A national approach to Mandatory Inclusionary Zoning

The Framework should set a uniform minimum contribution requirement that will consistently and equitably deliver the benefits of MIZ.

• 10% of residential floor space dedicated as affordable housing, in all developments on privately owned land that generate more than two new homes — a flat rate, known in advance and factored into development costs.
• Applied in all metropolitan areas and major regional centres experiencing rapid growth, where land costs comprise a larger share of development costs and affordable rental homes are most needed.
• Affordable rental homes generated through MIZ are retained in perpetuity, so the public benefit continues over the longer term.

Planning legislation sits with individual states and territories. Each jurisdiction develops its own legislative amendments to embed MIZ, as committed through the Framework, into its planning system.

The Framework establishes what counts as an accepted contribution, and consistent principles for transferring or dedicating it to government. Three practical methods can be used separately or in combination:

• Completed homes — best suited when contributions are integrated into larger developments, in terms of construction and timing.
• Money — best suited for smaller sites, or where a contribution includes a "partial" dwelling.
• Developable land — best suited for larger precincts, where community housing organisations can take ownership of developing the affordable component separately from market housing.

The Framework also sets consistent principles for determining equivalent contributions, specifying dwelling mix, matching contributions with community housing partners, timing of transfer, and collection and distribution of funds.

The Framework builds a national picture of the number and location of affordable homes expected and actually delivered through MIZ over time — providing transparency, and a resource for planning and funding the supply of affordable homes that MIZ needs to be supplemented with.

• Planning data — demographic forecasts of anticipated need at the local government level, and which community housing organisations have capacity and a footprint in each area.
• Monitoring data — tracking what is delivered, and identifying issues in implementation.
• Evaluation data — assessing overall effectiveness: numbers and types of dwellings, geographic distribution and ongoing unmet demand.

The national picture is built up from local government plans, at a minimum annually and at local government scale, supported by consistent data standards and templates.

A carefully staged, nationally consistent implementation timeline maximises the benefits of MIZ while minimising market disruption. A four-phase process gives the market enough forward notice to adjust:

• Development phase (up to the passing of legislation) — legislative amendments and operating guidelines are developed, with early notice of requirements and timeframe.
• Notice phase (2 years, no MIZ contributions) — landowners can make an informed choice about currently owned land.
• Transition phase (4 years, partial contributions, e.g. 5%) — allows land value appreciation over time and gives stakeholders time to build systems.
• Operation phase (ongoing, full contributions) — with ongoing planning, monitoring and review.

Developments that reach development-application stage before transition or operation begins follow the requirements in place at lodgement — ensuring no interruption to the existing housing supply pipeline.

• Australian Government — endorses the national Framework, integrates MIZ into national housing strategy, funds education and capacity building, and monitors the national picture of outcomes.
• States and territories — accountable for MIZ delivery in their jurisdiction, pass supporting legislation, work with local councils on plans and outcome measures, and report on delivery.
• Local councils — develop local plans for MIZ contributions, assess and approve developments with regard to agreed contributions, and monitor and report outcomes.
• Industry peaks — support education and capacity building across their membership.
• Developers — continue developing homes as usual, incorporating MIZ transfer mechanisms into business as usual.
• Community housing organisations — continue delivering well-designed, well-built affordable homes, incorporating MIZ transfer and distribution mechanisms into business as usual.