Five more Sydney councils will be able to require affordable housing contributions from developers, following the NSW government’s expansion of a state planning policy.

The State Environmental Planning Policy 70 (SEPP 70) currently only applies to specific areas in the City of Sydney, and the City of Willoughby. Under the policy councils can require developers to provide a percentage of affordable housing units as part of a development on upzoned land, or a monetary contribution.

Now the policy is set to be extended to the Randwick, Inner West, Northern Beaches, Ryde and Canada Bay councils.

“Affordable rental housing underpins economic productivity and can support Sydney as a prosperous global city,” NSW planning minister Anthony Roberts said.

“The expansion of SEPP 70 to five more councils will boost the number of affordable rental homes for Sydneysiders.”

He said while many councils were using voluntary planing agreements as a way to get affordable housing, inclusion in SEPP 70 would “simplify the process for development… meaning there is a consistent approach to providing affordable rental homes”.

Mr Roberts also announced a Special Infrastructure Contribution would be levied on developers to cover costs associated with providing essential infrastructure.

“With our population growing, more homes need to be built,” he said. “By pooling the funds from a number of developments we can deliver the necessary infrastructure that is needed for each of these areas sooner.”

NSW Federation of Housing Associations chief executive Wendy Hayhurst said the announcement was a positive sign for the community housing sector.

“We would certainly be happy about that,” she told Fairfax.

Developer lobby group Urban Taskforce, meanwhile, said more information on the scheme was required.

“The Minister for Planning & Housing seems to have opened the gate to five Sydney council’s to levy whatever they like on new housing developments for affordable housing,” chief executive Chris Johnson said.

“If excessive levies by well-meaning councils are applied to new housing development across Sydney it will have the effect of slowing housing supply down dramatically.”

The new SEPP 70 policy is on exhibition until 31 January 2018.

City of Sydney subsidises land sale

The City of Sydney has been lobbying the government to extend the scheme across its entire LGA, rather than just particular areas at Ultimo/Pyrmont, Green Square and the Southern Employment Lands.

Meanwhile, it has taken matters into its own hands, selling surplus land in Redfern to community housing provider SGCH at a discount of between $11.25 million and $13.15 million so it can build more social and affordable housing units.

Sydney lord mayor Clover Moore said the housing crisis meant the council was using every avenue to get more subsidised housing.

“With rising rental costs and slow wage growth, there are greater numbers of people at risk of becoming homeless,” Ms Moore said.

“We are using every mechanism available to us to provide more social and affordable housing in the inner city and over the past year we have enabled hundreds of new social and affordable housing places.”

The land is expected to have 130-150 social and affordable housing units built on it, with about 40-60 units set aside as social housing for people at risk of homelessness.

“We could do so much more if the NSW government would respond to our proposal and allow us to extend our affordable housing levies citywide,” Ms Moore said.

“Levies are an effective and financially feasible way of ensuring new developments contribute to affordable rental housing supply and have been proven to work in Ultimo/Pyrmont, Green Square and the Southern Employment Lands.”

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  1. Affordable housing inclusion provides a conduit for overbuilding as developers increase substantially the size of the development by extended height limits, resulting in more housing units than would have been possible before. A bit like build 2 more than before, one for affordable housing, and one more for the developer. Meanwhile the infrastructure grinds to a halt, while councils procrastinate on spending the infrastructure slush fund.