Item 10.6 - Attachment 3

AHSEPP Review Council staff comments


Affordable Rental Housing SEPP Review – Issues and Responses






Understanding affordable rental housing and social housing


Suggested response 3.1:

Develop a communication program to raise public awareness of the nature of affordable rental housing encouraged by the AHSEPP and the groups of people it is likely to accommodate.


3(a) There needs to be a consistent definition of ‘affordable housing’ and the explanation needs to clearly distinguish the differences between ‘affordable housing’ and ‘housing affordability’. The definition should refer primarily to tenant income status and outline the criteria used to determine tenant eligibility. The definition should also refer to the role of community housing providers and Housing NSW.


(b) The definition of ‘affordable housing’ (once defined) should be embedded consistently across all legislation, Ministerial Directions and planning documents.


(c) There is serious concern that developers are not required to demonstrate the demand for affordable housing in areas they may be considering for affordable housing development. This concern is due to the potential for developers to take advantage of the AHSEPP for the purpose of financial reward, rather than a legitimate desire to contribute to increasing affordable housing stock in the short and longer terms. The result of this could be:


i. Increased density in areas with inadequate infrastructure to support  ‘vulnerable’ tenants;


ii. Inappropriate development in low density areas negatively impacting on the streetscape and predominant built form;


iii. New stock developed under the AHSEPP being rented at market rentals due to inadequate regulation of rental processes not administered by Community Housing Providers. This would result in stock built under the AHSEPP being inaccessible to the target group tenants it is intended to support;


iv. The possibility that developers advise Council that no community housing is needed in the area after the stock is built. This could lead to the need to sell or rent the stock to the private market.


Ensuring objective decision making


Suggested response 3.2:

a) Retain existing threshold of a CIV of more than $5 million for the determination of AHSEPP proposals by JRPPs and the threshold only apply to the “affordable rental” component, but provide clarification on how the CIV of the component is calculated; and/or


b) Give councils the ability to refer any affordable rental projects they consider appropriate to the JRPP; and


c) Provide guidance to councils on merit assessment of AHSEPP proposals taking into consideration local community issues, as well as affordable housing needs.


3(d) Retaining the existing threshold of a CIV of more than $5 million for the determination of AHSEPP proposals by JRPPs is relevant to Crown developments only.


(e) Applications submitted under the AHSEPP are difficult to refuse if the application complies with guidelines. There are limited controls specifically related to affordable housing. It is therefore recommended that developers justify the need for the development of affordable housing stock in the application process. A mechanism that provides easy access to relevant statistics will need to be developed to assist this criterion. Further criteria need to be established to ensure developments provide an appropriate built form to the location in which they are proposed.     


Should there be local variations to the Affordable Rental Housing SEPP?


Suggested response 3.3:

Examine the financial feasibility of additional incentive schemes to those offered by the AHSEPP and SEPP 70 to allow for different approaches in different areas to assist in the delivery of appropriate affordable rental housing.


Suggested response 3.4:

Examine opportunities to establish affordable rental housing benchmarks in major developments.


3(f) As an alternative supply mechanism for affordable housing, it is recommended that: 


i. SEPP70 could be applied across the state so that affordable housing contributions are collected in areas where affordable housing is needed; or


ii. A new levy (monetary contribution) could be created for affordable housing and administered by Housing NSW


iii. Tax incentives could be offered to encourage an increase in  affordable housing stock


General comment


(g) Applications for affordable housing developments currently tend to be in areas where land is less expensive to ensure developments are more affordable to build. However, the need for affordable housing is not always located in these areas. Further consideration needs to be given to determining where affordable housing should be located, and developments should be limited to the areas identified.






Density of low-rise infill development - floor space incentive


Suggested response 4.1:

a) The floorspace ratio for low rise infill development to change to 0.5:1 on 30 June 2011 as



b) Continue to monitor the effectiveness of this control in delivering new dwellings.


4(a) The 0.5:1 floorspace ratio is consistent with the draft Parramatta LEP for the R2 Low Density Residential zone.

Design of low rise infill development


Suggested response 4.2:

Finalise the low-rise housing guidelines at Appendix 3 with the inclusion of setback and private open space standards (see Table 2), taking into consideration issues raised in submissions.


4(b) Agree that guidelines should be finalised with the inclusion of setback and private open space standards, taking into consideration issues raised in submissions.

Proximity to transport criteria




Suggested response 4.3:

a) Examine the implications of extending the public transport services frequency requirements for sites to include the weekend and evenings to concentrate development closer to accessible locations and services; and


b) Allow variations in the distance from public transport criteria of up to 10% to be considered on their merits under SEPP No.1 - Development Standards.


4(c) The catchment eligibility criteria related to where developments can occur should be reduced to within 400 metres of a train station and bus exchange only.

Allow infill affordable housing in other zones


Suggested response 4.4:

Expand Division 1 of the AHSEPP to the B4 Mixed Use Zone and Special Purpose SP1

zones and their equivalents, making it clear that the assessment of proposals should take into account the provisions of relevant environmental planning instruments and policies which regulate the mix of residential and non-residential uses in the zone.

4(d) Division 1 should not be expanded into Special Purpose 1 zones as these zones are identified for specific purposes not appropriate for housing.

Community housing providers


Suggested response 4.5:

a) Examine the merits of different legal means of ensuring affordable rental housing is used for that purpose for the 10 year period required;


b) Issue guidance material to ensure that the role of community housing providers is clearly explained and that development applications are accompanied by an appropriate level of documentation regarding future management of the affordable dwellings; and


c) Examine alternatives for managing affordable housing in order to offer developers a choice of management arrangements.


4(e)  As there is currently no regulation of developers renting stock to legitimate affordable housing needs clients, it is recommended that


i.   a regulation is developed; or


ii.  developers must partner with a community housing provider to manage stock at the DA stage; or


iii. the stock developed under the AHSEPP could be managed solely by Housing NSW.


Budget studio accommodation


Suggested response 4.6:

Reduce the minimum floor area for a studio apartment developed as infill affordable rental housing from 35 square metres to 25 square metres.


4(f) The minimum floor area for a studio apartment developed as infill affordable rental housing should not be reduced as the amenity of both affordable housing residents and potential future buyers needs to be reasonable, and protected.

General comments


4(g) There is confusion around whether Council can levy S94A development contributions on infill development made under Division 1 of the AHSEPP. The concern is that S94A contributions are based on a fixed percentage of the cost of the development.  However a S94E Ministerial Direction (dated 10 November 2006) and Clause 25J of the Environmental Planning and Assessment Regulation state that:
 ..a levy under section 94A of the Act cannot be imposed on development:  for the sole purpose of affordable housing.

It is unclear whether this Direction (and the subsequent Clause 25J(l) of the EP&A Regulation) applies to ‘affordable housing’ developments sought pursuant to the AHSEPP.

It is noted that the AHSEPP commenced in September 2009, and is not likely to have been envisaged at the time the Direction was written in November 2006. Furthermore, it is considered that development sought pursuant to the AHSEPP is not for the ‘sole purpose of affordable housing’ as in most cases more than half of the housing is for general use/ sale and that the ‘affordable housing’ component is for a limited time period.

The Department of Planning has advised Council that S94A contributions should be levied on a pro-rata basis. Furthermore, if contributions are applied on a pro-rata basis it is unclear if Council can seek to collect development contributions for the 'affordable component' of the development at the expiry of the 10 year mandatory period when this housing would be sold to the private housing market.

It is recommended that

i.   Where developments are undertaken under Division 1 of the AHSEPP, S94A contributions should apply to the entire development

ii.  Ministerial Directions are amended to delete reference to excluding ‘affordable housing’ from attracting an S94A development contribution levy.






Secondary dwellings in rural and environmental zones


Suggested response 5.1:

Make secondary dwellings permissible in rural zones and environmental living zones where dwelling houses are permissible (Zones RU1, RU2, RU4, RU5, RU6 and E4 and their equivalents).


N/A PCC does not have rural zones or environmental living zones

Secondary dwellings in multi-unit developments


Suggested response 5.2:

a) Facilitate ‘dual key apartments’ in the form of secondary dwellings within residential flat buildings and multi-dwelling housing; and


b) A minimum dwelling size need not be specified for either of the individual dwellings making up the dual key apartment, providing that the whole dual key apartment meets the corresponding non-refusable minimum floor area specified in Division 1 for an affordable dwelling with that number of bedrooms (or the minimum area for a one bedroom dwelling in the case of a dual key apartment comprising two studio dwellings).


5(a) It is recommended that a review of the definition of ‘secondary dwellings’ is undertaken. A secondary dwelling cannot be built in multi unit housing or residential flat building – an extra unit, would simply be an extra dwelling in the development.


Minimum lot size and complying development


Suggested response 5.3:

a) Clarified that the AHSEPP does not prevent secondary dwelling being developed on

lots smaller than 450 square metres, in zones where the use is permitted.


b) Following the expansion of the complying development provisions applying to housing in the Exempt and Complying Code SEPP, the complying development provisions in clause 23 of the AHSEPP be expanded for secondary dwellings on any sized lots in residential or rural zones.


5(b) A minimum lot size or criterion should be provided to ensure development of a secondary dwelling is appropriate and does not negatively impact on the amenity of the primary dwelling, neighbouring residents, private open space, car parking, overshadowing etc.

Car parking


Suggested response 5.4:

Require replacement car parking in cases where the secondary dwelling displaces existing car parking that had been provided in accordance with a previous development consent.



Minimum floor area


Suggested response 5.5:

Do not prescribe a minimum floor area for secondary dwellings in the AHSEPP.


5(c) It is recommended that a minimum size is identified for resident amenity and the current maximum size is maintained to reduce the potential impacts of secondary dwellings on the built form or character of an area.

Section 94 development contributions and other charges

Suggested response 5.6:

(a) Provide councils the option of not charging section 94 contribution charges at all or establishing a standard contribution rate across the State based on the cost of works consistent with the current methodology applied under Section 94(A) as follows:

- $0 - $100,000 - no contribution;

- $100,000 - $200,000 - 0.5% contribution;

- over $200,000 - 1% contribution.


(b) Review the practices of councils in charging for new services under other legislation in relation to the scale of the secondary dwelling proposal.


5(d) As Parramatta Council has a section 94A Development Contribution, the criteria of 'Nil for $0-$100,000, 0.5% for >$100,000 to $200,000, and 1% for >$200,000' already applies to Parramatta Council.

5(e) Secondary dwellings have the ability to increase population density and consequently an increase in demand for services is possible.

It is recommended that

i. Councils are able to levy to cover this increased demand if they wish to.


General comments


5(f) In preparation of the new Local Environmental Plans in accordance with the Standard Instrument Template, the Department of Planning have advised Councils not to include in the land use table, any use that is otherwise permitted by a State Environmental Planning Policy (SEPP).

An example of this is that the term ‘secondary dwelling’ is not able to be listed as a permitted use within the R2 Low Density Residential Zone as it is otherwise permitted in that zone by the AHSEPP. This may be misleading or confusing to the general public who may only look to Council’s planning instrument for permissibility and may not be aware of overriding SEPPs.





The new generation boarding house concept


Suggested response 6.1:

That the Department works with the boarding house industry, NSW Housing, and other

stakeholders, on ways to improve the community’s perception of the new boarding house model encouraged by the AHSEPP.


6(a) Given the nature of boarding houses as predominantly short term or transitional accommodation, the appropriate management of a diverse range of clients may help to improve the community’s perception of this form of accommodation.


6(b) The location of the boarding house may determine the likely tenant, eg. boarding houses close to universities may house students


6(c) A communications plan that addresses the concerns of different audiences should be developed.


Building Code of Australia (BCA)


Suggested response 6.2:

Provide guidance on the BCA requirements for different types of boarding house accommodation.





Suggested response 6.3:

No action proposed under the EP&A Act.



Car parking standards


Suggested response 6.4:

No change to AHSEPP provisions proposed, subject to consideration of submissions on this issue.


6(d) It is recommended that increased parking spaces are provided in locations more than 400m from a train station or bus interchange

Complying development


Suggested response 6.5:

Develop new boarding houses or the extension and conversion of existing buildings to

boarding houses under complying development provisions paralleling those for group homes. The provisions could also be developed to provide for the alteration or addition to existing boarding houses.


6(e) It is recommended that


i.   Making boarding houses complying developments should not apply to low density residential areas as it could substantially increase the number of residents in a single property; or


ii.  Only class 1(b) boarding houses should be permitted in low density residential zones; and


iii. Criteria that protects amenity of future residents and neighbours need to be is established


A copy of Council’s draft Boarding House DCP controls can be referred to the Department of Planning.


Design guidelines


Suggested response 6.6:

Develop a Low Rise Affordable Rental Housing Design Guidelines based on the draft in Appendix 3 of this Paper which could also be applied to boarding houses.



Compliance issues


Suggested response 6.7:

Encourage councils to continue to monitor existing boarding houses in their area and to investigate potentially illegal boarding house developments.


6(f) Given the nature of boarding houses, the AHSEPP needs to provide guidelines for the appropriate management of boarding houses. A management plan should be submitted at development application stage to ensure amenity for future residents, and to ensure boarding houses integrate better with surrounding community.


(g) Parramatta Council’s DCP requires boarding housings to be registered with Council prior to the issue of an occupation certificate and annually thereafter. The DCP also requires boarding houses providing accommodation for 2 or more people with a disability must be registered in accordance with the Youth and Community Services Act 1973 and licensed by the NSW Department of Ageing, Disability and Home Care.


(h) A mechanism or register should be developed and administered by a regulatory body (eg Housing NSW) to ensure the management of boarding houses complies with guidelines. Guidelines should include regular, intermittent reports






8.1 Site compatibility considerations


Suggested response 8.1:

a) Develop guidance for Site Compatibility Certificate applications under the AHSEPP to deal with

the issue of competing need for jobs and affordable rental housing;

b) Apply the transport locational criteria applicable to infill housing development to Division 5;

c) Expand the land zoned B4 Mixed Use to all land zoned B4 across NSW.


8(a) It is recommended that site compatibility certificates should be applied to all developments where that use would not otherwise be in a permitted zone.






Consideration of stakeholder views in assessment


Suggested response 9.1:

Housing NSW projects be notified in accordance with the council’s notification requirements for comparable private sector developments, subject to Housing NSW paying to council the standard notification fee prescribed in the Regulation (currently $830). This could be achieved though a MOU with the LGSA or an amendment to the EP&A Regulation.









Expanding the self-assessment provisions


Suggested response 9.2:

Change the threshold for residential development that can be approved by Housing NSW from 20 units to 30 units while retaining the current 8.5 metres height limit.


9(a) This response would not be supported by Council

Car parking in affordable housing projects


Suggested response 9.3:

(a) No change in the AHSEPP standards of 1 car space per 5 dwellings for social housing is proposed

(b) The Department of Planning and Housing NSW will develop a parking standard guideline which sets out the parameters for determining parking standards for affordable housing taking into consideration bedroom numbers, site location and other factors. Submissions are invited to the development of the parking standards in social housing projects.


9(b) It is recommended that additional car parking is provided in affordable housing developments. However, this would need to be in the form of a basement.

Section 94 and social housing



Suggested response 9.4:

Housing NSW to pay contributions determined in accordance with the relevant council’s

Contributions Plan unless a Ministerial exemption is in force.

(c) As Council has a Section 94A Plan, the Ministerial Direction referred to in point 1 would restrict Council from seeking development contributions for affordable housing developments undertaken by Housing NSW or other social housing providers.

(d) As the future tenants of these providers are likely to have the greatest need/demand for services, Council should be able to collect S94A development contributions.

It is recommended that

i. The Ministerial Direction (and the section 25J (3)(l) of the Regulation) should therefore be amended to remove the exemption on affordable housing.


Demolition and minor works by Housing NSW

Suggested response 9.5:

Expand exempt development provisions for social housing demolition and minor works, subject to compliance with appropriate environmental standards.

No comment






Complying development provisions – number of buildings


Suggested response 10.1: Amend the complying development provisions to clarify that they

should permit the development of two or more buildings on a single lot of land as a group home.


10(a) It is recommended that complying development criteria should be dependent upon the zone. In low density zones only one building should be permitted.


Complying development provisions – conversion of existing buildings


Suggested response 10.2: Allow the conversion of existing dwelling houses to group homes as

exempt development when this does not involve any structural building works and as complying

development when structural building works are involved.


10(b) Exempt development does not require neighbour notification.


It is therefore recommended that


i.     When the change of use from a dwelling to a group home occurs, neighbours should be notified and given the opportunity to comment.

ii.    The change of use should require a DA.


Complying development provisions – minor amendments


Suggested response 10.3: Make minor amendments to the complying development provisions to

improve its clarity and effectiveness.


10(c) The suggested minor amendments to the complying development provisions to improve clarity and effectiveness have not been included in the review document. The nature of these amendments is therefore unknown.  






Interpretation of ‘low rental’


Suggested response 11.1:

Amend the AHSEPP to provide that this part of the AHSEPP does not apply to a building

constructed after 28 January 2000.


11(a) It could be argued that this provision needs to be applied to all low rental housing regardless of when it was built as the intention of the SEPP is to keep it available as rental stock.


Area of application



Suggested response 11.2:

Invite submissions on this matter, particularly from councils and other regional stakeholders in areas where Part 3 (which includes disincentives for disposing of boarding houses) currently does not apply.

11(b) Agree. As there are serious shortages of low rental accommodation in some localities, stakeholders should have the opportunity to submit comments.

Calculation of contributions


Suggested response 11.3:

Submissions are invited on aspects of Part 3 and Guidelines which may be considered to be unclear so that these may be addressed in a review of the Guidelines.


11(c) The assumptions used in the formula may need to be revised.


Application of contributions


Suggested response 11.4:

Submissions are invited from councils interested in using contributions in their local housing program so that options to ensure that funds are used most effectively can be considered

11(d) Use of Boarding House Financial Assistance Program is limited and may not capture all the affordable housing needs of a particular LGA. Contributions could be better spent on providing additional housing and this may be best managed by one authority than individual Councils.