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Overcrowded, Illegal Housing on the Rise in Sydney due to Poor Affordability, Report Finds

Sydney councils are being flooded with complaints about illegal and overcrowded housing, as a lack of affordable homes pushes people into substandard living conditions, new research shows.

Illegal granny flats, subdivided garages and severely overcrowded properties with more tenants than beds, are what cash-strapped Sydneysiders are increasingly turning to, according to a new report released on Monday by the Sydney Policy Lab at the University of Sydney.

“It’s an increasing problem,” said co-author of the report Professor Nicole Gurran. “Leaving affordable housing to the market hasn’t worked and doesn’t work. This is what the market produces,” Dr Gurran said.

Two children’s prams and three mattresses were found in this shed, which was illegally converted into a home for a family. Photo: Supplied by Fairfield City Council/Sydney Policy Lab.

The number of people living in severely crowded dwellings — classed as homelessness  — more than doubled in metropolitan Sydney between the 2011 and 2016 census, Dr Gurran said. Meanwhile, complaints about illegal dwellings have risen markedly over the past two years, the report found.

Dr Gurran said complaints about illegal dwellings across council areas involved in the study ranged from 10 per month to 80, with the majority found to be valid. She noted there were different approaches across the city – illegal granny flats were a top concern in Fairfield, but overcrowding of apartments was the issue in Waverley.

Although some of the dwellings complied with the planning system, many did not, raising significant health and safety risks to occupants. They were also increasingly being used as long-term solutions, did not come cheap and left tenants in a vulnerable position, the report found.

An example of unauthorised and unsafe extensions that people are living in. Photo: Supplied by Sydney Policy Lab.

While development control officers were reported to have been flooded with complaints about illegal dwellings, they felt they were just scratching the surface – with interviewees estimating about 10 per cent of unlawful dwellings were being brought to their attention.

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“Councils are not resourced to do proactive inspections,” said Dr Gurran. “And] there’s no point in identifying and prosecuting an illegally overcrowded boarding house or dwelling if there is no alternative for people. That places building inspectors in a really tough position.”

An enclosed balcony in a Haymarket apartment was advertised as a sunny, private bedroom. It was advertised for rent earlier this year for $225 a week.

Tenants in informal housing have little protection under current regulations, according to Leo Patterson Ross, senior policy officer at the Tenants’ Union of NSW.

“Big issues that come up are the quality of homes, a lack of repairs and maintenance, and then exploitative practices around bonds – where it doesn’t get lodged, and tenants never see it again – and pretty sudden evictions,” Mr Patterson Ross said.

He added international students and new migrants with little understanding of their rights were particularly exposed, giving examples of tenants having their passport confiscated by landlords who said they had the power to deport them if they did anything wrong.

Mr Patterson Ross said tenancy reform was needed to ensure rental protections for everyone.

A bed in a roomshare in inner Sydney which was advertised late last year for $125.

Both he and Dr Gurran added that boosting the supply of social and affordable housing was vital, as was better support for local governments to strengthen and enforce regulations. Improved tenant and specialist housing support and advice services, better education around rules and regulation were also urgently needed.

Recent research in the US estimated around 5 per cent of new housing was produced without planning permission, Dr Gurran said. With clear evidence of increasing illegal dwelling production in parts of Sydney, as well as a rise in informal and insecure rental agreements, she said further research was needed to determine the scale of the problem in Australia.

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“A lack of data about it means it’s also a policy blindspot,” Dr Gurran said.

State government acknowledged the severity of Sydney’s hidden housing problem last year, when the former minister for family and community services and social housing, Pru Goward, held the state’s first roundtable on overcrowding. However, some experts were doubtful it would lead to action.

More than seven months on, new housing minister Melinda Pavey was unavailable to provide an update, but a NSW government spokesperson said the new minister was being briefed on several matters, including the round table outcomes.

There had also been little update on a big data approach touted as the solution to cracking down on illegal boarding houses and slumlords taking advantage of desperate tenants.

The NSW Data Analytics Centre (DAC) project was announced almost three years ago by the Minister for Customer Service Victor Dominello, who was then the Minister for Innovation and Better Regulation.

A spokesperson for the minister said the centre had been working closely with several state and federal government agencies to collect and analyse information, that is currently being reviewed by relevant agencies. It is understood the centre worked with family and community services, Revenue NSW and Land and Property Information, on a project focused on overcrowding, that was overseen by Fair Trading.


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