Affordable Housing is being defined as any residence where the rent falls below the “median rent” for all housing in a Local Government Area (the mid-point on the rent scale from $0 per week to the highest rental in the LGA).
This “levy” (tax) originated in an outdated policy and had descended into dis-use. Yet within the stewardship of the Housing Diversity State Environmental Planning Policy on Housing Diversity, it has reappeared.
Many see this tax as a barrier to the enhancement of a building, and its host suburb—and a barrier to the remodeling and even the creation of more quality homes—with new homeowners getting stuck with extra taxes.
The NSW Productivity Commissioner acknowledged this in the Infrastructure Contributions Review Report where he questioned the concept of imposing fees and charges on developers to cover the cost of cost-efficient housing. The NSW Productivity Commission Report said:
“It is not clear that housing is being made more affordable as a result of these [affordable housing] schemes, as … the creation of a small quantity of ‘affordable housing’, may be at the cost of making other housing more expensive.”
Source: NSW Productivity Commission, Review of Infrastructure Contributions in New South Wales – Final Report, November 2020, p 82.
All things considered, more improvements may need to be ‘built’ into NSW Planning.