No power, no payment: affordable housing contribution condition struck out

What has happened?

In Hanave Pty Ltd v Waverley Council [2025] NSWLEC 19, the Land and Environment Court declared invalid a condition requiring a developer in Bondi to pay an affordable housing contribution. The Court held that the condition could be severed, so the rest of the development consent remained in force.

Context

The Waverley Local Planning Panel granted consent for development affecting a building used for affordable rental housing. The consent included a condition (condition 10) requiring a monetary contribution to offset the loss of affordable housing.

Under ss 4.17(1)(h) and 7.32 of the Environmental Planning and Assessment Act 1979 (EPA Act), a consent authority can only impose an affordable housing contribution condition if an environmental planning instrument authorises it. The Waverley LEP contained no such provision. The Council relied instead on a transitional clause (cl 15A) in the 2017 savings and transitional regulation.

The decision

Justice Pritchard held that:

  • cl 15A was validly made, but on its proper construction it operated only "until" the commencement of the relevant part of the Act. When the earlier amending legislation was repealed in March 2018, cl 15A had no further work to do;

  • without authorisation in the Waverley LEP, the Panel had no power to impose the condition, so it was invalid; and

  • the condition could be severed. Unlike conditions designed to mitigate impacts before construction, removing a monetary contribution did not change how the rest of the consent would operate. The consent remained for the same development.

The respondents were ordered to pay the developer's costs.

How will this affect you?

  • Affordable housing contribution conditions must be authorised by an environmental planning instrument, usually the LEP. Developers should check the source of power for any such condition.

  • Invalid monetary conditions may be severable, leaving the rest of the consent intact.

  • Strict time limits apply to challenges to development consents. Act promptly if a condition appears to lack a lawful basis.

Further information

For further information please contact Darren Bick, Director, on +61 416 167 556 or darren.bick@bicksteele.com.au.