19 Apr The evolution of boarding houses
Since the early days of settlement, boarding houses have offered furnished, lower cost rental accommodation that is easy to move in and out of. The traditional boarding house is typically a large residence with bedrooms let out individually to lodgers. Sometimes bedrooms are fitted with a hand basin or even an en-suite bathroom and kitchenette, but generally boarders share the use of communal kitchen, bathroom and laundry facilities as well as dining, lounge rooms and often a courtyard. There are still a significant number of traditional boarding houses in NSW, although relatively few these days offer full board (meals and clean linen).
The boom in residential flats following strata legislation in the 1960s provided a growing supply of rental accommodation in competition with boarding houses. Many who could afford it chose modern self-contained units, eroding the traditional boarding house customer base of working singles and couples. Together with the cost of stricter fire safety measures and rising insurance premiums and utility charges, this contributed to many boarding houses struggling financially and becoming rundown because owners could not afford their upkeep.
From the 1970s, traditional boarding house numbers slowly declined through conversion to more lucrative uses such as backpacker hostels and upmarket residences.
Recognising their important role as a scarce supply of accommodation for lower income earners, the State Government introduced a range of financial measures to support boarding houses and help stem their loss. These measures are still in place – a land tax exemption, cash grants for fire safety upgrading and a requirement that council rates be levied on a residential rather than commercial basis.
In the 1980s, legislation was introduced to require that councils must consider the impact on the housing market of an application to develop a boarding house (State Environmental Planning Policy No 10 – Retention of Low Cost Rental Accommodation). Known as SEPP10, this also provided a basis for councils to negotiate contributions from developers to help fund the provision of substitute low rental housing as a condition of approval for the conversion.
Enter…The New Generation Boarding House
In 2009, SEPP10 was repealed and its provisions were updated and transferred into the Affordable Rental Housing SEPP. But more significantly, the new SEPP also introduced State-wide provisions allowing the development of a ‘new generation’ style of boarding house.
The new generation model allows boarding rooms to include en-suite bathroom and kitchen facilities, at the discretion of the developer. This was inspired by an emerging trend by operators to provide these facilities when traditional boarding houses were upgraded or extended. It typically provided a significant boost to their financial viability while creating accommodation attractive to the broader group of people seeking more affordable and flexible rental housing.
While some councils supported this trend, others did not. The new SEPP overcame this uncertainty by establishing consistent base-level standards for new generation boarding houses across the State.
Many of the groups that once relied on traditional boarding houses – singles and couples in lower paid occupations, casual and shift workers and uni students – are rediscovering the lower cost, flexibility, safety, comfort and social interaction that new generation boarding houses offer.
Investors are discovering that well-designed and located new generation boarding houses provide high and stable yields supported by high demand, low running costs and vacancy rates, the land tax exemption and the residential rating concession. And the expanded Boarding House Financial Assistance Program offers generous grants to offset construction and upgrading costs.
The Affordable Housing SEPP provisions are very flexible and have enabled a wide variety of accommodation styles to be developed in response to local markets.
Approval has been given for large inner city projects of 50+ boarding rooms with en-suite bathrooms and communal kitchens targeting uni students and ‘Gen-Y’ working singles.
The provisions have also enabled approval of traditional style boarding houses that had been established informally, thus bringing the fire safety, health and amenity of these premises under effective local council control.
And a growing number of medium-size new generation boarding houses are being built in middle ring metropolitan Sydney close to shops and public transport. These combine cutting-edge architecture with contemporary features such as galley kitchens and mezzanine sleeping lofts.
After years of decline, the new generation provisions are reinvigorating the boarding house industry and are opening up new accommodation opportunities for the growing population seeking more affordable and convenient rental housing.