| Ordinary Meeting of Council – 17 December 2024 | GB.10 / 1 |
Affordable Housing Options Paper and Draft Affordable Housing Policy
EXECUTIVE SUMMARY
| purpose of report: | For Council to consider the Affordable Housing Options Paper and Draft Ku-ring-gai Affordable Housing Policy for public exhibition. |
| background: | Local Councils play an important role in planning for the needs of their community, including an appropriate supply and mix of housing to meet the community’s diverse and changing needs. Affordable housing helps ensure that communities remain diverse, allowing people from various income levels and backgrounds to maintain long-standing connections to the area, to live near their social networks, neighbourhood connections and jobs. It also supports the local economy by helping local businesses and essential services attract and keep employees by enabling them to live closer to their place of employment.Ku-ring-gai does not currently have an Affordable Housing Policy. At the OMC of April 2024 Council resolved to develop an Affordable Housing Policy. |
| comments: | Consultants HillPDA were commissioned to:· undertake an assessment of the options that Council could consider for the delivery of affordable housing within Ku-ring-gai; and· prepare a draft Affordable Housing Policy for Ku-ring-gai. |
| recommendation:(Refer to the full Recommendation at the end of this report) | That Council endorse the Draft Ku-ring-gai Affordable Housing Policy for public exhibition.The Affordable Housing Options Paper and Education Brochure will be made available as supporting documents to the exhibition. |
Purpose of Report
For Council to consider the Affordable Housing Options Paper and Draft Ku-ring-gai Affordable Housing Policy for public exhibition.
Background
At the OMC 16 April 2024 Council considered a Notice of Motion and resolved:
A. Council undertake a Housing Affordability Study to investigate the options for policies and enabling mechanisms to ensure the delivery and management of affordable housing in Ku-ring-gai. The study should include the following matters:
i. An Affordable Housing Needs Analysis to determine the nature and extent of housing affordability issues in Ku-ring-gai.
ii. A review of current and upcoming affordable housing policy settings being pursued by the Federal and State Governments.
iii. An analysis of options for the relevant models for delivery of affordable housing provision in the local council context, including case studies of other local councils.
iv. Recommendations to set out the steps and processes that Council needs to undertake to implement an Affordable Housing Strategy and Contributions Scheme.
v. A Draft Affordable Housing Policy to be prepared based on recommendations from Options Paper.
B. Council recognises the need to have an Affordable Housing Policy in place to support emerging State Government policy obligations and allocate $150K budget to undertake this work.
What is Affordable Housing?
Affordable housing refers to a specific housing product. The Environmental Planning and Assessment Act 1979 defines affordable housing as “housing that is targeted at households on very low, low or moderate incomes (from 0% – 120% of Greater Sydney’s median household income)”. It is rental housing that is subsidised and offered below market rents. The rent is charged at no more than 30% of the household income. This allows households to meet other basic living costs such as food, clothing, transport, medical care and education.
Who lives in affordable housing?
Based on the 2021 Census, affordable housing is for households earning up to $2,492 per week.
Examples of the households who may benefit from affordable housing:
· Young adults who want to live near where they grew up;
· people who are recently separated who can no longer afford market rent; and
· key workers (like aged care, nursing, childcare, health and welfare support, emergency services, transport, cleaners and hospitality workers) who need to live near their jobs.
71.6% of key workers currently working in Ku-ring-gai live outside of the local government area. Long commutes impact quality of life and leads to high turnover.
Housing stress
Housing stress is when someone has to sacrifice essentials (such as food, transport, medical, education) to pay for housing.
In 2021, 8,354 households were renting within Ku-ring-gai (either public, privately or otherwise). 23% of renters (1,923 households) in Ku-ring-gai are in housing stress.
Having regard for the current eligible rental households in housing stress, Ku-ring-gai would require approximately 2,000 affordable housing dwellings to meet this need. It should be noted that this figure is only based on those households currently living within Ku-ring-gai and does not take into consideration the high percentage of key workers working in Ku-ring-gai (such as aged care, nursing, childcare, hospitality, etc) that currently live outside of the local government area.
Comments
Ku-ring-gai’s Current Approach to Affordable Housing
Ku-ring-gai’s current approach to affordable housing is ad hoc. Council does not currently have any affordable housing policy or formal position on the provision of affordable housing within Ku-ring-gai. The current options for delivery of affordable housing are:
· Development Application utilising the affordable housing bonus provisions under the Housing SEPP 2021; or
· at the Planning Proposal stage negotiated as part of a Planning Agreement
All existing affordable housing dwellings that have been delivered in Ku-ring-gai have been done so utilising the former Affordable Housing SEPP provisions (now SEPP Housing 2021) which provided incentives (such as bonus floor space) to encourage developers to deliver affordable housing. All the affordable housing dwellings delivered under the former Affordable Housing SEPP provisions (now SEPP Housing 2021) are time limited, with the dwellings only being required to be used for the purpose of affordable housing for a period of 10-15 years. After this period they switch to market housing and cease to be made available as affordable housing. A few of the earliest dwellings delivered in this way have already time-expired after ten years. This affordable housing stock is not owned by Council.
| Ku-ring-gai Affordable Housing Since 2013 | |||
| Approved | Delivered | Expired | |
| Affordable Housing Units | 72 | 37 | 3 |
| Boarding Houses | 90 rooms | 29 rooms | N//A |
| Total | 162 | 66 | 3 |
When planning agreements including offers of affordable housing are negotiated at the planning proposal stage, this is a complex, unpredictable and labour intensive process as there is no clear articulation of the community and council’s expectations or any clear principles or guidelines. This can lead to inconsistency and potential probity issues. It also means that affordable housing is not priced into the land acquisition, which limits the amount of affordable housing that be delivered through uplift.
Recent changes to State Environmental Planning Policy (Housing) 2021 relating to Affordable Housing have impelled the consideration of Affordable Housing within Ku-ring-gai, these include:
· Affordable Housing Reforms (December 2023) which encourage private developers to boost affordable housing and deliver more housing. The reforms included a floor space ratio bonus of 20-30% and height bonus of 20-30% for projects that include at least 10-15% affordable housing for a minimum of 15 years. The height bonus only applies to residential flat buildings and shop-top housing. It is found in Chapter 2 Part 2 Division 1 In-fill affordable housing.
· Chapter 5 Transport Oriented Development (April 2024) by the State Government requires 2% affordable housing contribution for developments with a gross floor area of at least 2000sqm, located in the Part 2 station precincts. This includes Roseville, Lindfield, Killara and Gordon in Ku-ring-gai. This is an in-kind contribution and required to be managed by a community housing provider in perpetuity.
Any future Council led rezoning or increases in housing densities present an opportunity to capture the provision of affordable housing to the benefit of the broader Ku-ring-gai community.
Additionally, there are a number of private planning proposals for sites within Ku-ring-gai in the pipeline which will result in the delivery of either physical affordable housing dwellings, or potential monetary contributions.
Council needs to be proactive in determining its strategy for the delivery and management of affordable housing. Many Councils in the Sydney region already have affordable housing strategies and policies in place to proactively deliver affordable housing, such as Willoughby, Waverly, Northern Beaches and City of Sydney.
Affordable Housing Options Paper
Council engaged consultants HillPDA to prepare an Affordable Housing Options Paper (Attachment A1) to provide Council with an assessment of options that Council could consider for affordable housing.
HillPDA undertook an assessment of 43 different strategies and options that other local councils are undertaking to support affordable housing across greater Sydney and the broad categories the options fall under are:
· Delivery of affordable housing;
· levying the private market;
· supply and diversity incentives;
· actions – a supportive delivery framework; and
· advocacy and raising awareness.
Some of the options are not appropriate for Ku-ring-gai at this time, as they require funding which is likely to only be unlocked by an Affordable Housing Contribution Scheme or Policy over the longer term, as it takes time for contributions, both as in-kind dedications and as monetary contributions, to support a sustainable delivery programme. However, this is something that Ku-ring-gai could work towards.
The options paper presents four options that are considered to be possible options for Ku-ring-gai:
· Option 1: Implement an Affordable Housing Policy;
· Option 2: Implement an Affordable Housing Contribution Scheme;
· Option 3: Maintain the current approach; and
· Option 4: ‘Exit’ Affordable Housing to the market and community housing providers.
HillPDA have recommended that Council does not maintain its current approach to affordable housing (Option 3). This leads to ad hoc and inconsistent negotiations and decision making and gives rise to potential probity issues. Option 4 is also no longer realistic because of the ongoing activities in affordable housing space that directly impact Ku-ring-gai.
Instead HillPDA recommends that council pursues Option 1 to implement an Affordable Housing Policy and Option 2 to Implement an Affordable Housing Contributions Scheme.
An Affordable Housing Policy and Affordable Housing Contribution Scheme demonstrates Council’s commitment to affordable housing, and also ensures that it has the necessary frameworks in place to manage the delivery of affordable housing for the community in a structured, transparent and effective manner.
Draft Affordable Housing Policy
HillPDA have prepared a Draft Affordable Housing Policy for Ku-ring-gai (Attachment A2). The Draft Policy has been prepared having input from Council staff and Councillors.
The purpose of the Policy is to articulate:
· Council’s objectives for affordable housing within Ku-ring-gai;
· outline the mechanisms for delivering affordable housing;
· Council’s requirements for affordable housing; and
· how Council will manage affordable housing it owns.
The diagram below sets out an overview of the key aspects included within the Draft Affordable Housing Policy.
Key components of the Draft Affordable Housing Policy are:
Affordable Housing Target
The Draft Policy proposes a 10% Affordable Housing Target. This means that Council will seek 10% of housing in developments as a result of rezoning arising from a private planning proposal to be Affordable Housing.
Any affordable housing provided through a bonus scheme (i.e. such as the Height and FSR bonuses under the Housing SEPP) must be in addition to this 10%.
Mechanisms Council will use
The Draft Policy identified two (x2) mechanisms that Council will use to support the delivery of affordable housing:
· Affordable Housing Contribution Scheme: prepared by Council and incorporated as part of the LEP. It allows Council to place conditions on development which require contributions for affordable housing (in addition to any development contributions required under s7.11 and s7.12 of the EP&A Act 1979). An Affordable Housing Contribution Scheme would be developed alongside any strategic rezoning of areas within Ku-ring-gai. This means that the contribution is tied to where uplift of land value is created. The contribution rate (%) is informed by viability testing consistent with the NSW Government’s Guideline for Developing Affordable Housing Contribution Scheme (2019).
· Proponent Led Planning Proposals: Council will seek a 10% affordable housing contribution either through a clause in the LEP that specifies 10% of the floorspace is to be used for affordable housing or through a voluntary planning agreement. This is in addition to local infrastructure contributions. The proponent will be required to undertake feasibility testing.
Contributions
The Draft Policy outlines that Council will receive both:
· In-kind contributions – where a proponent dedicates land or dwellings to Council for the use of affordable housing. These must remain affordable housing in perpetuity.
· Monetary contributions – where a proponent provides the monetary equivalent of dedicated dwellings. The funds can be used to acquire land for affordable housing, fund partnerships with Community Housing Providers or acquire dwellings for the use of affordable housing.
The Draft Policy notes a preference for Council to receive in-kind contributions (the dedication of dwellings) at this time as monetary contributions cannot be levied until an Affordable Housing Contributions Scheme is in place. In-kind dedication ensures that affordable housing is made available to the community faster, as it will take time to accumulate the pool of monetary contributions to be able to fund the acquisition of land or dwellings under an Affordable Housing Contributions Scheme.
Partnership with Community Housing Provider
The Draft Policy outlines that the day-to-day management of affordable housing will be managed externally to Council. Council will engage a registered Community Housing Provider (CHP) to lease and manage on Council’s behalf. This avoids the need for Council to select tenants, directly manage tenancies or get involved in disputes.
Who will live in there
The Draft Policy outlines that priority target groups for Council owned affordable housing will be:
· Key workers working in Ku-ring-gai;
· Ku-ring-gai residents in housing stress;
· women older than 65; and
· those with a close connection to Ku-ring-gai, including long term residents and people with a social or economic association with the local government area.
integrated planning and reporting
Theme 1: Community, People and Culture
| Community Strategic Plan Long Term Objective | Delivery ProgramTerm Achievement | Operational PlanTask |
| C2.1 Housing choice and adaptability support the needs of a changing population | C2.1.1 Council’s planning approach to the provision of housing across Ku-ring-gai is responsive and addresses the supply, choice and affordability needs of the community and changing population | C2.1.1.2 Prepare Housing Affordability Policy and Strategy consistent with the Local Strategic Planning Statement (LSPS). |
Governance Matters
The State Environmental Planning Policy (Housing) 2021, (Housing SEPP) defines households eligible for affordable housing in the following ways under Section 13(1)(a)(i):
· Very low income household – a household with a gross income lower than 50 per cent of the median household income for Greater Sydney or the Rest of NSW;
· Low income household – a household with a gross income between 50 per cent and 80 per cent of the median household income for Greater Sydney or the Rest of NSW; and
· Moderate income household – a household with a gross income between 80 per cent and 120 per cent of the median household income for Greater Sydney or the Rest of NSW.
Additionally, as laid out in Section 13(1)(a)(ii) of the Environmental Planning & Assessment Act 1979, for households to be in affordable housing, they should not spend more than 30% of the gross household income on rent.
Risk Management
Council does not have a formal position on Affordable Housing. Currently Council has an ad hoc approach to affordable housing through Planning Agreements and other negotiated outcomes at the planning proposal stage. This creates uncertainty for developers, the community and Council. Without clear expectations or consistent guidelines, the process for negotiating affordable housing contributions is complex and may lead to probity issues due to inconsistent and inequitable outcomes.
Financial Considerations
At OMC 16 April 2024 Council resolved to allocate an $150K budget to undertake the work on an Options Paper and Affordable Housing Policy.
By setting an affordable housing target of 10% for rezoning arising from a private planning proposal this ensures that proponents price-in the contribution expectation into any feasibility for development.
Social Considerations
Affordable housing will help ensure that Ku-ring-gai’s community remains diverse, allowing people from various income levels and backgrounds to live near their jobs, social networks and neighbourhood connections.
Affordable housing supports the local economy by assisting local businesses and essential services to attract and retain employees. By enabling employees to live closer to their place of employment, affordable housing would help to retain Ku-ring-gai’s vital workers, strengthen the local economy and reduce the risk of labour shortages in essential industries. In the case of care workers, such as aged care workers and childcare workers, high staff turnover directly impacts the quality and continuity of care.
Environmental Considerations
There are no direct environmental considerations arising from the preparation and exhibition of an Affordable Housing Policy.
Community Consultation
It is recommended that the Draft Affordable Housing Policy be placed on public exhibition in 2025 for a period of 28 days.
HillPDA have prepared a short education brochure (Attachment A3) that gives an overview of what is affordable housing, who lives in it, and what it looks like.
The Affordable Housing Options Paper and Education Brochure will be made available as a supporting study to the exhibition of the Draft Affordable Housing Policy.
Internal Consultation
As part of the preparation of the Affordable Housing Options Paper and Draft Affordable Housing Policy, HillPDA facilitated a workshop with Council staff from across the organisation – Urban Planning, Property, Development and Regulation, Community, Finance, and Operations.
Two (x2) Councillor briefings were held throughout the project, on 25 July 2024 and 7 November 2024. At the Councillor briefing on 7 November, Councillors were given the opportunity to provide feedback on the content of the Draft Affordable Housing Policy.
Further internal consultation with relevant Council departments, such as Community and Finance, will be undertaken during the exhibition of the Draft Policy.
Summary
Ku-ring-gai’s current approach to affordable housing is ad hoc. Council does not currently have any affordable housing policy or formal position on the provision of affordable housing within Ku-ring-gai. At OMC April 2024 Council resolved to develop and Affordable Housing Policy.
Consultants HillPDA were commissioned to:
· Undertake an assessment of the options that Council could consider for the delivery of affordable housing within Ku-ring-gai; and
· prepare a draft Affordable Housing Policy for Ku-ring-gai.
HillPDA undertook an assessment of 43 different strategies and options other local councils are undertaking to support affordable housing across greater Sydney. HillPDA have recommended that Council pursues Option 1 to implement an Affordable Housing Policy and Option 2 to Implement an Affordable Housing Contributions Scheme.
HillPDA have prepared a Draft Affordable Housing Policy for Ku-ring-gai (Attachment A2). The Draft Policy proposes:
· A 10% Affordable Housing Target. This means that Council will seek 10% of housing in developments as a result of rezoning arising from a private planning proposal;
· an Affordable Housing Contribution Scheme (AHCS) that would be developed alongside any strategic rezoning of areas within Ku-ring-gai by council. This would require more detailed feasibility testing and must be linked to an LEP;
· that Council will receive both in-kind contributions(proponent dedicates land or dwellings to Council for the use of affordable housing in perpetuity), and monetary contributions under a future AHCS (proponent provides the monetary equivalent of dedicated dwellings) with the funds used to acquire land for affordable housing, fund partnerships with Community Housing Providers (CHPs) or directly acquire dwellings for the use of affordable housing;
· Council will engage a registered Community Housing Provider (CHP) to lease and manage affordable housing on Council’s behalf; and
· priority target groups for Council owned affordable housing will be key workers working in Ku-ring-gai, Ku-ring-gai residents in housing stress, women older than 65 and those with a close connection to Ku-ring-gai, including long term residents and people with a social or economic association with the local government area.
A. To advance Ku-ring-gai’s affordable housing objectives Council pursue the implementation of:
1. An Affordable Housing Policy;
2. An Affordable Housing Contributions Scheme.
B. The Draft Affordable Housing Policy (Attachment A2) be placed on public exhibition for a period of 28 days. A report is to be brought back to Council to consider any feedback on the Draft Policy.
C. The Affordable Housing Options Paper (Attachment A1) and the Education Brochure (Attachment A3) be made available as a supporting study to the public exhibition of the Draft Affordable Housing Policy
D. That prior to exhibition the Director of Strategy and Environment be given the authority to make minor changes of a typographical nature that do not alter the overall content to any significant degree
| Alexandra PlumbUrban Planner | Kate PatersonInfrastructure Coordinator |
| Craige WyseTeam Leader Urban Planning | Antony FabbroManager Urban & Heritage Planning |
| Jacob SifeActing Director Strategy and Environment |
| Attachments: | A1⇩ | Ku-ring-gai Affordable Housing Options Paper Final November 2024 – Prepared by HillPDA | 2024/387518 | |
| A2⇩ | Draft Ku-ring-gai Affordable Housing Policy (Final November 2024) prepared by HillPDA | 2024/387906 | ||
| A3⇩ | Affordable Housing Education Brochure | 2024/387152 |
| ATTACHMENT No: 1 – Ku-ring-gai Affordable Housing Options Paper Final November 2024 – Prepared by HillPDA | Item No: GB.10 |
| ATTACHMENT No: 2 – Draft Ku-ring-gai Affordable Housing Policy (Final November 2024) prepared by HillPDA | Item No: GB.10 |
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