The NSW Government has released the draft proposed amendments to the State Environmental Planning Policy Amendment (Housing) 2023 (Housing SEPP), along with proposed amendments to the Environmental Planning and Assessment Amendment (Housing) Regulation 2023 and a draft In-fill Affordable Housing Practice Note.

The draft Housing SEPP and Practice Note were on exhibition for a period of three weeks, ending Tuesday 17 October 2023. We understand the changes were proposed to commence on 1 November but so far that has not occurred.

Subject to a savings and transitional provision to be incorporated into Schedule 7A of the Housing SEPP, the details of which have not been released in the draft document, the following key proposed amendments to the Housing SEPP are:

• An increase in the floor space ratio (FSR) bonus to 30% for in-fill affordable housing development, where a minimum of 15% of gross floor area is allocated to affordable housing. The Practice Note clarifies that the maximum permissible FSR for in-fill affordable housing will be 130% of the maximum permitted FSR for the residential accommodation on a site and the bonus FSR does not apply to any non-residential floor space;
• The introduction of a new building height bonus of 30% for in-fill affordable housing development, also in circumstances where a minimum of 15% of gross floor area is allocated to affordable housing. The Practice Note further clarifies that the FSR bonus above can be applied separately or together with the available building height bonus;
• The 15% of gross floor area allocated to affordable housing under the Housing SEPP is clarified as not including any other affordable housing required by to be provided in the building under another Environmental Planning Instruments (EPIs);
• A building height bonus to apply to residential flat buildings and shop top housing developments that contain the required affordable housing allocations, permitting a maximum building height of 130% of the maximum permissible height set out in the applicable Local Environmental Plan (LEP);
• Create a new State Significant Development (SSD) pathway for in-fill affordable housing developments with a Capital Investment Value (CIV) greater than AU$75 million and with an allocation of at least 15% of the residential component of the development as affordable housing;
• New design principles for seniors housing and residential apartment development will be introduced; and
• An increase in the requirement for allocations of affordable housing to be used as such for a minimum period of 15 years, instead of 10 years, unless the development is on land owned by the Aboriginal Housing Office or the Land and Housing Corporation.

Key takeaways

To encourage development of in-fill affordable housing in NSW, the NSW Government will amend the Housing SEPP to permit increases in FSR and height standards for such development in circumstances where new allocation criteria is satisfied.

In an effort to streamline and expedite approval processes, the NSW Government will also introduce a new SSD pathway for in-fill affordable housing developments with a CIV greater than AU$75 million and with an allocation of at least 15% affordable housing.