Property developers across the Greater Sydney area may be forced to hand over up to ten percent of their dwellings on new housing or apartment construction projects to community housing providers under a new plan to address housing affordability concerns across the region.

Unveiling the plan as part of its draft 40-year vision for the Greater Sydney metropolitan area, the Greater Sydney Commission has proposed that dwellings which occupy between five and ten percent of floor space in new areas which are approved for development will be set aside and given to community housing providers who will then use the space to provide affordable rental housing to households earning less than $67,000 per year.

According to the Commission’s proposals, the draft rules will apply to all new floor space (above the existing permissible floor space) on any greenfield or urban renewal precincts within areas that have been shown to have a current or future need for affordable rental housing.

The dwellings, which will need to include a mixture of one, two and three bedroom homes, will be secured by the relevant planning authority and passed on to a community housing provider to manage and be rented out to those on low and modest incomes.

In its plan, the Commission said that the Greater Sydney housing market is recognised as one of the least affordable markets in the world.

In its most recent Rental Affordability Index, for example, SGS Economics and Planning found that rental affordability within the Greater Sydney region was extremely low, with even average income household having to fork out 28 percent of their income for rent and very few affordable rental properties being available for those on modest incomes except for areas west of Parramatta.

Community housing providers welcomed the idea.

Wendy Hayhurst from the NSW Federation of Housing Associations said the new targets would help ensure that the whole community benefited from the windfalls which are created when land is rezoned through public investment and government policies rather than simply the development sector.

“This is good news for the thousands of low income workers and families who are being forced further and further out of our city by the cost of rents and house prices,” Hayhurst said.

But Urban Taskforce chief executive officer Chris Johnson said slammed the idea, saying that the new proposal would increase the cost of all new housing as costs associated with giving up to ten percent of dwellings away will need to be recouped across the remainder of the homes.

Instead, he proposes an alternative whereby new projects be given bonuses of 20 percent extra floor space provided that this was used for affordable housing.

“The plans use a false logic that by requiring developers to provide up to ten percent of new housing as affordable this will help with Sydney’s rapidly escalating house prices,” Johnson said.

“Clearly the cost of giving away ten percent of new homes will have to be distributed across the other 90 percent of new homes therefore forcing house prices up.”