NSW Government announces new SSD pathways to incentivise affordable housing

The NSW Government has announced proposed reforms to the State Environmental Planning Policy (Housing) 2021 (Housing SEPP) intended to incentivise the provision of affordable housing in NSW.

Snapshot

• The reforms provide for new or expanded State Significant Development (SSD) pathways for developments which deliver social and affordable housing.
• Other key proposed amendments include exemptions from State infrastructure contributions for social and affordable housing providers and increased self-assessment powers of government agencies.
• The reforms are expected to come into effect in late 2023.

Proposed amendments targeted at residential housing developers

The proposed amendments make changes intended to incentivise both private developers and government agencies.

Under the reforms, developments with:

• a capital investment of $75 million or more; and
• a minimum of 15% of total gross floor area allocated to affordable housing,

will be able to be assessed as State significant development (SSD).

In addition, developments which meet this criteria will also be eligible for bonus:

• Floor Space Ratio (up to 30%); and
• Height (up to 30% above Local Environmental Plans).

The reforms do not change other requirements for affordable housing (such as to use the relevant development for affordable housing for at least 15 years).

Additional reforms targeted at NSW Government Agencies

Proposed amendments will also be introduced to target the provision of housing by State-owned housing corporations.

The key reform will involve expanding the existing SSD pathway which currently allows the NSW Land and Housing Corporation (LAHC) to undertake development of the purposes of the Housing Act 2001 if it has an investment value of more than $100 million.

This pathway will be expanded by amending the criteria to developments of more than 75 dwellings and a capital investment value of $30 million or more. The pathway will also be open for the Aboriginal Housing Office (AHO).

Landcom will also be able to access this pathway for projects containing at least 50% affordable housing.

Other reforms include:

• Amending existing self-assessment powers for LAHC and the AHO (increasing from 60 dwellings and 2 storeys to 75 dwellings and 3 storeys);
• Reducing the minimum lot size to 400sqm for dual occupancies being undertaken as complying development by LAHC, AHO or Community Housing Providers.
• Making social and affordable housing providers exempt from State infrastructure contributions.

Impact of the proposed reforms

Only high level details of the reforms have been released at this stage. The exact form of the draft legislation remains to be seen and will need to be examined carefully.

Having access to the SSD planning pathway brings with it a number of changes for how relevant housing developments will be assessed, including that:

• The consent authority will be the Minister for Planning and Public Spaces.
• Applications for consent may be referred to the Independent Planning Commission where 50 or more unique objections have been made in relation to the development, a reportable political donation has been made by the applicant or an objection to the development has been made by the relevant local Council.
• Consent may also be granted despite a development being partially prohibited by an environmental planning instrument (see section 4.38(3) of the Environmental Planning and Assessment Act 1979 (NSW)).

If you would like to discuss how the proposed reforms might impact your business, please contact us.

By Peter Briggs (Partner), Brigitte Rheinberger (Solicitor) and Caitlin Turner (Paralegal).