Waverley Affordable Housing Contribution Scheme 2023

Waverley Affordable Housing Contributions

Scheme 2023

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Waverley Affordable Housing Contribution Scheme 2023

Document Control

No. Amendment Date

1 Document first adopted 01/12/2020
2 Amendments proposed for clarity 13/04/2021
3 Amendments in line with Gateway Determination, sent to 4 April 2023 SPDC 04/04/2023
4 Amendments in line with Gateway Determination and SPDC minutes 31/05/2023
5 Amendments in line with DPE Letter to Council dated 19 September 2023 04/10/2023

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Waverley Affordable Housing Contribution Scheme 2023

Table of Contents

Contents
1. Strategic context and background ...............................................................................................................................4
1.1. Background ................................................................................................................................................................ 4
1.2. Introduction ................................................................................................................................................................ 4
1.3. Aim of this scheme ..................................................................................................................................................... 6
1.4. Where does the scheme apply? .................................................................................................................................. 6
1.5. What types of development does the scheme apply to? ............................................................................................ 6
1.6. Overview of affordable housing need in Waverley ..................................................................................................... 6
1.7. Legislative basis for affordable housing contributions ............................................................................................... 7
1.8. Relationship to other affordable housing provisions in the LGA................................................................................. 7
1.9. Affordable housing principles ..................................................................................................................................... 7

2. Affordable housing contributions ................................................................................................................................8

2.1. Voluntary Planning Agreements ................................................................................................................................. 8
2.2. Monetary contribution rates in the LEP...................................................................................................................... 8
2.2.1. Dedication of dwellings ................................................................................................................................................ 8
2.3. Development that is exempt from the affordable housing contribution scheme ....................................................... 8
2.4. Conditions of consent for affordable housing............................................................................................................. 8

3. Administration and implementation............................................................................................................................9

3.1. How to make a contribution....................................................................................................................................... 9
3.2. Processes for the distribution and management of funds .......................................................................................... 9
3.4. How tenants are assessed and allocated homes ...................................................................................................... 10
3.5. Monitoring and review of scheme ................................................................................ Error! Bookmark not defined.

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Waverley Affordable Housing Contribution Scheme 2023

1. Strategic context and background

1.1. Background
Section 7.32 of the Act requires an affordable housing contributions scheme in order to impose a condition
requiring land or contributions for affordable housing.

The Waverley Affordable Housing Needs Analysis (Appendix A) demonstrates the need to increase the
supply of affordable rental housing in Waverley Local Government Area (LGA). Without provision of more
affordable forms of housing, the market will continue to produce more expensive housing in the area,so
that housing will only be affordable to households on relatively high incomes. The flow on effect is that
existing lower income groups would need to move out of the area, and new lower income households
may be prevented from finding housing in the local area.

The Waverley LGA is undergoing significant change from projected population growth and redevelopment
pressures. These changes combined with access to the eastern beaches, significant open spaces, Bondi
Junction rail interchange, commercial and retail centre makes the area an attractive place to live, work
and visit. This will continue to place upward pressure on property values beyond the means of lower
income households to purchase or rent in the area.

1.2. Introduction
The Waverley Affordable Housing Contributions Scheme (herein referred to as the Scheme) aims to ensure
that lower income households continue to live and work locally within the Waverley LGA, to facilitate a
socially diverse and inclusive community.

Council’s affordable housing programs

Council administers its own affordable housing programs which comprise Council’s broader Social and
Affordable Housing Program. These are:

▪ Waverley Affordable Housing Program (WAHP)

▪ Waverley Housing for Older People (WHOP), and
▪ Waverley Community Living Program (WCLP).

Each of these programs targets different groups in need of social and affordable housing support in the
local community.

At the time that this scheme was prepared, Council owns 79 housing units as part of Council’s overall
program, with many of these located in the suburb of Queens Park. The majority of current tenants in
Council’s program are single person households.

Affordable stock owned by Council are administered by an eligible community housing provider. The

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provider is appointed by a tender process and contractual agreements between Council and the
community housing provider include maintenance responsibilities and a performance management
framework which includes but is not limited to the provision of detailed financial statements; quarterly
performance monitoring reports relating to vacancies; renewals compliments and complaints; and annual
outcomes monitoring for tenants.

Current approach for collecting contributions

Waverley’s current approach to collecting affordable housing contributions is under Waverley’s Planning
Agreement Policy 2014. This Policy has been successfully utilised to negotiate and draft planning agreements
accompanying Development Applications seeking a Clause 4.6 variation to Clause 4.4 Floor space ratio for
additional floorspace. Waverley has had a longstanding commitment to the provision of affordable housing
where every planning agreement contribution allocates 10% of funds towards affordable housing.
Amendment 3 increased this to a minimum of 25%.

The NSW Government released a Ministerial Direction requiring that Councils who wish to require land or
contributions for affordable housing through a voluntary planning agreement must have an affordable
housing contributions scheme. Council wishes to continue allocating planning agreement funds to
affordable housing and hence the preparation of this Scheme.

Proposed approach for collecting contributions

Under State Environmental Planning Policy (Housing) 2021 (previously known as State Environmental
Planning Policy No 70 – Affordable Housing (Revised Schemes)) (Housing SEPP) all Councils in NSW were
made eligible to start collecting affordable housing contributions where there is uplift in the planning
controls, an identified local housing need (Appendix A) and where it is viable.

Council has adopted the Local Housing Strategy which does not propose any upzoning in the LGA. This is
because it was determined that existing housing capacity under current controls would deliver the
appropriate housing supply to meet housing targets. Notwithstanding, the Local Housing Strategy
identified a strong need for affordable housing in the Waverley LGA and indicated that new market
housing was not addressing this need but exacerbating it by often reducing existing affordable housing. To
this end, there is a clear case for intervention, in the form of an affordable housing contribution, to ensure
that new housing delivery is contributing to the delivery of affordable housing. The LHS recommended a
percentage range of 1-3% contribution on all new residential apartment development and 10-15%
contribution on sites receiving uplift.

This scheme will apply a 1% contribution levy to the total gross floor area on all new residential apartment
development (including independent living units), multi-dwellings and mixed-used developments. The
levy rates are outlined in Section 2.2.

Furthermore, Council also receives unsolicited planning proposals from private industry. Council will seek
to apply an affordable housing contribution target of 10% of total gross floor area for sites subject to
uplift via a Planning Proposal.

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“Uplift” in a planning proposal refers to situations where a site’s value increases through increased gross
floor area, a change of zoning or other planning variations.

1.3. Aim of this scheme

The aim of the Scheme is to deliver affordable housing resulting from contributions in the Waverley LGA.
The scheme aims to:

• Support a socially diverse community

• Capture value attributed to individual landowners through uplift granted by the planning systemfor the
public purpose of affordable housing
• Expand Council’s existing affordable housing portfolio

1.4. Where does the scheme apply?

The Scheme applies to the whole Waverley Local Government Area.

1.5. What types of development does the scheme apply to?

The scheme applies to all new residential flat buildings, independent living units, multi-dwelling housing
and mixed-use development (shop top housing).

1.6. Overview of affordable housing need in Waverley

Affordable housing refers to a spectrum of housing options including social housing, affordable rental
housing, and certain types of market housing. There are few opportunities in Waverley to access
affordable housing. Unaffordability has been a growing issue over the last two decades as household
income-to-house price ratio has increased from 4:1 in 1994 to 12:1 in 2016. At present, Waverley is
severely unaffordable. Waverley’s rent for all dwellings is 1.3 times higher than the Sydney average. As a
result, 30% of all renting households are in rental stress and, most strikingly, 85% of low-income
households are in rental stress.

The current forms of affordable housing supply are not going to meet the relevant demand. Waverley has
the fifth lowest key worker population in Sydney. Where key workers are on a very low, low and moderate
income, this is contributing to overall demand for affordable housing. To meet the base demand, 11% of
total dwelling stock needs to be affordable. Projecting this to 2036, this equates to an additional 600
affordable rental dwellings, or approx. 30 affordable rental dwellings per annum. Proposed affordable
housing targets of 1% of gross floor area on all new development specified in section 1.5 and a target of
10% of total gross floor area on development receiving uplift, while not meeting all underlying demand,
will provide a pathway to increasing affordable housing in the LGA. Furthermore, to retain the current
proportion (2%) and ensure no further net loss of social housing, 90 social housing units should be
delivered by 2036. Whilst Council can continue to advocate for this, the state government owns and
manages social housing.

The current sources of affordable housing are from what is approved under the Housing SEPP Waverley
Council’s Affordable Housing program and what’s available in the market. The current supply of affordable
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rental housing is only meeting 57% of demand and 43% of households in rental stress are not going to
have their housing needs met in the current housing climate.

1.7. Legislative basis for affordable housing contributions

Residential development and mixed-use development excluding dwelling houses (a building containing
only one dwelling) and employment generating only development within the Waverley LGA is subject to
the collection of contributions for affordable housing under Section 7.32 Clause 1 of the Act because:

• The Housing SEPP is applied to the whole state. It allows Councils to collect affordable housing
contributions where there is an identified need for affordable housing in the area. Appendix A provides
additional analysis for affordable housing in the LGA.

• Redevelopment in the LGA will reduce the availability of affordable housing by increasing demandfor
affordable housing while also increasing the cost of housing.
1.8. Relationship to other affordable housing provisions in the LGA
Where an applicant seeks to utilise the bonus provisions of the Housing SEPP - Division 1 In-fill affordable
housing, this contributions plan does not apply to the gross floor area dedicated to affordable housing as
part of that development.

1.9. Affordable housing principles

The Waverley affordable housing principles are:

• Affordable housing must be provided and managed in Waverley so that a socially diverse residential
population representative of all income groups is available in Waverley,
• Affordable housing must be rented to tenants whose gross household incomes fall within the following
ranges of percentages of the median household income for the time being for the Sydney Statistical
Division according to the Australian Bureau of Statistics:
- Very low income household - less than 50%
- Low income household - 50% or more, but less than 80%
- Moderate income household - 80–120%
- and at rents that do not exceed a benchmark of 30% of their actual household income, and
• Dwellings provided for affordable housing must be managed so as to maintain their continueduse
for affordable housing,
• Rental income from affordable housing received by or on behalf of the Council, after deductionof
normal landlord’s expenses (including management and maintenance costs and all rates andtaxes
payable in connection with the dwellings), must be used for the purpose of improving or replacing
affordable housing or for providing additional affordable housing in Waverley or for research and
policy development for housing and affordable housing purposes, and
• Affordable housing must consist of dwellings constructed to a standard that, in the opinion of the
consent authority, is consistent with other dwellings within the development, especially in terms of
internal fittings and finishes, solar access and privacy.

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2. Affordable housing contributions

2.1. Voluntary Planning Agreements
The Planning agreement policy 2014 requires that at a minimum 25% of all VPA contributions go to
affordable housing. In some circumstances, this may be higher.

2.2. Monetary contribution rates in the LEP

The levy will be calculated as a percentage across the whole development in accordance with the market
value of residential floorspace at the time of the planning proposal being assessed and before a Gateway
Determination. These rates are outlined on Council’s website [insert hyperlink] and will be updated on a
regular basis in line with current market conditions.
• A levy of 1% of the total gross floor area will be sought to apply to all new residential flat buildings,
independent living units, multi-dwelling housing and mixed-use developments (shop top housing)
only. This excludes residential development not specified in the above, or commercial generating only
developments and other types of development referred to in section 2.3.
• A levy of the total gross floor area will apply to sites receiving uplift through planning proposals, with
a target rate of 10% of total gross floor area.
Sites that have previously received uplift through the planning proposal process and have also provided a
contribution in line with Council’s AHCS will not be subject to the prescribed levy of 1% of the total gross floor
area at DA stage referred to above.

2.2.1. Dedication of dwellings

Council’s preference is for monetary contributions. However, where the opportunity arises that the
monetary contribution is equal to that of a whole unit (at least 50 sqm), this could be dedicated to Council.

2.3. Development that is exempt from the affordable housing contribution scheme
Residential development not specified in section 1.5, employment generating only developments, social and
affordable housing developed exclusively for the purposes of affordable housing and residential care facilities are
all exempt from the affordable housing contribution scheme.

2.4. Conditions of consent for affordable housing

Where the total floor area to be dedicated as affordable housing is less than the amount equivalent to a
unit at least 50sqm or where the proposed dwellings are considered not appropriate for the purpose of
affordable housing (subject to Council approval), an equivalent monetary contribution that would
otherwise be required will be sought in accordance with the rate, outlined in section 2.2.

Where an in-lieu contribution is being made the condition of consent is to contain but not be limited to,
the following information:

• The monetary contribution required in accordance with the rates as specified under 2.2 of
this plan;
• The total floor area of the development used for residential purposes that was used in the
calculations;
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• A requirement that the condition be satisfied (to Council’s approval) prior to the issue of a
construction certificate.

3. Administration and implementation

3.1. How to make a contribution
Payment of contributions will be by unendorsed bank cheque or electronic transfer to the Council prior
to issue of any construction certificate. In circumstances where no construction certificate is required,
payment isrequired prior to commencement of use/occupation.

3.2. Processes for the distribution and management of funds

Contributions resulting from in-kind or monetary contributions are to be provided in accordance with the
following criteria:

• Affordable housing is to be dedicated to the Council

• Contributions are to be pooled and managed by the Council until such time as there is
sufficient funding available to develop and/or acquire new affordable housing
• Affordable housing units are owned by the Council and managed by an eligible community
housing provider
• Affordable housing is rented to low and moderate income households at 30 per cent of gross
household income
• All rent received after deduction of management and maintenance costs will be reinvested
back into Council’s Affordable Housing Program to be used for the purpose of improving,
replacing or providing additional affordable rental housing in Waverley LGA, and
• Affordable housing is designed and constructed to a standard which, in the opinion of Council,
is consistent with other dwellings within the same development, that is, they are not
differentiated (internally and externally) as affordable housing compared with the design of
other housing.

3.3. Tenant eligibility criteria1

In order to be eligible to participate in the WAHP, successful applicants must be able to substantiate
compliance with the following criteria:

a) The average household gross annual income, which includes all people in the household aged
eighteen (18) years and older, taken over the last two (2) years prior to application to WAHP much
fall within the following ranges of percentages of the median household income from the
Waverley Statistical Division according to the Australian Bureau of Statistics:
• Low 0% - 80% (the precise income amount will vary annually)
• Medium 0% - 120% (the precise income amount will vary annually)
b) Must be able to demonstrate a connectedness to the Waverley LGA area meaning a tenant must
be living in the Council LGA currently and for the past three (3) years; or if not living the Waverley
Council LGA, have lived in the area for at least five (5) years in the previous ten (10) years;
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c) Must not own assets or property which could reasonably be expected to be used to solve their
housing needs;
d) Employees, or immediate relatives of employees of the Waverley Council and the Affordable
Housing Manager (“AHM”);
e) Must not be already living in secure medium and long term subsidized social housing the Eastern
Suburbs including the Local Government Area of Waverley, Woollahra, Randwick, Botany and City
of Sydney at the time of application submission;
f) Prior to accepting potential tenants on the waiting list, their eligibility needs to be confirmed
through:
• proof of income, through documentation such as income tax returns, social security
documentation, declaration of all assets etc, and
• proof of connection with the Waverley area, through evidence of current and past
phone/power bills and/or current and past rent receipts.

Interviews are conducted with applicants in order to verify compliance with eligibility criteria; and

g) Prior to placement of anyone from the waiting list in a dwelling, the income and connectedness
criteria, lack of secure accommodation are to be verified.

Applicants no longer meeting the criteria should be removed from the waiting list.

3.4. How tenants are assessed and allocated homes

WAHP properties are allocated to approved tenants as per the following:

a) properties will be advertised. Advertisements for properties will clearly stipulate all eligibility
criteria; applicants who fulfil the eligibility criteria will be short listed;
b) eligible applicants whose household numbers are appropriate to the available property size will
be further short listed; and
c) all eligible potential tenants will enter a ballot which will be drawn.

Three (3) years is the maximum period available to any tenant in the WAHP. Shorter periods of tenure may
be negotiated for privately owned rent capped properties. Previous tenants unsuccessful at the ballotwill be
advised of new similar properties coming into the WAHP by way of letter from the respective AHMfor twelve
(12) months only. It is noted, there will be no succession or transfer of tenure. The AHM should inform
prospective tenants of all possible conditions of tenure.

3.5. Monitoring and review of scheme

Council will regularly review this policy and the manner in which it operates. As necessary, amendments
and other changes may be required to ensure the policy operates in the way that Council intends.

1 This tenant eligibility criteria is from the Waverley Affordable Housing Program Policy 2007 (Amendment 1). This policy will be
updated from time to time and should be referred to.

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