Affordable Housing Changes Stack Up for Sydney Developers

Infill affordable housing provisions have been taken up with gusto by New South Wales developers. Applying to residential and shoptop developments, it allows a floor space ratio (FSR) bonus of 20 to 30 per cent and a height bonus of 20 to 30 per cent for projects that include at least 10 to 15 per cent of gross floor area (GFA) as affordable housing. Deicorp’s most recent approval, allowing the prolific Sydney developer to add 48 affordable apartments and 10 storeys into its $463-million, 42-storey Rhodes project ( pictured top ) is among the latest in a growing number of projects taking advantage of the infill affordable allowances. One of a host of amendments to the Housing State Environmental Planning Policy (SEPP) announced in December of 2023, the policy, alongside the Transport-Oriented Development (TOD) precincts , have been one of the most visible and arguably most utilised by developers. Popularity on rise While council data for smaller projects has not yet been collected, the NSW Department of Planning, Housing and Infrastructure provided The Urban Developer with data on State Significant Developments (SSD) that have utilised the infill affordable changes. The City of Canada Bay came in at No.1 with four major applications for projects that included an affordable housing provision, followed by North Sydney with three applications, and Blacktown, Canterbury-Bankstown and Sutherland local government authorities with two apiece. Port Macquarie and Wollongong were the only local government authority areas outside Greater Sydney to record SSDs with infill affordable. Urbis associate director Sophy Purton says they have experienced a considerable and positive uptake of the amendment. ▲ Urbis associate director Sophy Purton. “It’s one of the policies that has had the most impact,” she says. “We’ve had so much appetite across the board. With the cost of construction going up and developers struggling to make sites stack up, this has helped in making sites more feasible ... and encouraging developers to get those developments across the line.” As of January 19, the department had issued Secretary’s Environmental Assessment Requirements (SEARs) for more than 80 projects with infill affordable provisions. “This is a really strong indicator that the industry is taking advantage and a positive way to deliver immediate affordable housing,” Purton says. “A lot of mid-tier private developers are taking advantage of it, and a lot of clients with existing approvals on the site ... are amending those approvals to take advantage of the controls,” she says. “We have seen a lot of them come through more immediately, whereas you need to get sites together to take advantage of it for a new development.” Affordable on the up Deicorp was an early beneficiary of the amendments, securing approvals for a 22-storey tower at Crows Nest this year after amending its approved plans in February of last year, just two months after the changes were introduced. Deicorp executive manager Rob Furolo says the developer has been working with community housing providers such as Bridge Housing to increase the supply of affordable housing in its projects for several years. “[But] the introduction of the Infill Affordable Housing provisions encouraged us to expand the number of projects to include more affordable residential dwellings,” Furolo says. ▲ A rendering of Deicorp’s Marquet &amp; Mary tower at Rhodes, approved last month. Of the 25 submitted SSD applications, nine sought to amend, modify or surrender existing development consents approved before the infill affordable housing scheme was established in December of 2023, according to the NSW Government. Deicorp currently has three projects in the planning system that will deliver a combined 292 affordable homes, as well as a tower at its Rhodes project that will deliver 48 affordable homes. “We quickly recognised that the Government’s new policy would be a strong incentive to deliver new affordable housing in areas where we were already planning to add housing,” Furolo says. “While the incentives don’t make an unviable project viable, they make the provision of affordable housing worthwhile where it otherwise wouldn’t have been.” Purton says that’s not to say it’s been an all-rounder, and smaller projects are inevitably at a disadvantage “It ’ s harder on small-scale sites,” she says. “You do need to deliver 20 per cent uplift to be within the controls and you need to deliver 10 per cent affordable housing. “So at minimum you need height of 21m to get the two additional floors, which makes it tricky on smaller sites that are developed.” ▲ Deicorp executive manager Rob Furolo. But that’s not to say smaller and existing developments are cut out of the amendments. “It’s a great opportunity to retrofit and get that additional height without having to demolish and construct the whole site,” Purton says. “We might see some of those [filed with] councils for those older style apartments.” Future of infill affordable Thanks to the NSW Government’s multi-pronged attack to meet the housing targets, the future is looking brighter in the state. “Now with the TOD SEPP controls in place, and those sites identified, and the announcement of the Housing Delivery Authority, we will start to see a fresh wave of sites in the next 12 to 18 months that take advantage of baseline controls and apply infill housing,” Purton says. “The State Government seems to be doing everything it can to ensure we meet targets, but we’ve seen so much reform at such a rapid pace, everyone is just trying to keep up with all the policy changes. “The recent low to midrise changes don’t really allow for full potential of sites, but we are moving in the right direction and if we were moving that dial up, we’re moving forward. ▲ Deicorp’s Rhodes project added 48 affordable apartments and another 10 storeys as a result of the SEPP amendments. Furolo says that it’s not just Deicorp that is aware of the potential for the growth of affordable. “Under the planning guidelines for our projects, we are required to consult extensively with the local community,” Furolo says. “What has been pleasing is that the majority of people we have consulted with in numerous communities support the provision of more affordable housing. “It’s unlikely that the support our projects have received would have been as strong without the inclusion of affordable housing.” But of course there is more that can be done, he says. “Rapid assessment of projects that include at least 5 per cent affordable housing would be a start. “Removing land tax, council rates and the GST on apartments that are to be managed as affordable housing by a community housing provider would also make them more attractive,” he says.

Affordable Housing Changes Stack Up for Sydney Developers

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