An affordable housing incentive will send a nine-storey apartment plan in one of Sydney’s most expensive harbourside markets to a regional panel instead of the North Sydney Council.

The $33.8-million proposal for 14-16 McDougall Street at Kirribilli would replace 12 units across two three-storey apartment buildings, with 30 apartments. Five are to be retained as affordable housing.

Plans lodged for C & B Capital identify the site as “inner area” under Low and Medium Rise (LMR) Housing SEPP provisions, unlocking a 30 per cent height increase to 28.6m when more than 15 per cent of floor area is affordable.