By CHRISTOPHER HARRIS
City of Sydney Councillor Linda Scott has urged the city’s Lord Mayor to work harder on housing affordability, pushing for support of a review into negative gearing.
Labor Councillor Scott backed a federal review of negative gearing at the national Labor conference on July 24-26, and wants the city’s Lord Mayor Clover Moore’s support.
Clr Scott said that Clr Moore and other councillors have shirked responsibility for the unaffordability of housing, and that someone needed to take action to keep the area affordable for teachers, academics and service staff.
“As part of the largest political movement in Australia, I work to take issues that matter in the City of Sydney to the national agenda to achieve change,” Clr Scott said.
“Unlike the 11 years under Lord Mayor Clover Moore, I don’t believe that writing letters, with no action, will meet the needs of our Sydney communities on national issues.”
But Clr Moore told City Hub that the city had delivered 858 new affordable housing dwellings with an additional 629 dwelling in the pipeline.
“The City of Sydney has exhausted every option we have available under current legislation to encourage affordable housing. We need state and federal governments to act- unfortunately Labor and Liberal governments at the state and federal level have utterly failed to address the issue,” Clr Moore said.
“Where allowed by the NSW government, we’ve introduced Affordable Housing Levies, we have amended planning controls and negotiated Voluntary Planning Agreements, we have transferred our land to community housing providers,and invested in affordable housing projects.”
However Clr Scott said she has put several proposals for affordable housing to council including developing council assets for affordable housing, working more with housing providers, as well as making the city competitive for affordable housing project by working with developers.
Clr Scott said the Lord Mayor should support a review of negative gearing, which she said could reduce the rate of increasing house prices.
“I do call on her to support my actions, to secure a review of negative gearing,” Clr Scott told City Hub.
According to ABS data from 2011, 60.7 per cent of dwellings in the City of Sydney local government area was rented, one of the highest proportion of rented properties in Australia.
Clr Scott refutes the notion that the removal of negative gearing would effectively shrink supply in the rental market and increase rent prices.
“That has been shown to be false, there has been lots of good analysis, when Paul Keating removed negative gearing, it was revealed in some cities that it was those local factors driving rents rather than negative gearing.”
However, Professor of Economics at the University of Sydney Jamie Alcock said the changes implemented briefly under former treasurer Paul Keating should not be used as an argument about negative gearing.
“A very short period of time tells you nothing about a long term equilibrium effect,” Professor Alcock said.
“Housing is very sluggish to supply and demand shocks.” Professor Alcock said that removing negative gearing could in the long term actually reduce housing supply in the rental market.
“All else being equal, and negative gearing is the only thing changing, you would assume there is reduced incentive, and of course the market is going to respond, and reduce capital flow and reduce supply of property in the long term.”