Media release

4 November 2026

A suite of funding options, including land tax reform, a levy on short-term holiday rentals and better use of government-owned land could be considered to unlock billions of dollars for desperately needed social and affordable housing across NSW, new economic analysis has found.

The McKell Institute report, Funding Community Housing, commissioned by the Community Housing Industry Association NSW (CHIA NSW), identifies ways the NSW Government could raise $26 billion over the next decade to invest directly in social and affordable housing.

CHIA NSW is calling for new investment into a dedicated Community Housing Enabling Fund (CHEF), providing long-term funding certainty to support the delivery of 50,000 new social and affordable homes by 2050 through partnerships with not-for-profit community housing providers (CHPs).

The report finds targeted land tax reform alone could raise almost $26 billion over the next decade, with other options including a short-term rental levy, capturing windfall gains from rezoning, redirecting Commonwealth housing debt repayments and making government-owned land available for community housing.

The findings come as more than 72,000 NSW households remain on the social housing waitlist, including more than 13,000 assessed as being in urgent need.

CHIA NSW CEO Luke Achterstraat said providing funding certainty for the community housing sector was critical.

“We know the NSW Government is under pressure to fund a whole range of services, but we also know the housing crisis isn’t going away. We commissioned this research to generate policy discussion as the state faces a burning platform on how to fund the growing housing needs of the future,” Mr Achterstraat said.

“We want to see a dedicated fund that puts money straight into social and affordable housing, so there’s certainty about where it’s going and what it’s delivering. Existing funding must be turbocharged and specifically earmarked for community housing, but a conversation about where ongoing funding is found is warranted – particularly as NSW falls behind in its fair share of the GST.

“The NSW Government has a range of levers it could pull to help address a housing crisis The question for the NSW Government, and indeed all political parties in the lead-up to the next state election, is which of those levers they’re willing to pull.”

Mr Achterstraat said the government deserves credit for its record housing investment – but needed to be matched by downpayments for the future.

“More than half the state’s four-year capital program is going to transport while the government’s entire $6.6 billion housing investment amounts to less than six per cent of that program, and is even spread over a longer period. We need roads and railways, but we also need homes for the people who use them.

“We need to move beyond funding cliffs and establish a long-term investment pipeline that gives community housing providers the certainty to keep building homes year after year.”

The report examines a range of potential funding measures, including:

• Land tax reform: Targeted changes to existing rates could raise $25.9 billion over 10 years, while retaining the family home exemption and existing tax-free threshold.
• Short-term rental levy: A 7.5 per cent levy – similar to the levy in place in Victoria – on short-term rental accommodation such as Stayz and Airbnb could raise approximately $135 million annually.
• Rezoning windfall charge: Capturing a share of land value increases from rezoning could raise around $80 million annually.
• Commonwealth housing debt: A national agreement with states and territories to redirect historic loan repayments could free up approximately $270 million over four years.
• Government land: Making surplus government land available for community housing could reduce development costs by hundreds of millions of dollars.

McKell Institute chief executive Veronica Newman said the analysis demonstrated how changes to existing revenue arrangements could support substantial new investment without adding to state government debt.

“Our modelling shows you could raise $26 billion over the next decade through extremely targeted changes to land tax rates that wouldn’t affect the family home or the current tax-free threshold,” Ms Newman said.

“Land tax reform has massive potential because it offers the means to raise game-changing revenue without affecting those struggling with cost of living challenges, but there are other really practical revenue raising measures that could also work.

“Surplus government land could also be leased on a long-term basis to community housing providers. This would be non-cash and our modelling shows it could save about $100,000 to $150,000 per home.”

Mr Achterstraat said community housing providers are ready to deliver more homes but need long-term funding certainty.

“Community housing providers have the expertise, partnerships and capacity to build more homes. What they need is the certainty to plan and invest over the long term,” Mr Achterstraat said.

“We’re not suggesting there’s one simple fix to the housing crisis, but this report shows there are options on the table, and we can’t afford to leave them unexplored.

“If we’re serious about fixing the housing crisis, the investment needs to match the size and scale of the problem.

“With the state election approaching, we’re calling on all parties to put forward a serious, long-term plan for funding the social and affordable homes NSW desperately needs.”


Media contact: Bron Matherson (CHIA NSW), 0438 844 765
Anil Lambert (McKell), 0416 426 72