What NSW Proposed Planning Updates Mean For Property Investors.
With Ahron Young, Ticker TV, September 17, 2020.
There’s a current proposal to change NSW planning regulations around co-living and affordable housing. Find out why I’m leading the fight against these changes and what it could mean for investors in NSW, below.
Ahron Young: While the New South Wales government’s revamped housing policy is being touted as the answer to the state shortfalls in affordable housing, experts say it will suffocate future supply due to its removal of provisions, allowing for private investors to convert empty, unaffordable investments into micro-apartments, thereby supplementing housing supply there as well. Joining us now is Ian Ugarte from Small is the New Big. Thanks so much for your time.
Ian Ugarte: Hi Ahron. Thanks for having me back on.
Ahron Young: Yeah. Absolutely. Thank you for joining us as well. Talk to us about these co-living provisions and how they actually differ from the current policies when it comes to boarding house developments.
Ian Ugarte: Yeah, so the New South Wales State Government has decided to take the three Housing State Environmental Planning Policies, or SEPPs, and create one Housing Diversity SEPP. The progressive government of 2009 in New South Wales creating the affordable housing SEPP, which allows currently co-living in micro-apartments in what we know as a new gen boarding house.
Ian Ugarte: Now, these aren’t new gen boarding. These boarding houses aren’t the boarding houses of old, okay? It allows for flexibility. Singles, professional couples, 55 plus single females can use them. 55 plus single females, the biggest growing demographic of homelessness in Australia right now.
Ian Ugarte: What we do is if the allowable under that SEPP is to renew a co-living property or convert the four bedroom, two bathroom homes that are available in New South Wales into micro-apartments, so that you’ve got a kitchenette, you’ve got a en-suite, a living area, and a bedroom area. They share one communal area in the house.
Ian Ugarte: Now mum and dad investors make up 96% of all available rental properties in New South Wales right now, so if we convert 3 million of the empty bedrooms in New South Wales into affordable housing and save residents one third to one half off their normal weekly rent, we actually create community. It’s what we need right now.
Ian Ugarte: The proposed legislation scraps all of that. It takes away the ability for the mum and dad investors to convert their existing properties. It essentially directs people into institutional investors producing this type of property. We’re going back to the old boarding house of the old days. All of this is driven by Council and it’s an absolute step backwards right now, Ahron.
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Ahron Young: How are other states dealing with this issue from what you’re seeing?
Ian Ugarte: Well, other states have a number of different policies. Every state in Australia has the ability for a, what we call, a fast-track process or private certification to approve micro-apartments and co-living. Now I know mum and dad investors in other states that have had negative geared properties and they’ve been affected by COVID. They’ve had approval within 10 days. Two to three weeks after that, they’ve had their property converted into micro-apartments, creating a real community.
Ian Ugarte: In New South Wales, it’s the only place that’s not happening. The proposal is absolutely horrendous. It’ll create a blue light on community, so the proposed changes will create illegal, underground slumlord houses. If we cherry pick the best of out of every state and put it together through a private certification, then we’ll get a really great outcome.
Ian Ugarte: Now, the answer is not big business or big developers that are going to be imposed to put these boarding houses together. The answer to the affordability problem is quite simply the mum and dad investors that have one to two investment properties. If we get this right, in the next 12 months, we could create two million brand new micro-apartments or front doors, so that people can get out of despair, insecurity, and fear into some hope, certainty, and confidence, and some freedom of choice because not only will the investors have extra money, but the people that living in the property will save one third to one half, and have extra money in their pocket too. No one will lose out of it.
Ahron Young: All right. Ian Ugarte from Small is the New Big. Really appreciate your time. Thank you.
Ian Ugarte: Thank you, Ahron. Thanks for having me on again.
WANT TO KNOW MORE?
If you’re a property investor interested in the Boarding/Rooming or Micro-Apartment strategy, find out how, and where to invest around the country to create much needed affordable accommodation AND grow your own cash flow positive property income HERE.