Posted on August 28, 2023 by Megan Hawley and Lindsay Taylor

NSW Housing and Productivity Contributions Implementation

On 25 August 2023, the NSW Department of Planning and Environment released the draft Environmental Planning and Assessment (Housing and Productivity Contribution) Order 2023 (Ministerial order) to give effect to the introduction of the Housing and Productivity Contribution (HPC). The draft Ministerial Order is available for comment until 8 September 2023. The HPC Implementation Guideline has also been published.

See our earlier blogs here and here regarding the amendments to the Environmental Planning & Assessment Act 1979  (EPA Act) to introduce the HPC.

The HPC will apply from 1 October 2023 in the Greater Sydney, Illawarra-Shoalhaven, Lower Hunter, and Central Coast regions. There are discounted rates proposed for the initial period to June 2024 and from July 2024-June 2025.

As required by the proposed amendments to the EPA Act, the draft Ministerial Order also covers:

  • the contribution rates for the HPC and the way in which the HPC must be determined,
  • the classes of development to which the HPC will apply (being residential, commercial and industrial development);
  • the time at which the HPCs are required to be made and the nature of the contribution,
  • when the HPC includes a transport project component,
  • when the HPC includes a strategic biodiversity component, and
  • that the HPC is required when a complying development certificate is issued for development which is of a class which attracts HPCs.

There are also provisions regarding the terms of conditions of consent which will require HPCs and special provisions regarding concept development applications.

The draft Ministerial order provides that contributions are to be monetary contributions, but by agreement of the Minister can be made by the dedication of land or the carrying out of works. However,  the transport project component cannot be met through land or works, and if the HPC is required by a complying development certificate the contribution must be a monetary contribution.

The Guideline provides some background and detail regarding HPCs and the draft Ministerial order, and discusses a number of additional matters including:

  • the transition to HPCs by 1 July 2026 for the Western Sydney Growth Areas Special Contributions Area and Western Sydney Aerotropolis Special Contributions Area;
  • works in kind agreements and planning agreements;
  • amendments to the NSW Planning Portal to streamline provision of HPCs; and
  • details of the priorities for funding, the Housing Productivity Fund and a proposed Infrastructure Opportunities Plan as well as a proposed governance framework.

The Guideline states that where a planning agreement excludes the special infrastructure contribution (SIC) from applying to  development, it will have the effect of also excluding the HPC. It also states that with the introduction of the HPC, approximately 50 satisfactory arrangements clauses or concurrence requirements in respect of State infrastructure will be removed from local environmental plans in the areas where the HPC will apply.

Of significance to councils, the Guideline states that the NSW Government has committed up to $1 billion over 10 years from HPCs to be made available to councils to support funding of infrastructure aligned with the purposes of the HPC. The allocation of that funding will be operated similarly to a grants program.

The draft Ministerial Order can be found here.

The Guideline can be found here.

Please do not hesitate to contact Dr Lindsay Taylor or Megan Hawley if you have any questions.