose applications have been made within five years of when the changes were formally approved.
Sydney lord mayor Clover Moore stated: “We’ve seen build to rent work well overseas to help address the housing crisis, with these types of developments providing stable and secure accommodation for renters.”
She added that the new incentives in BTR developments will also help to discourage other forms of development that have lower occupation rates.
“In addition to increasing rental stock in central Sydney, this type of accommodation has high occupation rates,” said Ms Moore. “That is great for inner-city vibrancy and avoids situations where international investors leave newly built flats empty for capital gain.”
“Build-to-rent housing does not sit idle with lights out, as some high-end investor apartments do, and these developments will help revitalise and boost the local economy,” the lord mayor said.
Under the new planning amendments, developers will also be able to access 20 per cent more floor space for co-living accommodation, in a move specifically designed to ease housing struggles for students and low-income workers.
Ms Moore said: “We know that students are one of the groups that have been hit hardest by the rental crisis in Sydney, with lack of appropriate accommodation and affordability both major issues.”
“By offering these additional floor space incentives we hope landowners and developers will create more co-living accommodation in areas like Haymarket,” she added.
These changes come in the wake of declining demand for non-premium office space in the Sydney CBD, with the council reporting that office vacancy rates are currently sitting at around 14 per cent.
Sydney is not the only Australian city placing focus on BTR, with foreign investment application fees for BTR projects set to soon be “at the lowest commercial level”, and a new 500-unit BTR project has cemented Victoria’s reputation as the BTR capital of Australia.
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