The Greater Sydney Commission, headed by Lucy Turnbull, will create a unified approach to developing affordable housing if new plans are approved.

New 'district plans' will require that land rezoned for higher density will allocate 5-10% of the extra floor space to low-income housing, according to a report in the Sydney Morning Herald today.

The district plans will be released next month by the Greater Sydney Commission, and will be reviewed throughout 2017. It's hoped the plans will be in place for major developments, including Olympic Park and White Bay.

A spokesperson for the Commission told The Sydney Morning Herald, "We are aware of the need to increase the supply of affordable housing for low and very low income households. We need strategic planning that will achieve this, at the same time as promoting greater overall affordability."

The proposal is likely to be welcomed by community housing groups, but developers are expected to seek incentives.

Wendy Hayhurst, chief executive of the NSW Federation of Housing Associations, told The Sydney Morning Herald, "If that is the case, that is a real step change in Sydney."

The proposal will apply to public and private development, and is intended for people moving out of government housing or those saving to buy on the private market.

New York has an affordably housing target of up to 50 per cent of new projects, though they receive greater tax concessions than in Australia.

Councils can currently stipulate for affordable housing targets, but every council has its own policy. The proposed change is intended to create a unified approach.

See also:

Lucy Turnbull speaks of her vision for Sydney

Real action needed to address housing affordability

Australians want action on housing affordability