Consider the featured image, a set of rubbish and recycling bins, and their spillover, on a footpath in Chippendale (at the intersection of Shepherd and Cleveland). Or consider the similar photo in Darlington. I am sure Sydneysiders have experienced worse. Adjacent to these are cars parked on-the-street at the kerb. We see this in places without lanes in the back.
Consider an alternative scenario, a set of 5 rubbish and 5 recycling bins serving 5 residences in a confined (perhaps fenced or landscaped space) instead of that parked car, and nothing blocking the footpath. The price for clear footpaths and rubbish bins not stored on the front porches of peoples homes except on collection day is about 1 parking space every five units. I believe this is a trade-off worth making.
There are of course other designs for waste collection. In Taiwan, waste collection is just-in-time, so the inventory buffer of waste does not accumulate outside the home. The garbage truck comes daily, and plays Beethoven’s Fur Elise (video), and everyone brings out their trash. Of course if you are not home at the time of collection, and have not made other arrangements, trash piles up inside the home instead of outside (worse for the residents, maybe better for society, to a point.)
In the Netherlands, there are dumpsters buried underground, and receptacles above ground. A vacuum powered garbage truck sucks the waste from the hidden bin. Street cleanup is also a cinch with that kind of equipment.
There is not necessarily one true way, but there are certainly many better ways, that would improve the daily quality of life for the people of Sydney.
To get a sense of how much this is worth, we can consider real estate prices. Today granny flats (Secondary or Accessory Dwelling Units), often have laneway access. On a per square meter basis, their rents are lower than street facing units. The difference is largely the premium people pay to avoid not walking past the sights and smells of rubbish bins. If they had better conditions, due to better waste management, they would be worth more, which would induce more construction, which would be ease the housing supply issues.