But it has already said it wants to create new dwellings pitched at those on a "moderate" or "intermediate" income - as well as replacing existing houses for low-income residents and creating new market-rate apartments. UrbanGrowth NSW, the agency charged with stimulating new dwellings through inner Sydney, is still working on plans for the redevelopment of the area around the rail line between Central and Redfern stations. Troy Daly, program director for UrbanGrowth's Central to Eveleigh project, said there was now a growing challenge in the market for households with a combined annual income of between $100,000 and $150,000, who would struggle to buy property near where they needed to work – especially in inner city areas. To this end, his agency wants to work with community housing providers to create dwellings targeted at this demographic.



Andrew McAnulty, chief executive of social housing provider Link Housing, said policy had, as yet, done little to meet the needs of middle-income earners.

"A lot of the discussion now is with people on good salaries, who have worked hard, who have got good jobs, who are essential for the economy of Sydney, who are saying 'I need to live somewhere else if I'm going to own a nice home'." Mr McAnulty said leadership was needed at the early stage of new housing developments to target a proportion of dwellings at different income levels. "Say if there's a development in Eveleigh, and a home costs $300,000 to build, but it is worth $800,000. You could sell a half share of it for $400,000," Mr McAnulty said. This type of dual ownership model, targeted at middle-income earners, is used widely in the UK and Europe but has not yet been adopted in Sydney. But this could start to change. Planning Minister Rob Stokes said: "A range of mechanisms are being examined and we are working closely with the community housing sector and the development industry."

It is good that they are. Even the property industry admits the current situation, in which the median NSW house price is expected to reach $1 million, will force nurses, police and paramedics out of the city. "Given the average person in NSW had yearly earnings of $77,600 in the last quarter of 2014, even in a two-income family, who can afford a house in Sydney?," said the President of the Real Estate Institute of NSW, Malcolm Gunning. "Home ownership matters. How do we expect to keep our best and brightest? Our nurses, firefighters, policemen and teachers?" While housing stress is classified as anyone who spends more than 30 per cent of their income on housing, tenants living in affordable housing apartments or houses are given a discount on their market rent and generally will not pay more than 25-30 per cent of their income on their rent or mortgage. The type of intermediate housing being talked about at the Central to Eveleigh development would be in addition to the provision of new affordable housing.

Link Housing's Mr McAnulty said, in a development of 20,000 new dwellings, for example, the government could specify 5 per cent for social housing, 5 per cent for low-cost rental housing, and 5 per cent for intermediate housing. "Then you can do the other 85 per cent with as many expensive town houses as you want," Mr McNulty said. This breakdown would be a significant increase on current affordable housing targets in inner Sydney. Only 2 per cent of new developments in the City of Sydney are reserved for affordable housing tenants, far short of the Council's 2030 target of 7.5 per cent. The rate of new developments dedicated to affordable housing tenants in London is 35 per cent while in Amsterdam 30 per cent of new developments must fall under affordable housing.