Beds, not homes

The number sits in Randwick City Council's own February 2026 meeting wrap-up, stated plainly and without spin: co-living student housing is "accounting for 90% of all residential development in the area", approved or in the pipeline.

Not most of it. Nine tenths of it. In a corridor that runs through Kensington and Kingsford, the new residential building going up is overwhelmingly beds for students, and the council that signs off the paperwork has now written to the Planning Minister asking for the state incentive driving it to be removed.

This is not a story about a developer breaking a rule. Every operator in this corridor is building lawfully, to a bonus the state government wrote into planning law and told them to use. The rort, if it is one, is upstream. It is in the incentive design.

01The 90 per cent line

Start with the figure that carries the least argument. In its February 2026 council-meeting wrap-up, Randwick City Council recorded co-living student housing "accounting for 90% of all residential development in the area", counting projects both approved and in the pipeline. In the same wrap-up the council formally asked the Planning Minister to remove the state density-bonus incentives behind that skew.

Read that carefully, because the wording matters and we are keeping to it. "Approved or in the pipeline" is not the same as "built". Some of these rooms exist; many are consents and applications still moving through the system. But that is the point the council is making. The forward book, the pipeline that tells you what the corridor becomes, is nine parts student bed to one part everything else.

A council does not usually ask the state to take away a tool that fills its development pipeline. Randwick is asking. That is the tell that the mechanism, not the volume of building, is what has gone wrong here.

02What a density bonus actually does

To see the lever you have to name it. Under the state's Housing SEPP (a State Environmental Planning Policy, a piece of head-office planning law that overrides local controls), co-living housing attracts a density bonus. In a zone where residential flat buildings are permitted, a co-living scheme may have a floor space ratio up to 10 per cent above the maximum the local rules set for residential accommodation, if the extra floor space is used only for co-living ⁴. In plain terms, if you build the category the state wants to encourage, you are allowed more floor space, and so more rooms, on the same block than the local rules would otherwise permit.

The Housing SEPP has no separate student housing category; when it was drafted, the state said off-campus student housing developers would use the co-living provisions ⁵. The student schemes in this corridor are what the council's own record calls co-living student housing ¹, so they sit inside that favoured category. So the bonus does exactly what a bonus is designed to do. On a given site in this corridor, a student or co-living scheme can pencil out at a scale that a building of ordinary apartments, family homes, the housing a nurse or a bus driver actually lives in, cannot match. Land is priced on what you are allowed to build. When the state hands one product a size advantage, that product wins the land.

The operators building to it, the named student-housing firms that run this asset class nationally, are lawful applicants doing what the incentive invites. There is no allegation against any of them, and none is warranted. They are reading a state price signal and responding to it. That is what a price signal is for. The question this piece asks is who wrote the signal, and whether they meant for it to consume an entire corridor's housing supply.

Correction, 7 October 2026. This section said the Housing SEPP gives "certain kinds of housing" a density bonus allowing "more floor space, more height, more rooms", and that purpose-built student accommodation and co-living both sit in the favoured category. The bonus in the policy belongs to co-living housing: up to 10 per cent more floor space than the local maximum, in zones where residential flat buildings are permitted ⁴. The policy has no separate student housing category, and off-campus student housing uses the co-living provisions ⁵. The section, its fact box and the opening figure now say so; the policy is cited directly.

03Beds counted against homes

Local reporting has put a raw shape on the imbalance. Across the roughly 2.5 kilometre stretch, two outlets counted over 5,000 student rooms against under 500 homes, a figure that reads as a ten-to-one skew.

We flag that caveat deliberately, because it is the honest thing to do. A student room and a home are not the same unit. A single family dwelling houses a household; a student building packs many rooms into the footprint one home might occupy. Comparing 5,000 rooms to 500 homes therefore mixes two different things, and the ten-to-one ratio it produces overstates the loss of housing measured properly. The 90 per cent figure, which counts residential development against residential development, is the cleaner number, and it is the one to lean on.

The rough count still tells you something the clean figure cannot: the physical texture of the corridor. Whatever the exact ratio, the buildings going up are lodging, not households. And lodging, however lawful and however needed by students, is not the general housing supply that a family or a shift worker draws on when they look for somewhere in the same postcode to live.

04The bypass, and the ask to switch it off

This is where the corridor connects to a pattern The Rort tracks across councils: The Democratic Bypass. The shape is always the same. A decision that a community would ordinarily weigh through its elected council is instead pre-decided at the state level, encoded as an incentive or an override, and handed down as a setting the council must simply administer. The local body keeps the letterhead and loses the lever.

In Kensington and Kingsford the bypass is not a single rezoning or a contested vote. It is the density bonus itself. The Housing SEPP set the incentive; the market read it; the corridor filled with beds; and the council's role narrowed to processing the consents that followed. When a body asks the state to remove one of its own tools, it is telling you where the real decision was made. It was not made in the chamber.

Mayor Dylan Parker put the imbalance in one word, on the record. He called the skew "perverse".

When a council asks the state to take away the tool filling its pipeline, it is telling you where the decision was really made.

That is a strong word from an elected official about a state setting, and he is entitled to it: a public statement by a mayor on his own council's public conduct is fair to report. It is also a precise word. A perverse incentive is one that produces the opposite of what it was meant to produce. The Housing SEPP density bonus was written to add housing. In this corridor, on the council's own reading, it has added beds while general housing supply that families and workers can use goes the other way.

The families and workers are who pay here, in the quiet currency of a corridor that no longer builds for them. The students who fill the rooms are not the problem; they need somewhere to live too. The problem is a single-product incentive with no throttle, running through a stretch of city that was also meant to hold everyone else.

05What happens next

Nothing in the record before us alleges wrongdoing by anyone. There are no misconduct findings, no adverse court result, no improper vote. What there is, is a council reading its own pipeline, not liking the shape of it, and asking the level of government that set the incentive to reconsider. Whether the Planning Minister acts is the state's call, not Randwick's, which is precisely the mechanism this piece is about.

The Rort will follow the response. If a state incentive can tilt a whole residential corridor to 90 per cent one product, the design is the story, and the design is the thing that can be changed. Watch what the Minister does with the council's request. That answer will tell you whether the bypass is a bug the state is willing to fix, or a feature it intends to keep.

If it's a rort, we cover it.