Development contributions for affordable housing: theory and implementation

Abstract

In Australia, the task of supplying social and affordable housing has generally been borne by broad-based tax systems operated by the Commonwealth and State Governments, rather than the planning or development assessment system.

Recent policy statements have indicated that in both NSW and Victoria, there is increased government support for supporting the supply of social and affordable housing through the planning system.

It is useful to consider the rationale for addressing the shortage of social and affordable housing in this way, and the implications for land and development economics.

This paper has two purposes: to provide a clear justification in planning and economic theory for affordable housing contributions, and to propose specific mechanisms by which affordable housing contributions can be efficiently and equitably generated via the planning and development assessment process.