Suggested negotiation steps

The following process is suggested to help facilitate an effective negotiation of an Affordable Housing Agreement:

Who should be involved:

  • Responsible Authority

Key Steps:

  • The Responsible Authority identifies affordable housing needs.
  • The Responsible Authority prepares planning or non-planning responses.

Things to consider:

  • Early planning is necessary to determine the level of need for affordable housing in a municipality.
  • Due consideration should first be given to State Planning legislation and policy.

Who should be involved:

  • Responsible Authority
  • Landowners
  • End recipient of the affordable housing (such as a registered housing agency (optional)
  • Broker (optional)

Key Steps:

  • The Responsible Authority clearly articulates the proposed affordable housing outcome they are seeking, with reference to this guidance
  • The Responsible Authority confirms the priority of an affordable housing outcome in relation to any other planning outcomes that are being sought, above those set out in the appropriate planning controls
  • The Responsible Authority refers landowners to this guidance and discusses the principles that are proposed to underpin any negotiation
  • The Responsible Authority refers the landowner to information on potential end recipients of the affordable housing (such as a Registered Housing Agency)
  • The Responsible Authority invites the landowner to enter into negotiations in relation to an affordable housing outcome for the site.

Things to consider:

  • Issues that a Responsible Authority might consider to determine whether a request should be made to a landowner to voluntarily include affordable housing in a development:
    • Any value created by the planning process or other mechanism or incentive the Responsible Authority may provide to support an affordable housing outcome
    • Principles, definitions and other matters set out within this guidance
    • Suitability of the site location and built form proposition for affordable housing
    • Site constraints; the priority and cost implications of any other contributions that are sought beyond those otherwise required under the relevant planning controls; and the planning circumstances including the planning application history and stage
    • The landowner’s willingness to consider including an affordable housing component.

Who should be involved:

  • Responsible Authority
  • Landowner
  • End recipient of the affordable housing (such as a registered housing agency (optional )
  • Broker (optional)

Key steps:

  • The Responsible Authority and landowner discuss the viability of the proposal to include affordable housing as part of the development.
  • Discussions between the landowner and  potential end recipients, to determine the end recipients capacity to support and enhance a proposed affordable housing outcome.
  • Negotiations regarding the method by which the proposed affordable housing will be delivered and on what terms.

Things to consider:

  • The Responsible Authority should consider a range of issues in determining the type, amount and delivery mechanism as a starting point for discussions with the landowner, including:
    • The value of incentives that could support the viability of the outcome and the way this value may be utilised to deliver different affordable housing outcomes
    • The diversity of affordable housing types that the Responsible Authority prioritises based on the assessment of local housing need, and the corresponding cost impact of delivering different dwelling types, sizes and outcomes for different end recipients
    • End recipient interest, capacity (both financial and administrative) and constraints to operate effectively as owners or managers of the affordable housing being proposed
    • The appropriateness of the affordable housing being delivered and managed on-site (including consideration to long-term financial viability of ownership or management for the end recipient)
    • Whether it may be appropriate that an agreed contribution to affordable housing is instead provided on another site or in another form (on the advice and agreement of the end recipient) and the process to manage this contribution

Who should be involved:

  • Landowners

Key steps:

  • Finalise agreement of the negotiated outcome, including evidence of support by the proposed end recipient.
  • Proceed to translate the agreement into an appropriate planning control for each party's endorsement.

Things to consider:

  • An Affordable Housing Agreement secured through a section 173 agreement is legally binding between the landowner and another party.
  • The section 173 agreement remains with the land, regardless of whether there is a change in land ownership.