An inclusionary zoning target for affordable housing on rezoned land is another step closer following the release of the Greater Sydney Commission’s final region plan.

The plan envisages the development of three separate cities, and has been prepared alongside a new Future Transport 2056 strategy and Infrastructure NSW’s State Infrastructure Strategy, as well as district plans for five city areas.

“A Metropolis of Three Cities is a bold vision for three integrated and connected cities that will rebalance Greater Sydney – placing housing, jobs, infrastructure and services within easier reach of more residents, no matter where they live,” NSW premier Gladys Berejiklian said.

Key to the plan is a recommendation for affordable housing targets of 5-10 per cent “in defined precincts prior to rezoning” to capture some of the windfall gains, and directing it towards affordable rental housing for very low and low-income households.

The targets were welcomed by the NSW Federation of Housing Associations chief executive Wendy Hayhurst.

“The GSC has recognised the strain ordinary Sydney people are under as a direct result of the cost of housing in Sydney,” she said.

“Requiring well-designed affordable housing on rezoned land means the whole community shares with the landowner in the unexpected windfall created by a planning decision. It’s also a no brainer for government, reducing the amount it needs to raise from taxes to fund affordable housing.”

The parameters for affordable housing will be tailored to each nominated area, the plan states. However, previous criticism of the draft targets suggested having a range would see only the minimum met. City Futures Research Centre’s Professor Bill Randolph in his submission recommended the 5-10 per cent target be replaced with “10 per cent subject to viability”.

How the viability test works is also seen as key to the success of the target. In the UK, opaque viability tests have led to the attrition of affordable housing in many developments.

The GSC said an “independent assessment” of development feasibility would be undertaken, and “the assessment in collaboration with the Greater Sydney Commission will determine where exceptions may be granted”.

Ms Hayhurst said viability tests must be transparent to give the community confidence that the system is not being exploited. She also continued her call for the government to set targets for affordable housing for key workers on its own land.

“We would have liked to have seen targets extended to meet the needs of essential service workers on moderate income who as recent research has shown are being pushed to the outer edges of Sydney and beyond,” she said.

“The Federation will continue to argue for 30 per cent affordable housing targets on government owned land to help meet their need.”

Plan may struggle to find community support

Whether the overall plan will find community support is a separate issue, with one of the guiding inputs to the strategy – a population increase of 1.74 million requiring an addition 725,000 homes in the next 20 years – recently becoming a major debate, and the draft GSC plan seeing many submissions concerned about “unsustainable levels of population growth”.

This community dissatisfaction with current development was on the weekend backed up by a ReachTEL poll, commissioned by Fairfax, which found that about 60 per cent of people thought development was “damaging the identity” of suburbs, while only 17.5 per cent of people disagreed.

A large proportion of the GSC’s plan is devoted to improving the liveability, sustainability and resilience of the city, and it is likely that action on these strategies – such as having a diversity of housing typologies, increased tree canopy and low-carbon precincts – will be critical in gaining community support.

Urban Taskforce chief executive Chris Johnson said the GSC needed to become more of an advocate of higher density living.

“Our projections are that in 40 years time 50 per cent of homes in Sydney will be in apartments, which is a big increase on the current 30 per cent,” Mr Johnson said.

“But there is significant tension in the community about this change and we believe the plan should have shown more advocacy for the urban form of the city.”