Plan affordable rental housing

Providing and maintaining affordable housing is one of the objectives of the NSW Environmental Planning and Assessment Act 1919.

To assist in meeting this objective, the NSW Government developed the State Environmental Planning Policy (Affordable Rental Housing) 2009, a planning policy that encourages new, and retains existing affordable housing. Read more about increasing available rental housing.

Through the regional planning process, the NSW Department of Planning and Environment has foreshadowed that it will require councils to prepare local housing strategies. These must consider affordable housing needs and strategies to provide affordable housing. Access our 'housing snapshots' designed to help you understand housing demand and housing market and supply issues by region and sub region.

Local government has an important role in planning for affordable housing and providing opportunities for a diverse range of housing types to be developed. Read more about the role of local government in creating affordable housing.

The Affordable Rental Housing SEPP also contains provisions which aim to retain affordable rental housing. These provisions enable local councils to impose a levy on a development if it is going to result in the loss of existing low cost rental housing. Funds collected in this way are then used by the NSW Government to support the development of boarding house accommodation in this location.

The NSW Department of Planning has developed guidelines for retaining existing affordable housing which detail how to implement these provisions, including when and how to impose a levy and what to do with the funds collected.

Payment and transfer of levies collected

The Minister for Planning has issued a direction under section 94G of the Environmental Planning and Assessment Act 1979 requiring the consent authority, upon receiving the contribution in the form of a levy, to transfer it to the Secretary, NSW Department of Communities and Justice. These contributions will be used to fund the Boarding House Financial Assistance Program and provide financial assistance to support the construction of new, self-contained boarding house accommodation.

Local councils should forward contributions together with the completed Details of Contribution Form to:

Manager, Centre for Affordable Housing
Department of Communities and Justice
Locked Bag 4001
Ashfield BC NSW 1800

The State Environmental Planning Policy (Affordable Rental Housing) 2009 was introduced in 2009, and amended in 2011, to increase the supply and diversity of affordable rental and social housing in NSW.

The Affordable Rental Housing SEPP provides incentives for some residential developments when they include affordable housing as well as encouraging new affordable rental housing that is compatible with its surroundings and in locations that are well served by public transport. It covers housing types such as:

• villas, townhouses and apartments which contain an affordable rental housing component
• secondary dwellings (also known as granny flats)
• new generation boarding houses
• group homes
• social housing
• supportive housing

For more information about the Affordable Rental Housing SEPP, go the NSW Department of Planning website.

The Environmental Planning and Assessment Act 1979 provides for the use of negotiated planning agreements, which are agreements entered into by a planning authority and a developer.

Under a planning agreement, a developer can agree to provide or fund affordable housing (among other things), usually in exchange for some incentive such as a density bonus or land contribution.

Local government can play a major role in facilitating and developing affordable housing in NSW. Councils plan to ensure there is an appropriate supply and mix of housing to meet community needs and can encourage the construction of affordable housing by offering incentives to developments which will include it.

A number of councils are already involved in some innovative projects to develop affordable housing, involving private and community partners, for example, Waverley Council, Canada Bay Council, Randwick Council and Clarence Valley Council.

If you are developing a local housing strategy, Housing Snapshots provide sub-regional and regional overviews of housing demand, the housing market, housing supply, gaps in supply, including examining affordable housing. The Local Government Housing Kit has useful information about how to prepare housing strategies and what you will need to include. This Kit also contains a comprehensive database which, along with the Housing Snapshots can help you to understand the housing needs in your area as well as provide a rationale to support your strategy. Most of the data in the Housing Snapshots is from the Kit database.

The Greater Cities Commission has released a Discussion Paper on a Six Cities Region which is comprised of Lower Hunter and Greater Newcastle City, Central Coast City, Illawarra Shoalhaven City, Western Parkland City, Central River City, and Eastern Harbour City.

This follows the Greater Sydney Region Plan, A Metropolis of Three Cities which included the Western Parkland City, Central River City and Eastern Harbour City.  The Three Cities were comprised of six districts – Central City, Eastern City, North District, South District and Eastern City.

The rest of NSW was divided into nine planning regions – Central Coast, Central West and Orana, Hunter, Illawarra Shoalhaven, New England North West, North Coast, Riverina Murray, South and East Tablelands and Far West NSW.

The Six Cities Region Discussion Paper states that “Housing is repeatedly identified by the community as one of the most significant issues facing Greater Sydney.  It is also a priority across regional NSW, with Infrastructure Australia recently identifying the ‘availability, diversity and affordability of housing’ as the primary infrastructure gap in regional areas.”

In addition, the Discussion Paper states that “The Commission will work with local councils, state and federal agencies and industry to improve delivery of affordable housing, including new financing mechanisms, with a 10 per cent affordable housing target for new rezonings where there will be a housing uplift.” Further, that “The City Plans will set a target of up to 30 per cent for the proportion of social and affordable housing in residential developments on government land.”

As local government prepare or update local housing strategies to consider and respond to the needs of their communities, including for affordable housing, DCJ has prepared District and Regional Housing Snapshots, designed to assist.  DCJ has developed an Overview, as well as a more detailed examination of Housing Demand, the Housing Market, Housing Supply and the Gap for each District or Region with a particular emphasis on affordable housing and the needs of lower and moderate income households.

These Housing Snapshots will also be useful for community housing providers, other non-government organisations, planners and others, to help understand local housing need.

The Housing Snapshots provide information on housing need by District and Region as well as by local government area.

Districts

The graph below demonstrates that Greater Sydney is losing low and moderate income households, despite an overall increase in the total number of households between 2016 and 2021. There has been a significant increase in high income households in Greater Sydney over this time frame.  The Rest of NSW has seen a significant increase in low income households between 2016 and 2021 – suggesting that lower income households are leaving Sydney for more affordable regional areas.

The next graph indicates that it is not low income rental household which are leaving Greater Sydney – as they have increased faster than the population and in spite of a loss of low income households between 2016 and 2021. This implies the need for an increased supply of affordable rental housing. The Housing Snapshots give insights into these changes in the Districts within Greater Sydney and in the Regions in the Rest of NSW.

The Housing Snapshots provide information on housing need by District and Region as well as by local government area.

• Central City (update with 2021 census data)
• Eastern City (update with 2021 census data)
• North District (update with 2021 census data)
• South District (update with 2021 census data)
• Western City (update with 2021 census data)

Regions

• Central Coast (update with 2021 census data)
• Central West and Orana (update with 2021 census data)
• Hunter (update with 2021 census data)
• Illawarra Shoalhaven (update with 2021 census data)
• New England North West (update with 2021 census data)
• North Coast (update with 2021 census data)
• Riverina Murray (update with 2021 census data)
• South and East Tablelands (update with 2021 census data)
• Far West (with 2021 census data)

Note that the landing page for each Housing Snapshot provides an Overview of the District or Region. Scroll down to the links to additional information on What’s happening with demand; What’s happening in the housing market; and What’s happening with supply and is it a good match.

Most of the data in these snapshots is available from the Local Government Housing Kit database. Assistance in preparing a housing strategy is available in the Local Government Housing Kit.