The free market will continue to fail people looking for affordable housing in Sydney unless the state government takes action, argues Professor Bill Randolph, Director of the UNSW City Futures Research Centre in the Faculty of Built Environment.

Writing in the Sydney Morning Herald, Professor Randolph says the public has lost faith in the planning system, which has become synonymous with meeting the needs of the development industry.

"We've seen what deeply divided cities turn into in the US. That's not a vision that the planners, let alone the rest of us, would welcome. Putting low-paid workers in cheap homes in sink suburbs with inadequate public transport, making them travel long distances, often at unsociable hours (think restaurant workers, health workers, personal care workers, office cleaners), to where these jobs are is not good for them and their families, or for a sustainable city," he says.

"A new approach must be vigorously pursued. We can no longer duck the critical issue - money must once more be put into developing homes for those on lower incomes in the places they need them. Twenty years of market-led solutions to the issue of housing affordability must be recognised for the failure it is. A properly funded affordable housing system needs to be integrated with planning reforms to support the delivery of an affordable housing market across the city.

"The good news is that we have the bones of a viable system. The federal Labor government's national rental affordability scheme, launched in 2008, has at last started to deliver a stream of new affordable rental homes for lower-income households. Together with the one-off affordable homes bonus provided by the economic stimulus spending of last year (yes, this was actually a success story), this means that, for the first time in years, the number of good-quality affordable homes in Sydney has actually increased.

"The revised Sydney Metropolitan Strategy, relaunched late last year after a period of review and reconsideration, makes significant moves in the right direction, including the promise of targets for affordable housing in major urban renewal projects. But it can't do this alone."

Read Professor Randolph's full opinion piece at SMH online.