Housing crisis could worsen as city slickers flock to regional NSW

By LAUREN FROST

City dwellers are continuing to flock to regional NSW amid the rising cost of living. However, many regional areas do not have the infrastructure to support this migration and local residents are suffering the consequences.

Dr Laura Crommelin, Senior Lecturer in City Planning at the School of Built Environment, UNSW ARTS, Design & Architecture, has said, “some who are priced out of the city housing markets may be able to afford a more spacious, standalone dwelling in a regional area.”

“Those regional areas within striking distance of the city are increasingly popular with those who still might commute once or twice a week to the city for work, but spend most of their time living by the coast.”

However, Dr Crommelin notes that metropolitan areas have more employment opportunities compared to areas in regional NSW.

“Our major cities continue to offer a broader range of employment opportunities, which means they will continue to attract new residents. So, it’s unlikely smaller regional areas can substantially ease pressures for major cities, at least in the short-term.”

“And in any case, we’re seeing that rapid growth without proper planning can replicate some of the problems we face in urban areas in regional areas, such as housing affordability.”

“So we risk losing features of regional life that are often what attract people to move in the first place,” she continued.

Forced out of homes

With demand for housing already at an all time high in regional towns of NSW, rapid growth in these areas can lead to shortages that drive up rent and asking prices even further. This can force current residents out of town altogether. The higher salaries of individuals migrating from metropolitan areas can also increase prices.

Maiy Azize, spokesperson for national housing crisis campaign Everybody’s Home, echoes Dr Crommelin’s concerns.

“More and more Australians are experiencing housing stress and homelessness as the cost of rents rise and the search for affordable homes gets tougher,” she told City Hub.

“Our recent ‘Priced Out’ report found there are no regions in NSW where rentals are affordable for any essential worker on award wages. In every region across the state, an essential worker paying a typical rent would be in rental stress.”

“Those on lower incomes and support payments are stretched even further,” she added.

Tenants’ Union of NSW Chief Executive Officer Leo Patterson Ross is similarly concerned about housing affordability in regional NSW.

“The available housing in regional areas has not kept up with population changes, and this has come at a cost to communities already in place,” he said to City Hub.

“We’re seeing more and more people facing housing stress and homelessness because of the upward pressure on housing costs.”

COVID-19, Airbnb and a lack of affordable housing

Ross also noted that the pandemic, as well as short-term letting platforms like Airbnb, have worsened the situation, particularly in coastal regions.

“The COVID-19 Pandemic increased an already existing trend of many people moving to the regions,” he said.

“From July 2021 to June 2022 regional areas grew at 1.2% driven by internal migration. Many people migrated to coastal lifestyle areas such as towns along the South Coast. This drove rental prices up in the regions considerably.”

“Some landlords are choosing to convert their properties into short-term holiday rentals or keep properties as holiday homes, and this is negatively impacting renters by creating a shortfall in regular private renting stock,” he continued.

“Many of these short-term holiday rentals sit vacant between bookings while there are many local renters who are searching for stable housing.”

Additionally, Ross called to attention the “lack of sufficient community and public housing alongside a lack in private housing stock” in many regions of NSW.

“In many cases, the infrastructure in regional areas is not adequate to support this increased migration from cities. We need to see an increase in genuinely affordable housing alongside the creation of better infrastructure such as public transport, shops, schools, hospitals and roads,” he said.

Azize, spokeperson for Everybody’s Home, said that the current lack of social and affordable housing is the “biggest factor in the rental affordability crisis across regional NSW”.

“Regional Australia needs more social and affordable housing. Right now in regional NSW, there’s a shortfall of at least 76,800 social and affordable homes. The Federal Government must start building 25,000 social homes nationally every year to meet Australia’s shortfall, and match the scale of the crisis.”

“Everybody deserves a decent, safe, affordable place to call home,” she said.

Actions Taken

A spokesperson from the Department of Planning and Environment (DPIE) assured City Hub that, “This new Government is committed to working with councils and the development sector to make sure vital infrastructure is in place to support communities right across NSW especially in regional areas.”

“The Government recently introduced the Housing and Productivity Contributions Bill into the NSW Parliament to support housing supply by aligning infrastructure with new housing development in key growth areas, including the Illawarra – Shoalhaven, Central Coast and Lower Hunter,” they continued.

“Up to $700 million per year would be secured to support investment in vital community infrastructure such as roads, hospitals, parks, and schools.”

“This includes $1 billion over 10 years for grants to local councils for regionally significant facilities, like sporting complexes and open spaces.”

The spokesperson also noted that the DPIE will continue to “work closely with communities and councils to make sure social infrastructure that supports people’s quality of life and wellbeing is also prioritised as part of future regional planning.”

The initiative to support the development of infrastructure in regional areas of NSW is vital, according to Dr Crommelin.

“There is a concern that rapid growth outpaces investment and places more pressure on existing services – particularly health and education,” she said.

“It’s something policymakers need to anticipate and get ahead of so that infrastructure development can support growth, not just follow it.”

“Proactive, strategic planning informed by local knowledge can ensure population growth benefits regional cities and their residents first through improved local services, infrastructure and amenity.”

These changes must also be specific to the region and it’s unique needs. For example, if it’s popular amongst families, more medium to high-density dwellings may need to be developed. Further, if a town is popular amongst commuters, adequate public transport into metropolitan areas is a must.

However, Dr Crommelin has also stressed the importance of improving labour markets within regional towns.

“Reduced employment and career development options are considered a downside of relocating. There’s certainly a role for regional universities and campuses to help create local graduates, but how best to help them build a fulfilling career in non-metropolitan Australia is something we’re interested in looking into further.”

“Most importantly, growth needs careful management to ensure if regional Australia areas scale up, they maintain the overarching sense of community that make these areas appealing in the first place,” Dr Crommelin said.