Notice

Key Messages:
  • There is no right amount of affordable housing to be included in a permit application or permit variation. The Director of Housing or a Registered Housing Agency should be consulted in this regard.

  • The dwellings classed as affordable housing may be owned by a range of organisations and people.

  • If the houses are to be owned by a Local Council, the developer, or any other organisation, mechanisms should be put in place to ensure the housing remains affordable housing and remains available to eligible households.

  • In preparing an Affordable Housing Agreement the parties should determine who will ultimately manage any affordable housing rental dwellings, which are eligible to be managed by a range of organisations and people.

  • A way to provide certainty that adequate property and tenancy management services are in place in the long run is for the management to be undertaken by the Director of Housing or a registered housing agency.

For the purpose of the Planning and Environment Act 1987, affordable housing is housing, including social housing, that is appropriate for the housing needs of very low, low and moderate-income households.

The Specified Matters Under Section 3AA(2) – Ministerial Notice specifies the matters below that must be considered in determining whether housing provided under an Affordable Housing Agreement is appropriate for the needs of very low, low and moderate income households:

Specified Matters Under Section 3AA(2) – Ministerial Notice

How is regard given to ‘allocation’ in a voluntary Affordable Housing Agreement?

Parties to a voluntary Affordable Housing Agreement must consider how any dwellings provided under the agreement might be allocated to eligible households. Eligible households include very low income households, low income households and moderate income households as defined under the Planning and Environment Act 1987.

If the dwellings are social housing, allocation will be subject to the regulations governing their allocation.

What processes will be in place to allocate dwellings to households who need them?

Whoever is managing the rental or sale of the properties will need to have a process in place to make sure the property is allocated (i.e. let or sold) to an eligible household. In making the decision on allocation they should have regard to the Governor in Council Order and to the Specified Matters Under Section 3AA(2) – Ministerial Notice.

Affordability: in terms of the capacity for very low income, low income and moderate income households that it is intended for.

How is regard given to ‘affordability’ in a voluntary Affordable Housing Agreement?

Parties to a voluntary Affordable Housing Agreement must consider whether housing costs – in terms of rent or mortgage payments – will be affordable for very low income households; or low income households; or moderate income households. To be affordable, housing costs cannot account for more than a certain proportion of household income. A widely accepted benchmark is that to be affordable, housing costs must not account for more than 30 per cent of gross household income.

In the case of affordable housing which is intended to be sold (rather than leased) to an eligible household, consideration needs to be given to how the property’s sale can be made viable (affordable). Parties are advised to make very conservative assumptions about the availability and terms of finance (mortgage or other instrument) for the proposed property for households within the defined income ranges and under the ownership terms proposed.

How will ongoing affordability be assured?

If a voluntary Affordable Housing Agreement is secured through a section 173 agreement, that agreement can set out how long the dwelling must be used for the provision of affordable housing. The section 173 is registered on the title of the dwelling, so remains in place even if the property is sold.

If the Responsible Authority wants the property to remain as affordable housing in perpetuity, it is recommended that the section 173 set out that the property, or the proceeds from the sale of the property, are to be used for the provision of affordable housing in perpetuity, and avoid clauses that set out that the dwellings are never to be sold. This allows the owner of the property some flexibility to deliver sustainable and strategic asset management for the best outcome of their tenants and their organisation. It also allows for affordable housing shared equity schemes to operate without having to seek approval from the responsible authority at each transaction in the future.

Longevity: in terms of the public benefit of the provision.

How is regard given to ‘longevity’ in a voluntary Affordable Housing Agreement?

Parties to a voluntary Affordable Housing Agreement must consider how the public benefit of the provision of affordable housing or a contribution to housing affordability is retained.

Will the affordable housing provided be secured in the longer term (for example 20-25 years, perpetuity) or is it time limited? If the affordable housing is to be sold at a later date, will the proceeds be re-invested in affordable housing? There is no single method for securing affordable housing.

One way is to direct the affordable housing to a registered housing agency regulated under the Housing Act 1983.

How is regard given to ‘tenure’ in a voluntary Affordable Housing Agreement?

Parties to a voluntary Affordable Housing Agreement must consider how secure the tenancy of the affordable housing provided as part of an Affordable Housing Agreement will be. The provision of rental housing owned and/or managed by a registered housing agency provides a way of providing secure tenure, but there are many other ways housing might be provided such as shared equity and low-cost purchase schemes.

Type of housing: in terms of form and quality.

How is regard given to ‘type of housing’ in a voluntary Affordable Housing Agreement?

Parties to a voluntary Affordable Housing Agreement must consider whether the housing provided as part of an Affordable Housing Agreement will be suitable in terms of:

  • size (for example the number of bedrooms)
  • quality (beyond mandated building standards such as the quality of internal finishes and energy efficiency)
  • accessibility (for example whether there are stairs) for the intended target resident group.

Location: in terms of site location and proximity to amenities, employment and transport.

How is regard given to ‘location’ in a voluntary Affordable Housing Agreement?

Parties to a voluntary Affordable Housing Agreement must consider the location of the affordable housing secured under an agreement in relation to access to services, transport and employment in terms of the very low income, low income and moderate-income households that it is intended for.

Integration: in terms of the physical build and local community.

How is regard given to ‘integration’ in a voluntary Affordable Housing Agreement?

Parties to a voluntary Affordable Housing Agreement must consider how the affordable housing will be integrated into the physical build and local community.

In terms of integration with the physical build, will the design of the affordable housing look similar or different to other dwellings within the same development?

In terms of integration into the local community, consideration should be given to neighbourhood character and community cohesion.

How is regard given to ‘official estimates of housing needs’ in a voluntary Affordable Housing Agreement?

Consideration needs to be given to the policy basis for the level or type of affordable housing proposed as part of a voluntary Affordable Housing Agreement. The parties to a negotiation should be able to provide evidence of the need for a particular type of affordable housing in the area of the proposed development.

Official estimates of housing needs include:

Read more information about the Notice

Page last updated: 30/10/2018