Beautiful terraces line the streets of Paddington in Sydney, and unbeknown to many drivers and pedestrians along Moore Park Road, number 34 and 36 are in fact boarding houses.

Key points: UNSW survey found occupants of boarding houses approved since 2009 were closer in profile to typical renters than to traditional boarding houses lodgers

UNSW survey found occupants of boarding houses approved since 2009 were closer in profile to typical renters than to traditional boarding houses lodgers The survey found modern boarding houses were not suitable for those in need of affordable housing

The survey found modern boarding houses were not suitable for those in need of affordable housing Most occupants enjoyed communal living, and were overwhelmingly employed or in tertiary studies

The residents who live there, though, don't fit the stereotypical profile of a "traditional" boarding house lodger.

Shannon Hsu is 33, owns her own dance production business, sought to live in the building before it had finished construction, and is paying rent the equivalent of a small studio apartment.

"I thought it was a really interesting way of living," Ms Hsu said.

"You have your own space, but there's a focus on the communal area.

"I just moved in and we're about to have a dinner altogether."

The 'new' professional lodger

The stigma around traditional boarding houses stems from the occupants who are generally considered socially marginal, at risk of homelessness, or on welfare.

They generally have low rent — $250 or less according to listings online — communal facilities and are set up in older existing dwellings.

Local residents living close to potential boarding house developments, like those in Greenacre and the Northern Beaches more recently, overwhelmingly rejected DA approvals based on fears of overcrowding, increased vehicle traffic, crime and noise levels.

Labor's education spokesman and member for Lakemba Jihad Dib, was critical of new boarding house developers and told ABC Sydney last week that he backed residents' concerns that "boarding houses shouldn't be in residential streets".

What is a boarding house? A building that is wholly or partly let in lodgings

A building that is wholly or partly let in lodgings Provides lodgers with a principal place of residence for three months or more

Provides lodgers with a principal place of residence for three months or more May have shared facilities such as a communal living room, bathroom, kitchen or laundry

May have shared facilities such as a communal living room, bathroom, kitchen or laundry Has rooms, some or all which may have private or self-contained facilities Source: State Environmental Planning Policy (Affordable Rental Housing) 2009

But a new survey of recent boarding house developments, conducted by the City Futures Research Centre at the University of New South Wales and given exclusively to the ABC, found that occupants of recent boarding houses were much closer in profile to renters than those "traditional boarding house occupants on social housing waitlists".

The study was commissioned by the Southern Sydney Regional Organisation of Councils.

The research team sent surveys to 288 boarding house developments in central and southern Sydney, which had been recently approved under the NSW Department of Planning's Affordable Rental Housing State Environmental Planning Policy (ARHSEPP).

The aim of the policy, established in 2009, was to "facilitate the increased supply and diversity of affordable rental and social housing in NSW".

But the researchers notably found that recent boarding houses were "not a particularly affordable housing option" and were being developed as "micro-apartments" rather than dwellings for marginal households.

UKO Paddington has 26 rooms starting from $400 per week. ( ABC Sydney: Amanda Hoh )

Respondents were generally young female professionals, under the age of 34, with tertiary qualifications, were employed or studying, and did not own a car.

Sixty-seven per cent of respondents said they were in rental stress, with some 43 per cent paying less than $300 per week in rent, and 40 per cent paying more than $350.

"This isn't your stereotypical boarding house tenant — the single older male living off a pension or on low income," the report's lead author, Laurence Troy, said.

"We know these places are mainly catering to the student market and people who want another option of share housing.

"It's supposed to be targeted at the marginal renter, but that's not what's happening. That's a bit of a problem."

Ms Hsu pays $550 per week for a room at the UKO Paddington boarding house and is provided with a bed and linen, storage, kitchen appliances, bathroom and television.

The complex also has a communal kitchen, outdoor area, and bikes to borrow. The tenants generally sign three to six-month leases and occasionally get together for group social activities and dinner.

The rent eats up about 25 per cent of Ms Hsu's weekly income, but she said that it was comparable to rent she would pay for an unfurnished one-bedroom apartment in the same area.

Recent boarding houses are mainly occupied by tenants who are working or studying at university. ( ABC Sydney: Amanda Hoh )

"It's good for budgeting because you don't have to pay for bills," she said.

"It's not cheap, but it's affordable.

"I'm choosing this as opposed to living somewhere else because I like the idea of the added community but being higher end."

The NSW Department of Planning and Environment said in a statement that the ARHSEPP recognises that "people need different types of housing at different times in their lives," and that the Government "is committed to increasing housing supply, housing diversity and making housing more affordable".

New boarding houses 'filling a gap'

There were 1,062 registered boarding houses in NSW as of May 2019, according to the Department of Fair Trading.

Dr Troy said many more existed but "little checking was done" as to whether properties were operating as boarding houses after initial development approvals.

Many of the new boarding houses, like UKO, or one operated by Singaporean company Hmlet, were not on the list, although managers said they had registered as boarding houses.

A spokesman for the Department of Fair Trading said local councils were responsible for approving new boarding house developments, and that owners of the boarding houses were required to register with Fair Trading within 28 days of commencing operations.

Traditional boarding houses, like this property in Manly, charge less than $250 per week with short leases. ( ABC Sydney: Amanda Hoh )

Chrystan Paul, managing director of Hmlet Australia, said companies like his were trying to "reverse the stigma of typical boarding houses".

The company manages a 16-room boarding house in Newtown that charges $525 per week for a studio with a bathroom.

They have another 110 beds opening up in the next six months across different properties.

Mr Paul said affordable housing and boarding houses needed to be "considered separate" types of real estate.

"There's a risk of us appearing to be exploiting a loophole," he said.

"If anything, there are more controls that we have to adhere to.

"Real estate needs to adapt to the needs of the market.

"We have a demographic who are transitional, they are mobile, they don't want to be tied down to long leases."

Mr Paul cited one of his residents, who is a recruiter for Microsoft, aged in his late 20s, and who was looking for short-term leases because he travelled frequently.

"We have been borne out of need," he said.

"Co-living is now a thing."