Draft Western Sydney Regional Affordable Rental Housing Contribution Scheme and Plan

Draft Western Sydney Regional Affordable Rental Housing Contribution Scheme and Plan

The draft Western Sydney Regional Affordable Rental Housing Contribution Scheme and draft Distribution Plan are on public exhibition from 10 March until 7 April 2025.

To submit your feedback:

• Complete the online Submission Form, or
• email council@bmcc.nsw.gov.au Attention to: City Planning.

Supporting documents:

Please see the information below (also available in the Document Library to the right of this webpage):

• Appendix A: Evidence Base for the Western Sydney Affordable Rental Housing Scheme
• Appendix B: Western Sydney Affordable Rental Housing Contribution Scheme Economic Testing
• Summary and FAQs

Enquiries:

For further enquiries please contact Madeleine Brady on mrbrady@bmcc.nsw.gov.au

Draft Western Sydney Regional Affordable Rental Housing Contribution Scheme and Plan

Blue Mountains City Council is participating in the Draft Western Sydney Regional Affordable Rental Housing Contribution Scheme (RARHCS) alongside four other Western Sydney councils:

• Blacktown City
• Hawkesbury City
• Camden
• Wollondilly Shire

The preparation of a draft affordable housing contribution scheme by Councils is required by the NSW Department of Planning, Housing and Infrastructure (DPHI).

This regional initiative seeks to tackle the growing challenge of housing affordability by implementing a development contribution. The funds collected will be used to support the delivery of affordable rental housing across Greater Western Sydney. On 30 July 2024, Blue Mountains City Council resolved to publicly exhibit the draft scheme.

The Blue Mountains context

Blue Mountains City Council is committed to the provision of housing to meet the needs of the community within the local government area, with a focus on improving and increasing housing diversity across the Blue Mountains, including for essential workers and vulnerable members of our community. This commitment is inclusive of research and advocacy, as well as embedding actions in key strategic governing documents.

Affordable housing needs in the Blue Mountains were explored in the Affordable Housing Review 2023 and presented to the elected Council at the ordinary meeting of 25 July 2023. The Review provided context on housing needs in the Blue Mountains was instrumental in the development of the BMCC Affordable Housing Policy which was endorsed by Council on the 26 November 2024.

As a unique World Heritage-listed region, the Blue Mountains faces distinct planning challenges, balancing environmental protection, heritage conservation, and sustainable development. The Council's participation in this regional scheme ensures that any proposed contribution mechanism is implemented in a way that aligns with local planning controls, including the Blue Mountains Local Environmental Plan (LEP) 2015 and Development Control Plan (DCP) 2015.

The Draft Western Sydney Regional Affordable Rental Housing Scheme

The Western Sydney region, including the Blue Mountains, is experiencing rising housing costs that impact essential workers, families, and vulnerable community members. By working collaboratively, these five councils aim to create a sustainable and equitable approach to securing affordable rental housing. When used alongside Commonwealth Government funding, the contributions will directly fund an estimated 3,600 permanent affordable rental housing dwellings for residents of the five Council areas over the first 10 years of the scheme. The draft scheme is accompanied by a Distribution Plan. The draft Distribution Plan sets out details for how the contributions from the scheme would be used to commission and manage the affordable rental housing in the long-term.

As part of Blue Mountains City Council’s commitment to the provision of affordable Housing in the region, The Draft Western Sydney Regional Affordable Rental Housing Contribution Scheme (RARHCS) is a proposed initiative by five Western Sydney councils, to help address the growing housing affordability crisis by introducing a small monetary contribution on certain new developments. The funds raised will be used, alongside Commonwealth Government support, to deliver long-term affordable rental housing, while maintaining the environmental protections and heritage values set out in the Blue Mountains Local Environmental Plan (LEP) 2015 and Development Control Plan (DCP) 2015.

What is Being Proposed?

• A low monetary contribution will apply to some new developments from March 2028 onwards to fund affordable rental housing.
• The lead-in time of three years ensures that there is not an impact on current supply of new housing and provides notice to the community and development industry.
• The funds collected will be used to provide affordable rental housing for very low-, low- and moderate-income households.
• The housing will be for local households including essential workers, families, seniors and others who are not able to afford the high price of private rentals.
• The draft scheme will apply across five council areas, including the Blue Mountains, Blacktown, Hawkesbury, Camden, and Wollondilly.
• The draft Distribution Plan outlines how the funds will be managed and allocated for affordable housing projects.

Contribution Amounts & Key Details

The draft scheme is proposed to commence in March 2028, applying only to new development applications lodged after this date. It will be implemented through amendments to the Local Environmental Plans (LEPs) of the five participating councils and an amending State Environmental Planning Policy (SEPP) to ensure a consistent approach across the region.

Who Will be Affected?

• Residential Contribution: 1.5% of floor space applies to:
  • New residential subdivisions (subdivision DA stage).
  • Residential flat buildings.
  • Shop-top housing.
  • New attached dwellings (terrace houses).
  • New secondary dwellings (granny flats).
  • New dual occupancies.
• Non-Residential Contribution - 0.3% of floor space applies to:
  • Large non-residential developments (over 1000 sqm gross floor space), including:
    • Retail.
    • Commercial.
    • Industrial developments.

Who Will NOT be Affected?

• The scheme does not apply to:
  • Existing homeowners or new home buyers purchasing single dwellings, as development applications for new single dwellings and alterations/additions are exempt from payment.
  • New single dwellings (defined as dwelling houses) on a single lot of land.
  • Residential alterations and additions.
  • Replacement development that doesn’t result in additional floor space.
  • Affordable housing, social housing, or seniors housing developments.
  • Small non-residential development (under 1000 sqm of gross floor space).
  • Community facilities.

Why is this Important for the Blue Mountains?

• Supporting the Region – The scheme will contribute to the ability of vulnerable community members to continue to live affordably in the Blue Mountains.
• Balancing Growth & Sustainability – The contribution scheme has been carefully designed to minimise impacts on development feasibility, with a three-year lead-in period to allow for planning and adjustments.
• Protecting Local Character – The Blue Mountains’ planning framework will ensure that any new development aligns with the region’s unique heritage and environmental values while contributing to affordable housing for our community.

Next steps

After the public exhibition of the draft Scheme and Distribution Plan, the feedback received will be considered by each Council and taken into consideration when finalising the Scheme and Distribution Plan. Each Council will then decide whether to endorse and implement the Scheme.

The final scheme will be enabled via an amendment to environmental planning instruments, including Council LEPs, and would only apply to development applications lodged on or after the commencement date in March 2028.

Image left: Blue Mountains Houses at sunset (Blue Mountains City Council Photo Library).
Image right: Nightingale Affordable Housing - 1 by Breathe in Brunswick Victoria, photo by Tom Ross.