Initial briefings to the NSW Labor government released it had handed a project housing construction shortfall of 134,000 dwellings over 5 years.

The government 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.

With all this in mind, the government hopes to improve the planning system by incentivising residential developers that include at least 15% affordable housing in their plans by:

• granting developers access to the State Significant Development planning approval pathway if housing developments with a capital investment value over $75 million allocate at least 15% of the total gross floor area for affordable housing, and
• in addition, these projects will benefit from a 30% floor space ratio or height bonus above local environment plans.

Capital investment value includes all costs necessary to establish and operate the project (including design and construction costs but not including land costs or GST).

The existing SSD pathway was established by the former Coalition government and sees proposals assessed by the NSW Department of Planning and Environment. 

The benefit of this pathway is planning decisions are often made faster, providing certainty sooner to communities and the private sector. 

More housing supply reforms are on the horizon.