Kiama’s housing future is at a crossroads, and Kiama’s Director of Planning, Environment, and Communities Ed Paterson isn’t shying away from the tough conversations. 

In an era where political spin often overshadows straight answers, his interview with Bernie Hems on KCR’s Council Counsel was refreshingly direct.

Paterson didn’t just explain the Draft Housing Strategy V2, he acknowledged past missteps and outlined a plan to give Council more control over development. 

This strategy is one of the most important documents the community can have input on, as it will determine where and how housing is built, what infrastructure is needed and how to balance growth with maintaining Kiama’s character. 

With housing pressures increasing, this is a critical moment for residents to engage in shaping Kiama’s future.

Paterson explains Kiama’s 900-home target stems from the Federal Government’s goal of 1.2 million new homes by 2029. These homes must come from already zoned areas. Key locations include South Kiama, Golden Valley and Henry Park at Kiama Downs. While some of these developments are underway, others are in the planning stage. 

Hems questioned whether infrastructure concerns, particularly roads and schools, were addressed in South Kiama’s approval. Paterson acknowledges community concerns and admits that while agencies like Sydney Water and Transport for NSW reviewed the plans, gaps remain. 

“The modelling we’ve seen suggests schools don’t have immediate concerns,” he says, “but I think the issue is with their modelling. They assume we can just add demountables instead of planning proper expansion.”

He argued the new strategy aimed to avoid reactive decision making by ensuring infrastructure is considered before approvals, not after.

When asked about the structure plan for the Kiama Urban Expansion Area, he described it as a high-level blueprint mapping out roads and transport links, school and town centre locations and how developments connect to infrastructure like Bombo train station.

He confirmed rezonings must align with this plan, preventing ad hoc developer-led proposals. 

“The structure plan gives us the ability to say no,” he emphasises.

Paterson’s honesty is striking. He acknowledged past planning lacked foresight and school infrastructure modelling has been flawed. Instead of defending past decisions, he focused on how the new housing strategy ensures Council is proactive rather than reactive.

He emphasised that while council zoned land, developers were essential to building homes. Without their involvement, the housing strategy would have been meaningless. 

Paterson said the process had been strictly regulated, with legal oversight, independent panel members and clear assessment criteria.

On the topic of the urgent need for housing diversity, Paterson was asked what solutions were in place to increase rental availability and provide more affordable options for younger residents and workers.

Paterson explained Kiama’s property market, combined with high construction costs, had led to a trend where landowners built larger homes instead of townhouses or apartments. 

This lack of smaller, affordable dwellings had forced younger residents to leave the area, while older residents who wanted to downsize had no suitable options. The strategy aimed to encourage medium-density housing, such as townhouses and secondary dwellings.

Seven per cent of Kiama’s housing stock was used for short-term rentals and 16 per cent of dwellings were classified as unoccupied, with even higher vacancy rates in areas like Werri Beach. 

Paterson acknowledged many short-term rentals were owned by Sydney investors, a longstanding trend in Kiama. While Council had limited power to regulate this, he noted the state government had recognised the problem and was exploring reforms, including taxation changes and planning restrictions. 

He referenced Byron Bay’s pilot program, where short-term rental days had been capped at 60 days annually.

Some residents believed building a new hotel or motel could have reduced demand for short-term rentals. Paterson agreed this could have helped, particularly in Kiama and Gerringong, but noted zoning already allowed for hotels.

Kiama lacks social housing - as of last December, 74 households were on the waiting list, a number that exceeds the total number of social housing properties in the area. With most social housing tenants staying long term, applicants could face a wait of well over 10 years.

Paterson acknowledged the growing demand, particularly among older women, and said Council was working to identify suitable land and partner with community housing providers. 

He also highlighted state government incentives, such as height bonuses for affordable housing projects, but noted that low density zoning had made Kiama less attractive for social housing development.

Social housing in Kiama has grown at a slow rate, increasing from 56 dwellings in 1964 to 67 in 2021, meaning only 11 homes were built in nearly 60 years.

Paterson said Council was exploring a regional affordable housing scheme, where developers would contribute to a fund supporting social housing across the Illawarra. However, without market interest, solutions remained challenging.

Hems also asked whether Kiama could secure more social housing, given funding available from the state and federal governments. Paterson explained most funding was directed to housing providers but Council could still play a role by making council-owned catalyst sites available for social housing projects through partnerships.

He referenced research from Business Illawarra and housing expert Judith Stubbs, which highlighted that land provision by councils could be a key strategy for increasing social and affordable housing.

Paterson welcomed the idea of a community panel of experts, a suggestion from housing expert Dr Tony Gilmour (listen to interview with Dr Tony Gilmour here). Paterson noted councillors had already begun planning the forum to facilitate open discussions on housing challenges and future planning decisions.

“The extended exhibition period that Council has granted allows us to do more of this work,” he said.

He confirmed further community panel discussions were being planned and he was working with the Kiama Business Network to organise them. 

Paterson said the goal was to have Draft Housing Strategy V2 adopted by mid-year, with the employment zone strategy following soon after. Once approved, it would be opened for public consultation.

It is clear the conversation on Kiama’s housing future is far from over.

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