Karen Trainor
Partner •
Brisbane
New Affordable Housing Criteria for Queensland: Draft Criteria Released
2 minutes
The Economic Development and Other Legislation Amendment Act 2024 (the EDOLA Act) has been passed and will commence on 1 July 2024. The EDOLA Act creates a head of power for the Minister for Economic Development Queensland (MEDQ) to require developers to provide social housing, affordable housing or the payment of a monetary contribution when developing land in a priority development area (PDA), in line with the development scheme. Affordable housing will be defined as "housing that is affordable to particular types of households under criteria prescribed by regulation for the particular type of household."
The Draft Economic Development (Affordable Housing Criteria) Amendment Regulation 2024 proposes to amend the Economic Development Regulation 2023 to add the terms and criteria set out in the table below. A housing needs analysis will inform what is affordable for a PDA. No detail has been provided yet as to which PDAs will be targeted to undergo a housing needs analysis:
Key terms
Proposed affordable housing criteria
Non-market housing affordable to low to moderate income households
1. Housing provided by a registered provider under the Housing Act 2003 to a household in the low to moderate income range at an affordable rent.
2. Housing provided as part of a programme, funded by any of the below entities to support the provision of affordable housing for households in the low to moderate income range:
- a public sector entity under section 8 of the Public Sector Act 2022;
- a local government;
- the State; or
- the Commonwealth.
3. Housing that is provided for rent to a household in the low to moderate income range at a price no greater than 74.9% of the market rent for the housing.
Market housing affordable to low to moderate income households
4. Housing which has a market value that is affordable to purchase by households in the low to moderate income range.
5. Housing which has a market value no more than 20 times greater than the affordable rent for households in the low to moderate income range.
6. Housing that has a market value that is no greater than the affordable rent for households in the income range for first home buyers or key workers as determined by a housing needs analysis.
Market housing affordable to first home buyers and key workers
7. Housing which has a market value that is affordable to purchase by households in the income range for first home buyers or key workers as determined by a housing needs analysis.
8. Housing which has a market value that is affordable to rent by households in the income range for key worker households as determined by a housing needs analysis.
Key Definitions
- Low to moderate income range means an annual income of more than 50% and less than 120% of the median household income for the relevant local government area as published by the Australian Bureau of Statistics for the most recent census year.
- Affordable rent means a rental payment that does not exceed 30% of gross income for the household.
- Affordable to purchase means a mortgage payment not exceeding 30% of gross income for the household.
- Market value means the estimated amount for which the housing should exchange on the open market between a willing buyer and seller in an arm's length transaction, after proper marketing, and where parties each acted knowledgeably, prudently and without corruption.
- Market rent means the estimated amount for which an interest in the housing should be leased on the open market between a willing lessor and lessee on appropriate lease terms in an arm's length transaction, after proper marketing, and where parties each acted knowledgeably, prudently and without corruption.
- Housing needs analysis means the document of the same name published on the MEDQ's website for the relevant area in which housing is located.
What to consider
Affordable housing conditions will soon be able to be imposed on PDA development approvals. The criteria which make housing "affordable housing" could have significant ramifications for development outcomes. EDQ is currently seeking feedback on the affordable housing criteria. Submissions can be made here until 5 July 2024.
Disclaimer
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.