Feasibility testing of permutations and combinations of Affordable Housing incentives

The State Environmental Planning Policy (Housing) 2021 (Housing SEPP) contains planning mechanisms in Chapter 2 to facilitate the delivery of Affordable Housing.

• Part 1 (Chapter 2) provides the legislative pathway for a local council to develop and adopt an Affordable Housing Contribution Scheme. This pathway enables a local council to require Affordable Housing contributions as a condition of consent under s7.32 of the Environmental Planning and Assessment Act 1979.
• Part 2, Division 1 (Chapter 2) provides planning (FSR) initiatives for in-fill affordable housing.

Since the Housing SEPP was made in 2021 there have been low volumes of Affordable Housing delivered under its Chapter 2 mechanisms.

What we did

Atlas undertook an in-depth review of the planning mechanisms to understand reasons for their poor uptake. This involved feasibility testing of whether there was a sufficient incentive for developers to deliver Affordable Housing.

Atlas made a series of recommendations on the Chapter 2 affordable housing provisions as well as on the Guideline Template for Affordable Housing Contribution Schemes.

The outcome

In December 2023 the NSW Government amended the Housing SEPP to increase the supply of Affordable Housing.

The amendment provides greater incentives to developers to include a minimum of Affordable Housing in new development and enables Government-owned agencies such as Land and Housing Corporation, Aboriginal Housing Office and Landcom to expedite the delivery of more housing.