By Mark Bonanno

Photo by Maximillian Conacher on Unsplash

Urban Living Network, an electronic news service for developers’ lobby group the Urban Task Force, featured a cartoon in its October 17, 2025, edition.  An avuncular Anthony Albanese puts four little children to sleep reading them a story which starts Once upon a time, there was a PM who thought tipping money into social housing would solve the housing affordability crisis.

An article associated with the cartoon reads in part:

There was hope that Minister O’Neil would set the path right, particularly with the Greens all-but wiped from the political landscape, but Housing Australia remains a mess. There is simply not enough focus on supporting those that deliver 95% of housing supply – the private sector. 

I will circle back to the 95% figure, but my first question: why do developers hate social housing?  What is their problem with affordable housing?

A note on the terms.  People use social and affordable housing interchangeably, but there is a difference.  Social housing deals with those tenants who face harder social and financial challengers.  The woman facing DV with two kids; the disabled person.  Affordable refers to the financially slightly better off: They can pay rent, but not much, and they will need assistance. 

For instance, the NSW Labor Government has recently amended the Environmental Planning & Assessment Act 1979 (Act).  One change was to the statutory objectives under the Act.  Mills Oakley, a leading developer legal firm commented on the change:

In terms of housing, the current objectives only reference the promotion of ‘affordable housing’. This is defined to mean a narrow class of rent-controlled housing — and does not include owner-occupied or other housing that can be enjoyed by a wider cross-section of the community.

The new objects broaden out the housing objective to ‘promote the supply, delivery and maintenance of housing, including affordable housing’. This sends a much clearer message to decision-makers that the planning system stands in favour of the delivery of all types of housing, not just ‘affordable housing’.

So affordable housing is a “narrow class of rent controlled housing”.  Unworthy of its own definition perhaps?  Strange, because a major developer protested vehemently before the Courts that such a definition did not exist.

In 1999 the Green Square development in Sydney was being finalised with extensive planning controls designed to expand the intensity of the development and to require “affordable housing”.  The developer appealed the affordable housing provisions on the basis that this was not a defined term in the Act and there was no objective to fulfill it.  They won.

The Green Square case

The case is Meriton Apartments Pty Ltd v Minister for Urban Affairs and Planning & Or [2000] NSWLEC 20.

Reasons for the refusal are specifically legal on the question of financial and “in kind” contributions paid or made by the developer according to the requirements of the Act.  The appeal was much wider though and included:

• the applicant submits that the required contribution imposes a tax inconsistent with the purposes of the Act (paragraph 19);
• the submission that discrimination exists since certain types of development are exempted from the requirements of affordable housing (paragraph 20).
• Further, the imposition was unfair because the challenged provisions are designed to satisfy the pre-existing demand for affordable housing a demand created otherwise than by the proposed development. The challenged provisions apply irrespective of whether the particular development creates demand for the provision of affordable housing (paragraph 21).
• Finally, this was an interference with the developer’s property rights: In the absence of compensation payable in return for the contribution the applicant submits that the challenged provisions operate oppressively or otherwise constitute an unlawful interference with the private and proprietary rights of owners of land in Green Square (paragraph 22).

The Court agreed to all the above, the planning controls were set aside, and the Green Square Affordable Housing Development Control Plan 1999 was declared invalid.  Years of planning and preparation to enhance affordable housing were set aside.

However, the victory was largely nominal.  The legislation which allowed for Green Square, the Local Environmental Plan (LEP) was Gazetted on 28 May 1999.   The developer then appealed, the hearing taking place on 20, 21 and 22 December 1999.

Clearly the Government saw the danger. While the Department defended the decision in Court Plan B was already in place.  The Labor Minister for the Environment Andrew Refshauge introduced an amending bill on 27 October 1999 which made affordable housing a defined term and the Act was changed to insert a new objective: the provision and maintenance of affordable housing.  This series of amendments went through Parliament and were assented to on 3 December 1999.  Later amendments in mid-2020 made the contributions and the affordable housing units legal also.

The Meriton decision stood to set aside the original LEP, but the correction by Parliament meant that Green Square could go ahead largely as planned.

If the Meriton case is anything to go by, developers see their proposals as private arrangements.  If the state wishes to impose any restrictions, the private owner, the developer, needs to be compensated.

The historical record

In 1956 when Prime Minister Menzies changed the Commonwealth State Housing Agreement to put 20% of the Commonwealth contribution into private hands (chiefly by giving the money to the Commonwealth Bank to lend to private home buyers) the conservative Government could boast a large proportion of Australians lived in housing commission or equivalent State owned homes as renters.

At Canterbury in Victoria, addressing the Liberal/Country Party Coalition in preparation for the 1956 election, Menzies countered the housing criticism of the Labor opposition:

In their five post-war years, the then Labor Government saw 202,000 houses and flats completed in Australia. This was good. In our five completed financial years, 388,000 houses and flats have been completed: a record unsurpassed anywhere.

In War Service Homes, the Labor Government’s five-year record was 22,755 homes, our five-year record 68,162!

We have, in fact, during 5½ years, provided nearly 20,000 more War Service Homes than were produced under all previous administrations for the previous 30 years since the inception of the scheme.

But we look forward. The housing arrears, accumulated during the war, are being handsomely reduced.

Ming the Merciless was not known for his socialist predilections but he funded more housing than Labor in his post war Government.

How did we get to 5% social housing?

This is part of Anthony Albanese’s origin story: one of the millions of Australians who started out in State owned housing commission dwellings and progressed from there.  This was a common part of the Australian story of prosperity, the first leg up being affordable, Government provided housing.

Menzies knew it and although he strongly encouraged private ownership, he was not backward in providing public as well.  The 1956 Commonwealth/State Housing Agreement had the Federal Government giving part of the State allocation to banks, specifically the Commonwealth Bank for private ownership.

You could do this in 1956 because families could take the loan and move into the suburbs, buying cheap land on the outskirts of town and, like my parents, building their fibro home on a quarter acre block. Developers had no part in this.  The housing growth was initiated by and for mums and dads who took out the loans and built themselves.

That option doesn’t exist now. A house and land package then was worth three times the average national wage.  Now it is nine times.  Not for a house and land deal: for a town house or a unit offered by a developer.

How did we lose Government housing?  Slowly, gradually.  I have seen figures quoting 35% Government owned housing for 1956, but this is exaggerated.  The figures quoted by the former Prime Minister above indicate it was large, but figures expressing the number of dwellings as a percentage of the whole were not collected in that way in 1956.

The OECD Economic Survey for Australia 2026 released last month in January (Volume 2026/03) quotes the current social housing stock as 4%, down from 6% in 1990.

The market solution

Government has attempted to coax private developers into assisting affordable housing.  Green Square style developments is one answer.  Another is via planning law.  For example, the New South Wales Government imposed State Environmental Planning Policy (Affordable Rental Housing) 2009.  This is a complex piece of legislation with many parts.  It is now repealed, replaced by SEPP (Housing) 2021. 

For our purposes, and very much simplified, this Policy allowed a developer to get a greater number of units in a proposal provided they handed over some units to a social housing provider for 10 years (under the current Housing SEPP it is 15 years).  The social housing provider rents the property at a lower, affordable rate.  At the end of the 10 or 15 years the unit would then be returned to the developer to be rented out at market rate.

But what then happens to the renter?  Well, if they were paying $500.00 per week, and the market says it’s worth $750.00 they have to pay the extra. Or move.

Or, and here’s where the market comes into its own: the renter goes to the Government and seeks Commonwealth Rental Assistance for the shortfall.  If they qualify CRA won’t pay the full amount, but the tenant will get something towards that figure to stay in the home. 

Some characterise rent assistance as a payment to people on lower incomes to assist with housing. There is another construction: this is a subsidy to developers to allow lower income earners to have somewhere to live.  This appears to be how the developers wish to provide “affordable housing”.  The housing will be exactly the same to all external appearances, but the affordability is an ongoing payment, by the tax payer, to compensate the developer/property owner for the privilege.

But before we get here, there is the question as to whether the developers can actually build in the first instance.  A report on the ABC TV News on the evening of Wednesday 11 February 2026 interviewed a renter who cannot see how he can afford to live in Western Sydney any longer.  Cut to Tom Forrest, of the developer lobby group Urban Task Force Australia.  Referencing the fact that there are 22,000 approvals in an undefined area of Western Sydney over an undefined period, but only 11,000 commencements from these he says:

Anywhere west of Parramatta particularly in the area of apartments it’s very difficult to make the finances stack up.

Welcome to what developers in Sydney call the Latte Line.  West and south of certain lines developers can’t make a profit, and won’t build.  They cannot sell or rent at figures high enough to warrant building in the first place.  Generally these are the areas most in need of affordable housing for low and moderate income earners.

In their most honest moments developers will admit such a line exists, and they have no answers for how to address it.

The OECD, an organisation not renowned as a hotbed of socialist thinking, in the report I cited above from January 2026 says this (at page 51):

While the bulk of the supply constraint problem concerns private housebuilding, the low rate of public investment has also contributed to the lack of affordable housing. Building affordable housing where people want to live is often unprofitable for developers, so that building affordable housing generally requires public support and can contribute to social diversity. Social housing accounts for about 4% of the housing stock in Australia, down from 6% in 1990 and only about half the OECD average

But the OECD goes further than this.  See the recommendations on page 68:

Raise the target for social housing and increase public funding.

Is tipping money into social housing a solution to housing affordability?

According to the OECD, in part, yes.  If the Government goes back into the business of providing a response to housing, the product (housing) will be built for the renter’s benefit  The home may be rented out at less than “market rate”, the building of the housing may not be “profitable” in the sense a developer would class it, but the homes would be built.  If this is a supply issue, then social housing helps to stem it.  In this the Government is providing a social service, not making a profit. This is something governments regularly do. 

The Urban Task Force and the similar business and developers’ lobby groups regularly disparage such attempts as “socialism”.  Like universal health care and public school education.  Like the NDIS.  Providing social housing is a form of socialism (there’s a broad hint in the name).

But why not let the market provide the service?  Because in many cases, many places, the market will never provide the service.  The market will rent to anyone, so long as they pay the market rent.  Developers want the Government to allow the market to build what they want.  If the poor want a place, the developer is happy to accommodate as long as someone else pays.  The bill goes to the tax payer for rent assistance.

Conclusion

In drafting this piece I wondered: is it going too far to say that developers hate affordable housing?  Aren’t they just defending their rights, their shareholders?

Then on Friday 6 February 2026 the Urban Living Network, the publication which gave rise to the initial quote and cartoon above published an edition with its “Quote of the week” from current Queensland Premier Jarrod Bleijie:

The former government mandated affordable and social housing, and this is the result: kangaroo land, plovers sweeping people - that’s what mandates give you…you need to partner with the market to deliver the supply and the more you mandate the less houses you get built…”

I have no idea what kangaroo land or “plovers sweeping people” means.  But apparently Menzies and the OECD are wrong. 

Yet there is more than hate: there is fear.  By common agreement the housing problem is supply driven.  If the Government significantly moves back into the business of supply, the cost goes down  it.  It supplies the market and thereby reduces demand, the very factor which drives price.

So who really wants cheaper housing?

The views expressed are the author’s and not those of his employer or associated entities