Tiny homes, big ideas: councils step up in the housing crisis

REINSW has been vocal about the need for Governments at all levels to understand the role they must play in the housing crisis, and to respond in kind. To roll up their sleeves and take action.

This includes local councils and thankfully, in recent times, we’ve seen a couple of examples of NSW Councils taking the initiative and getting creative to unlock new housing choices.

In Shellharbour, the council has initiated a trial of mobile tiny homes – small moveable homes built in trailers – enabling them to be registered like a vehicle.

It requires an amendment to the Local Environmental Plan to allow mobile tiny homes to be installed on existing residential properties without a development application, subject to strict conditions and approval by the NSW Government.

Obviously, such homes are not suited to everyone, however, in the context of low rental vacancy rates in the region, with an increasing number of people at risk of homelessness, it’s a move which at the very least is an attempt by council to be part of the solution.

It also serves as an example for other councils to investigate different avenues to increase supply in their local Government areas.

Prohibitive planning regimes are the enemy of new housing and innovative planning action is what all councils should be taking.

In the Riverina, Wagga Council recently passed a motion to pursue a pilot program to build 12 transitional housing units in response to the increased rate of homelessness in the city.

Described as compact one-bedroom dwellings, a feasibility report will be prepared to investigate the potential for shipping containers and prefabricated structures to be used as short-term low-cost housing on either council or NSW Government land for people in need.

Again, it’s micro in scale but at least it shows a willingness on behalf of the local council to think differently.

The new dwellings these initiatives may provide will only be a drop in the ocean in the context of what’s needed.

But they do represent a start and a willingness to be part of the solution. We should give credit where it’s due.

And the message to all councils is clear: take note - and take action.

Construction costs rising

Other Governments - local, state and federal - need to get creative too, to encourage new supply.

This is especially important as the private development market continues to battle constrained project feasibility driven, in part, by rising construction costs.

New Cotality research shows construction costs continue to rise, up 0.6 per cent nationally for the September quarter, while labour costs increased over the same period.

There’s a concerning irony in the fact that as dwelling approvals increase, so does competition for skilled trades, putting renewed pressure on those projects in the feasibility stage.

Balancing this pressure is the declining interest rate environment.

After holding the cash rate steady at its last meeting, it will be interesting to see if the Reserve Bank makes another cut on Melbourne Cup Day. At this stage it seems an each-way bet.

Either way, most economists predict only one or two more interest rate reductions in this easing cycle. Buyer demand for housing is robust and the cheaper money gets, the more money these buyers will have to compete with.

Without a large-scale injection of new supply, the more those without the means to compete will fall behind.