FAQs

Affordable housing is housing that is appropriate for the needs of a range of very low, low and moderate income households and priced so that these households are also able to meet other basic living costs.

Affordable rental housing is managed like a private rental property, but it has eligibility criteria and the managers are mostly not-for-profit community housing providers.

Affordable rental housing is not the same as social housing which is owned and managed by government (sometimes also known as public housing), as shown in the diagram below. Affordable rental housing is open to a broader range of households than social housing, has different eligibility criteria, rents are calculated differently, and it has different tenancy arrangements.

Source: Greater Sydney Region Plan 

Many different people need affordable rental housing. This may include people who work in lower paid jobs, who cannot afford market rents, or people working full-time in an essential services role in a hospital or for emergency services. People may also need affordable housing because of a change in their lives and financial situation or because they are a single parent family, or an older or younger single person. Sometimes affordable rental housing is only needed for a short- or medium-term period until people’s circumstances change or sometimes it is needed for a longer period of time.

Providing affordable housing in Western Sydney is important to creating sustainable, thriving communities where people can live and work without the stress of housing insecurity.

With lower incomes than eastern and central Sydney, many people in Western Sydney, including essential workers and young families, struggle to afford rising rents. Providing affordable rental housing would allow these groups to live in the area without being financially stretched or forced to move far away.

Affordable rental housing will help workers in key industries, including health, education, retail, hospitality and manufacturing, to live closer to where they work and will help to support these industries by housing their workforce. The draft scheme is proposing a very low, discounted contribution of 0.3 % for new large (over 1000 square metres in size) industrial, commercial and retail development to ensure that industry provides a modest contribution towards meeting the housing needs of workers in Western Sydney.  

The District Plan for Western Sydney identifies the importance of increasing the supply of affordable rental housing and includes targets in the range of 5 -10 per cent of new residential floorspace. The state government requires local councils to consider schemes to increase this supply. Local councils in Western Sydney are responding by working together, with assistance from the Western Sydney Planning Partnership and the Department of Planning, Housing and Infrastructure, to develop a draft scheme and an associated draft Distribution Plan that provides details on how funds collected will be managed to deliver affordable housing.

The draft Scheme provides a regional approach to help address the housing affordability crisis and ensures that the growth and development of the region directly contributes to the increasing need for affordable rental housing in Western Sydney.

The five Councils working together on the draft Scheme and participating in this exhibition are: Blue Mountains City Council, Blacktown City Council, Hawkesbury City Council, Camden Council and Wollondilly Shire Council.

The draft scheme overall is estimated to deliver over 3,600 affordable rental dwellings over a 10-year period across the five local government areas (with federal government financing also being used by the housing providers).

The housing will be required to be affordable rental housing- to be provided at below-market rates in-perpetuity (i.e. it will be legally required to stay as affordable housing forever).

The housing will need to meet the same planning requirements as any development and is intended to not appear any differently than standard housing. The new dwellings are likely to be medium density (e.g. terrace housing, villas or low-rise apartments depending on location and local planning) and will be built in accessible locations, near to transport and services. They will be built in stages over the life of the plan, as contributions become available.  

The residential part of the scheme (1.5% contribution) would apply to the following new residential accommodation development: 

• New residential subdivision- for Final Residential Lots applies at the subdivision DA stage (removing the need for a single future dwelling to pay a contribution)
• New residential flat buildings (including manor houses) and shop-top housing 
• New attached dwellings (terrace houses)
• New secondary dwellings and dual occupancy dwellings 

The scheme will not apply to single houses (defined as dwelling houses) on a single lot of land, or to residential alterations and additions or to replacement development that doesn’t result in additional floorspace. Other residential development that it will not apply to includes social and affordable housing and specialist housing, such as seniors housing.  

The non-residential part of the scheme (0.3% contribution) would apply to the following development: 

• New non-residential buildings over 1000 sqm in size ( gross floor area), including retail, commercial and industrial uses. 

The scheme will not apply to small business seeking to develop under 1000sqm and will not apply to community facilities. 

It is important that non-residential development contributes a small amount to affordable rental housing so that workers can afford to live close to where they work and to ensure workers are available to staff local businesses. The proposed contribution has been carefully considered to ensure it will not impact on new local business and jobs in Western Sydney. 

If approved, the scheme will commence in March 2028, applying to all development applications approved on or after this date. 

The scheme will apply as a condition of development consent before the issue of a construction certificate.

The draft scheme will help provide housing for a diverse range of people already living in the Council area, including essential workers, families, pensioners and others who are not able to afford the high price of private rentals. Once the scheme is in place from 2028 and construction of the housing commences, there will be an opportunity for local people who meet set criteria to apply to rent the homes built.

The draft scheme is designed to have no impact on existing homeowners or new home buyers, as development applications (DAs) for new single dwelling houses and renovations (alterations and additions) are exempt from payment.  Developers and landowners will pay contributions when subdividing land for new dwellings, and for multi-unit dwellings, secondary dwellings and dual occupancies. Large commercial, retail and industrial DAs will be required to make a small contribution, but smaller businesses proposing developments under 1000 sqm will not be affected.

The contribution has been set at a modest rate and with a long, 3-year introduction between exhibition of the draft Scheme and coming into effect in 2028, to ensure that it does not undermine the delivery of new development.

Expert economic and property consultants, SGS Economics and Planning and Hill PDA Consulting have advised the Councils during the development of the draft scheme. Their recommendations have been taken on board, including the 3-year lead in time for the scheme to commence. This lead-in provides clear information to the development industry and time to build the modest rate into development calculations, meaning that the contribution would be viable. 

The scheme also sets a modest contribution rate (1.5% equivalent of residential floor space and a discount rate of 0.3% of non-residential floorspace). This is much lower than the 5-10% signalled to the development industry in the Sydney Region and District Plans six years ago. It is also lower than the 10% affordable housing requirement included in the Federal Government’s Build to Rent bill, City of Sydney’s Affordable Housing scheme (3% rate) or the NSW Transit Oriented Development precincts (TODs) which feature a 2% rate. 

The lead in time allows time for the contribution to be easily absorbed into property price increases, expected over the three- year period. Further details about the economic testing and the viability of the scheme can be found in the document library: Western Sydney Affordable Rental Housing Contribution Scheme- Economic Testing (Hill PDA, updated in 2025). 

The contribution will be applied as a condition of development consent before the issue of a construction certificate.  It will be calculated by multiplying 1.5% of the proposed floor space area (or 0.3% for non-residential) against a dollar rate per square metre for each LGA (rates differ between LGAs to account for regional differences in floorspace and land value).

• 1.5% of the total floor space that is to be used for residential uses 
• 1.5% of the net developable area of land subject of a residential subdivision to create a final lot for development.
• 0.3% of the total floor space to be used for non-residential uses. ­­­­­

The contribution rates for Blacktown City Council are set out in the table below, noting these contribution rates will be updated on a regular basis to reflect current land and floorspace values.

This equates to a contribution from a land developer at subdivision stage of $10,500 per 500 sqm residential lot.

Or for a developer submitting a DA for a residential flat building, the payment would be $10,200 per apartment based on an average 100sqm (GFA) apartment.

A detailed draft Distribution Plan is being exhibited and supports the draft scheme. This sets out the process for the delivery of affordable housing, with an approach that minimised the administration and costs for each Council.  

Key elements of the draft Distribution Plan are:

• Affordable rental housing will be for very low, low, moderate-income households, and be provided at below private market rental levels 
• Partnership proposed with Homes NSW (who already commission affordable housing for a number of Councils in NSW) to enable the effective and efficient management of contributions and commissioning of affordable rental housing, in accordance with the distribution plan. 
• Delivery by the expert Not for Profit (NFP) housing providers, including registered community housing providers. Housing providers will own, manage and renew dwellings as affordable rental housing in perpetuity.
• The scheme leverages Commonwealth government affordable housing financing and housing provider land assets to increase affordable rental housing supply, and 
• An option for Councils, should they choose, to allocate funding with adjoining LGAs to increase scale and flexibility for delivery of affordable housing 

It is proposed that housing delivery would be with Not for Profit (NFP) (community and government) housing providers, and ownership would be transferred to the NFP provider (so that local councils are not taking-on housing asset management responsibilities and costs. There will be a requirement that the affordable rental housing be provided in perpetuity (noting some flexibility in renewal and redevelopment of stock in the long term with retention of the same amount of affordable housing). Transferring asset ownership also allows for the community housing providers to seek additional low-cost financial support from the Commonwealth Government to part-finance projects.