Three key parts of Sydney will be excluded from a controversial residential fast-track only 18 months after it began, sparking fears the protection of job centres and tougher affordable housing requirements will kill off the scheme’s benefits.
The commercial zones of CBDs in the city, North Sydney and Parramatta will be quarantined from the Housing Delivery Authority pathway to preserve employment growth, while developers expressing interest in using the scheme would be subject to much more stringent affordable housing requirements.
The Housing Delivery Authority was established in December 2024 as a means of helping developers fast-track applications through the planning system, bypassing council approval processes. It faced criticism from some councils which alleged the authority was enabling developers to upsize previously refused projects.
Residential apartment projects with a capital cost of more than $60 million could be fast-tracked through the planning system if they could deliver homes quickly and set aside a proportion of dwellings for affordable housing.
A Department of Planning, Housing and Infrastructure review of the first year of HDA’s operations, released this month, recommended immediate changes to scale back the scope of the authority.
Urban Taskforce chief executive Tom Forrest emailed his members raising concerns about several of the changes, including requirements for affordable housing to be provided in perpetuity, either equal to or greater than existing council and state policies, and excluding expressions of interest in three CBDs and sites designated regionally significant industrial land.
“The benefit of the HDA process was that the industry was able to submit EOIs through which they were advising government what was feasible, and have projects decided on merit,” he wrote.
“By setting parameters that deny the cost of construction and the realities of a tight or negative feasibility equation, we fear that they are effectively killing off the benefits of the HDA.”
Planning Minister Paul Scully said there was no expectation all affordable housing “must be in perpetuity” and the changes were consistent with other state-led rezonings.
“However, when there is a large change to site-planning controls proposed through a concurrent rezoning, in perpetuity affordable housing should be considered,” he said. “Claims that these changes will kill off benefits of the HDA pathway are grossly exaggerated. It’s an optional planning pathway about delivering the homes NSW needs.”
The HDA has considered 620 EOIs since being established, and the review found a stark variance in affordable housing commitments, citing one application that included only 2 per cent for 10 years.
“Cost-of-living pressures have driven the demand and need for greater provision of affordable housing for very low to moderate-income households,” the review found. “Changes are required to clarify expectations regarding quantum and tenure of the affordable housing commitment outlined in an EOI.”
While affordable housing is one of the criteria for the HDA, it had previously only designated that the “proposal will contribute a measurable quantity of affordable housing”.
The review recommended fixing this by requiring expression of interests to include affordable housing in perpetuity “where the uplift sought through a concurrent rezoning is significant”. The definition for significant was not included in the review. If a developer received a concurrent rezoning, the affordable housing component would need to be equal or above what is determined in existing council or state government policies.
UDIA NSW chief executive Stuart Ayres said: “Fast-tracking housing only works if the approval pathway is commercially realistic.”
“Requiring in-perpetuity affordable housing requirements, and removing the option for a concurrent rezoning in some areas reduces flexibility and overlooks the practical reality that not every site is feasible under existing controls.”
Feasibility remained “front of mind” in relation to the affordable housing component, Property Council NSW executive director Anita Hugo said.
In comments to the Herald, Forrest criticised the quarantining of the industrial land categorised as regionally significant, along with the three commercial cores in the CBDs of the city, North Sydney and Parramatta.
“Why?” he asked of the CBD areas. “These are areas well serviced by public transport. We have significant concerns about City of Sydney. It smacks of a political fix between the state government and [Lord Mayor] Clover Moore.
“The rest of the world has gone with mixed-use development because there is an interface between residential, commercial and retail. They shouldn’t be considered as completely separate land uses.”
The eight accelerated transport development precincts would also be excluded from the TOD pathway, while developers would be barred from obtaining a concurrent rezoning in areas where the department had completed a state-led rezoning or finalised a masterplan.
“There are not many places left in Sydney where the HDA pathway will work now,” said a source in the development industry, speaking on the condition of anonymity to protect his relationships with government.
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Max Maddison is a state political reporter at The Sydney Morning Herald.From our partners
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