The Minns Labor Government is taking another important step to address the NSW housing supply crisis it inherited by encouraging and incentivising the construction of additional homes, including more social housing.
Initial briefings to the new Government revealed it had been handed a projected housing construction shortfall of 134,000 dwellings over five years.
The Government also inherited a planning system in which development approval processing times had blown out from 69 days on average in July 2021 to 116 days in March 2023.
Residential house and unit rents have increased sharply over the past 12-months, signalling supply tightness.
The NSW Government will improve the planning system to incentivise residential housing developers that include at least 15 per cent affordable housng in their plans.
The NSW Government is today announcing:
• Housing developments with a capital investment value over $75 million, which allocate a minimum of 15 per cent of the total gross floor area to affordable housing, will gain access to the State Significant Development planning approval pathway
• These developments will also gain access to a 30 per cent floor space ratio boost, and a height bonus of 30 per cent above local environment plans.
Affordable housing is open to people on a wider range of incomes than social housing, is often managed by not-for-profits, and is often home to people whose income isn’t high enough to pay rent in the area where they live or work.
The plan will achieve more affordable housing, and more housing supply overall, with the changes set to come into force later this year.
Established by the former Coalition Government, the existing State Significant Development (SSD) pathway sees proposals assessed by the Department of Planning and Environment.
The SSD pathway often allows faster planning decisions, providing certainty sooner to investors and communities.
Applications made through the State Significant Development pathway must still meet rigorous checks and balances and the SSD process does not override local government decisions about where housing is permissable.
The National Housing Accord was announced by the Commonwealth Government in October 2022 as part of the Federal Budget. States and territories are to expedite zoning, planning and land release for social and affordable housing.
The NSW Government made a pre-election commitment to ensure that developments on surplus public land includes a minimum of 30 per cent affordable, social, and universal housing.
The Premier has already committed to a state-wide audit, identifying surplus public land which can be rezoned for housing and associated uses.
This pledge builds on that, incentivising an affordable housing component in private developments on private land.
The Government will also strengthen construction industry standards, introducing a new Building Commission and creating a modern Building Act.
This work will help buyers have confidence in the quality of their new homes, as part of the Government’s commitment to well-built, well-designed suburbs, led by the Building Commissioner David Chandler.
Further housing supply reforms are also on the horizon, with the NSW Government focused on driving more supply through collaboration with all levels of Government, communities, and the private sector.
Premier Chris Minns said:
“We are looking at ways we can help address the housing supply crisis, this is one of them.
“These reforms will provide more homes and more affordable housing in places where people want to live.”
“It is an important step, but we know our work to improve housing supply does not stop here.”
Minister for Planning and Public Spaces Paul Scully said:
“We have a shared responsibility to deal with the housing crisis facing this state.
“We’re facing a shortfall of more than 130,000 new homes over the five years to 2029.
“These changes provide incentives to build more affordable housing with the new pathway providing greater certainty and delivering the government more control of the decision-making process.
“This plan helps with housing affordability and with meeting our commitments under the National Housing Accord for new dwellings.”
Minister for Housing and Homelessness Rose Jackson said:
“Every day the housing crisis gets worse, our government is removing the red tape that slows down the process from getting people into homes.”
“We need more affordable housing and we’re not wasting any time in delivering solutions to building more homes for the people of NSW.”
“Granting State Significant Development status to developments that include affordable housing will allow faster decisions on these important projects.
“This commitment is in addition to our promise to deliver a minimum of 30 percent of social and affordable housing on surplus government land.”
“We know that there is more to be done and every opportunity we have to deliver more homes for the growing housing wait list – we will take it.”
Premier of New South Wales
Minister for Planning and Public Spaces
Minister for Housing
Minister for Homelessness