Minister says ‘affordable housing’ definition needed as developers assured of density bonus

NSW developers will get a density bonus for building “affordable housing” within months, but the state’s Housing Minister Rose Jackson says the term has lost its meaning, and a new definition is needed to ensure the units are actually affordable.

Planning Minister Paul Scully on Friday assured developers a 30 per cent height and floor space bonus for apartment blocks containing at least 15 per cent affordable housing was imminent, despite earlier industry complaints the plan was impractical and needed to be rewritten.

The scheme was announced in June but practical issues – such as whether buildings that receive the extra height and floor space still need to comply with local planning controls about overshadowing, solar access and setbacks – are still being finessed. Some developers are holding off on proposals while they wait for the bonuses to be introduced.

“We’re hoping to get that locked away in the next couple of months,” Scully told a Western Sydney Leadership Dialogue housing summit. “There’s no point coming up with these grand schemes if they don’t end up delivering the housing we want out of it.”

Many governments, including NSW and Victoria, are offering incentives for developers to include affordable housing. Generally, the units are managed by a community housing provider and leased at about 20 per cent below the market rate for 15 years. But Jackson said these properties were fast becoming too expensive anyway.

“As market rent ticks up so significantly, we are seeing more and more dwellings that are captured and characterised as ‘affordable housing’ that for many, many people in the community are not affordable,” she said. “Is that the kind of system we want to wrap our arms around?”

Jackson said a clear and consistent definition of affordable housing was required, “particularly if we’re going to build government policies around the incentivisation of affordable housing and deliver planning benefits … that are contingent on the delivery of affordable housing”.

She told the summit – which included government, private developers and community housing operators – the government’s planning reforms were not designed to help them boost profits.

“We’re not trying to save money, we’re not trying to help anyone else make money. We’re trying to deliver more homes. And every reform we make to the planning system is going to be motivated by that framework.”

Jackson was hopeful neighbourhoods would accept extra height and density if it meant more social and affordable homes, but said building quality and amenity was essential. “I do not think they will cop that if we are delivering shitboxes.”

This week’s state budget contained $300 million for Landcom to build 4700 homes by 2039-40 and a $224 million “essential housing” package, but was criticised by advocates such as Shelter NSW and the Community Housing Industry Association for failing to make major investments in building public housing.

Jackson conceded there was “clearly more to do” to confront the housing crisis, and “we are trying to show we are interested in taking those first steps”.

She noted the state’s Land and Housing Corporation owned 50 per cent of the land in some suburbs in western Sydney, with large public housing estates. “It’s not just about talking, it’s about doing, it’s about us lifting on our land … Suffice to say, we know we need to do more.”

As part of its promise to increase housing density around Metro stations, the government this week removed the cap of 5000 homes at Hills Showground, drawing the ire of the local Hills Shire council.

Dialogue chairman Christopher Brown said the Hills Shire “like to think they’re westies when there’s a grant scheme, but the rest of the time consider themselves the lower north shore … If you want to be westies, you can share the burden. You’ve got the infrastructure.”

Scully said many mayors agreed with the government about the need for density and more vibrant communities, though some wanted to “do some political grandstanding for their own election” ahead of next year’s council polls.

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