Commercially motivated ‘Boarding House’ DA application Loophole must be fixed

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Commercially motivated ‘Boarding House’ DA application Loophole must be fixed

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NSW Affordable Rental Housing Legislation

Commercially motivated ‘Boarding House’ DA application Loophole must be fixed

City of Sydney outlines development guidelines for Boarding Houses (including Student Accommodation) in the brochure ‘Guidelines_BoardingHouses_DCP2012’.This document describes the State Environmental Planning Policy (Affordable Rental Housing) 2009 as a State Government initiative that assists in the provision of affordable housing near employment areas as a way to provide a means to retain and provide low cost rental accommodation and social housing.

This letter outlines how for-profit commercial accommodation providers/developers are taking advantage of a loophole in the current Affordable Rental Housing legislation that allows for the creation of Student Accommodation stock under the guise of “boarding houses”. Completely in contrast to the social foundations of Affordable Housing legislation these operators are free to charge whatever they want to lodgers and regularly market these developments to international students.

A number of these new Student Accommodation assets are promoting ‘designer’ accommodation and come to market with a ‘designer’ price tag that is disadvantaging poorer students who will undoubtedly have to work more to afford such housing which in turn puts their studies in jeopardy.

The Affordable Rental Housing SEPP 2009 (AHSEPP) offers developers of new rental affordable housing developments incentives and bonuses in the form of:

  • Increased Allowable Floor Space. Most enticingly, they can be built 20 per cent bigger than planning limits specify for other housing types in a local area.
  • Reduced allowable apartment sizes compared to what is normally allowed for Commercial apartment blocks. AHSEPP 16sqm VS SEPP65 32sqm for Studio Apartment.
  • Reduced Open Space requirements.
  • Reduced Private Open Space requirements.
  • Reduced Car Parking requirements.
  • Reduced Solar Access provisions.
  • AND amongst others a provision that states the consenting local council must not refuse consent to an application that adheres to all the Controls set out in Part 2 Division 3 of the AHSEPP.

Whilst these provisions are valuable in making it easier for non-profit/community housing providers to create rental housing stock for those actually in need of Affordable Housing it is disgraceful that commercial developers can exploit these laxed planning controls and then not be subject to any restriction on rent charges compared to their community housing provider counterparts who must (acting under Part 2 Division 1 of the AHSEPP) set rents at around 75% of current Market Value.

One such student ‘boarding house’ development in Wilson Street, Darlington (currently in DA application with submissions closing Friday 18 November 2016) is a 231 room 5 Storey student accommodation residence proposed by a UK based student housing developer company. The company, who to date has targeted the luxury student accommodation market recently moved into the Australian market acquiring land in Melbourne and Brisbane totaling over 100 million dollars. The company’s Australian capital partner describes the growing asset class (student accommodation) as having “high foot traffic, very good returns and very positive yields.” They is now adding two more properties to thier portfolio in Darlington, Sydney.

It is clear that companies like this are using this loophole for their own benefit with no care for a socially responsible outcome that would provide rental stock to assist in NSW’s affordable housing crisis.


Amendments are required in the current legislation to put a stop to this blatant abuse of social policy.

Without claiming to be articulate in legislative phrasing I suggest the following amendments to the AHSEPP:

State Environmental Planning Policy (Affordable Rental Housing) 2009

Part 2 New Affordable Rental Housing

Division 3 Boarding Houses

  • 29. Standards that cannot be used to refuse consent

(6) If for Student Accommodation, a consent authority must not refuse consent to a development to which this division applies if the applicant can provide sufficient resources outlining subsidised lodging fees of:

(a)No more than 30% of the student’s gross weekly earnings, OR

(b)Lodging Fees set at at least 30% off the median rental prices in the area for a similar space AND

(c)Outlining inclusive lodging charges of Electricity, Internet Data and Water.

  • 30B. Standards of Social Affordability

(1) Applicant must show proof of consultation with

(a) a social housing provider OR

(b) a local housing agency

OR to avoid confusion between the distinction of Boarding Houses and Student Accommodation the creation a new Division within the AHSEPP specifically for Student Accommodation which would outline the aforementioned measures when used in relation to Section 4.4 of Sydney DCP 2012 and the Boarding House Guidelines DCP 2012.



Affordable Rental Housing SEPP

Sydney DCP 2012

Boarding House Guidelines DCP 2012

SUPRA – Submission for the Parliament of Australia Inquiry into Affordable Housing, March 2014

The growth of student accommodation as an asset class in Australia

Students-refuse-give-accommodation-award-rent-high- Nov 2016

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