Posted on December 15, 2023 by Megan Hawley and Thuy Pham

Alert: In-Fill Affordable Housing and Amendment of the Housing SEPP

Amendments to the State Environmental Planning Policy (Housing) 2021 (Housing SEPP) which were announced by the NSW Government in June 2023, came into effect yesterday, 14 December 2023 with the making of the State Environmental Planning Policy Amendment (Housing) 2023 (Housing Amendment SEPP).

The amendments are intended to facilitate the provision of affordable housing.

The amendments introduce a new bonus floor space ratio and height of up to 30% for residential development projects that include at least 15% of the gross floor area (GFA) as affordable housing. However, in response to submissions on the proposed amendments, there is now the ability to reduce the amount of affordable housing to 10% of the GFA if the full 30% bonus FSR and height cannot be achieved.

Amendments have also been made by the Housing Amendment SEPP to the State Environmental Planning Policy (Planning Systems) 2021, to make some infill housing developments State significant development (SSD). The previously announced trigger of a $75 million capital investment value (CIV) for in fill housing developments to be treated as SSD has been retained for projects in the Eastern Harbour City, Central River City, Western Parkland City or Central Coast City in the Six Cities Region, but the trigger has been reduced to a CIV of $30 million for projects elsewhere.

Certain housing developments carried out by Land and Housing Corporation (LAHC), Landcom and the Aboriginal Housing Office (AHO) will be SSD if they have a CIV of $30 million regardless of their location.

The Housing SEPP also now gives Landcom, in addition to LAHC and AHO, the ability to carry out some housing projects without development consent.

The Housing Amendment SEPP also repeals State Environmental Planning Policy No 65—Design Quality of Residential Apartment Development and incorporates provisions regarding the design of residential development, and application of the Apartment Design Guide into the Housing SEPP.

The Housing Amendment SEPP can be found here.

The Environmental Planning and Assessment Amendment (Housing) Regulation 2023 was also made to make amendments to the Environmental Planning & Assessment Regulation 2021 (EPA Reg) as a consequence of the amendment of the Housing SEPP and to included new provisions in the EPA Reg regarding design review panels.

In late May 2023, the NSW Productivity Commission released a report addressing the issue of a lack of affordable housing in NSW and a lack of supply in rental markets. We discussed that report, and the foreshadowed amendments to the Housing SEPP in this article.

The Department of Planning and Environment has also prepared a Practice Note and Planning Circular PS 23-003 to guide consent authorities and applicants on the application of the in-fill affordable housing FSR and height bonuses.

If you have any questions in relation to this article, please leave a comment below or contact Megan Hawley on 02 8235 9703.