Housing SEPP Amendment: Promoting Low and Mid-Rise Housing in Prime Locations

In line with the National Housing Accord and following public consultation on low- and mid-rise housing reforms exhibited from December 15, 2023, to February 23, 2024, the NSW Government has announced amendments to the State Environmental Planning Policy (Housing) 2021.

These reforms aim to boost the availability of low-rise and mid-rise housing (3-6 storeys) in strategically chosen areas—specifically town center precincts close to public transport, shops, supermarkets, services, and amenities. The initiative seeks to give more people the chance to live near their workplaces and other frequently visited locations. Feedback from communities and councils highlighted concerns about traffic, congestion, preserving local character, and ensuring adequate infrastructure and green spaces. In response, the government has outlined exclusions to safeguard heritage sites and restrict the policy in areas prone to hazards or with evacuation challenges.

The policy will be implemented in stages, with Stage 1 effective today. Over the next five years, the reforms are projected to deliver 112,000 additional homes, contributing significantly toward the National Housing Accord’s target of 377,000 homes by July 2029.

Exclusions to Low- and Mid-Rise Housing Reforms

The policy, which took effect on July 1, 2024, does not apply to certain sensitive areas, including:

• Land with evacuation difficulties or high susceptibility to hazards such as flooding or bushfires (e.g., Hawkesbury, Blue Mountains, Wollondilly LGAs).

• Environmentally sensitive areas like coastal wetlands, littoral rainforests, or regions vulnerable to coastal changes.

• The Bathurst LGA, where suitable R2-zoned land is unavailable.

• Land near dangerous goods pipelines or areas experiencing significant aircraft noise.

• Heritage-listed land or areas containing heritage items.

• Transport-Oriented Development Areas, as defined in Chapter 5 of the Housing SEPP.

Stage 2, commencing later in 2024, will expand these exclusions to include land near the Botany Industrial Park. Detailed information on exclusions is available in the Policy Exclusions Fact Sheet.

Stage 1 Changes

As of July 1, 2024, dual occupancies and semi-detached homes are now permitted in all R2 low-density residential zones across NSW. However, in areas where dual occupancies are newly allowed, the complying development approval process will only be introduced in Stage 2, allowing councils time to adapt to the changes.

The affected councils—Albury, Ballina, Cowra, Hornsby, Inner West, Ku-ring-gai, Lismore, Liverpool, Mosman, Murray River, Northern Beaches (Warringah LEP), Strathfield, and Tamworth—have until July 1, 2025, to establish controls such as minimum lot sizes. Councils with existing complying development pathways remain unaffected by these changes.

Stage 2 Changes

Stage 2, slated for late 2024, will include additional updates to encourage housing diversity and density in strategically identified areas near transport hubs and town centers. Key measures include:

• Mapping "well-located areas" within an 800-meter walking radius of transport hubs and town centers in Sydney, Central Coast, Illawarra, and Hunter regions under the Housing SEPP.

• Permitting additional housing types in identified precincts:

  • Multi-dwelling housing (e.g., terraces and townhouses) in R1, R2, and R3 zones.

  • Low-rise apartments in R1 and R2 zones.

  • Mid-rise apartments in R3 and R4 zones.

• Introducing non-refusal standards to streamline approvals for dual occupancies, multi-dwelling housing, and low- and mid-rise apartments in well-located areas. These standards will cover building heights, floor space ratios, and minimum lot sizes.

• Excluding certain employment zones (E1, E2, MU1, and SP5), heritage sites, and land near the Botany Industrial Park.

Exclusions outlined in Stage 1 will remain in place.

Introducing Non-Refusal Standards

Non-refusal standards are uniform planning controls designed to simplify development approvals. These standards override local provisions, ensuring applications meeting the criteria cannot be declined based on local environmental plans (LEPs) or development control plans (DCPs). However, if an LEP or DCP is more permissive, it will take precedence.

The rollout of non-refusal standards in Stage 2 will further expand opportunities for low- and mid-rise housing, particularly in areas previously restricted. By establishing consistent criteria, the reforms aim to streamline processes, promote housing diversity, and meet NSW’s growing demand for well-located, sustainable homes.