Legal Insights

Proposed Housing SEPP: Delivering more diverse and affordable housing types in NSW?

By Blake Dyer & David Le

• 26 August 2021 • 4 min read

The New South Wales Department of Planning, Industry and Environment (Department) is developing a new Housing State Environmental Planning Policy (Housing SEPP), which is expected to come into force in October 2021. The Housing SEPP is intended to allow for the delivery of more affordable and diverse forms of housing.

Phase three roll-out

The Housing SEPP is part of a wider package of proposed amendments aimed at reforming policies for housing. The four proposed phases of delivering this reform are as follows:

  • Phase one – December 2020: Changes were made to housing policies to allow for the delivery of social and affordable housing by the Land and Housing Corporation, and changes were made to the size of secondary dwellings in rural zones and the State Environmental Planning Policy (Affordable Rental Housing) 2009 (ARHSEPP).
  • Phase two – February 2021: Amendments were made to various State Environment Planning Policies (SEPPs) and the Environmental Planning and Assessment Regulation 2020 to introduce the concept of build-to-rent housing into the NSW planning framework.
  • Phase three – October 2021 (forecasted): Finalisation of the Housing SEPP.
  • Phase four – TBC: Further provisions made for caravan parks and manufactured home estates.

Consolidation of existing SEPPs into the Housing SEPP

The Housing SEPP will consolidate the following existing State Environmental Planning Policies into one SEPP:

  • State Environmental Planning Policy (Affordable Rental Housing) 2009 (ARHSEPP)
  • State Environmental Planning Policy (Housing for Seniors and People with a Disability) 2004 (Seniors SEPP)
  • State Environmental Planning Policy No 70 – Affordable Housing (Revised Schemes) (SEPP 70)
  • State Environmental Planning Policy No 21—Caravan Parks
  • State Environmental Planning Policy No 36—Manufactured Home Estates.

The proposed Housing SEPP is divided into three chapters:

  • Chapter 1 – Preliminary.
  • Chapter 2 – Affordable housing.
  • Chapter 3 – Diverse housing.

Affordable housing

The affordable housing provisions are targeted at addressing housing inequality among the following sub-categories:

  • in-fill affordable housing
  • boarding houses
  • boarding houses – Land and Housing Corporation
  • supportive accommodation
  • residential flat buildings – social housing providers, public authorities and joint ventures.

Some notable provisions for affordable housing include:

  • Affordable housing component for in-fill housing must be used for affordable housing for 15 years.
  • No boarding houses within R2 zoning except where they are locating in an accessible area of Greater Sydney or within 400 metres walking distance of land with B2 or B4 zoning elsewhere.

Diverse housing

Meanwhile, the diverse housing provisions are targeted at encouraging the development of a greater diversity of housing types, categorised as follows:

  • secondary dwellings
  • group homes
  • co-living housing
  • seniors housing.

Some notable provisions in respect of diverse housing include:

  • The introduction of new provisions for co-living houses. These are known as ‘new generation’ boarding houses which share features with traditional boarding houses, but are more like studio apartments. Development consent is required for co-living houses, other than for land zoned R2. The draft Housing SEPP has set standards for this housing type such as a minimum private room area of 12 m2 for single occupants or otherwise 16 m2.
  • Maximum floor area of 60 m2 for secondary dwellings, excluding an attached ancillary structure, unless another environmental planning instrument allows otherwise.
  • Restrictions for senior housing on land in Greater Sydney if an environmental planning instrument identifies the land as being within a heritage conservation area and land in a metropolitan rural area exclusion zone.

Future outlook

The proposed Housing SEPP is open for feedback on the NSW Planning Portal until 29 August 2021. The Housing SEPP is intended to be finalised by October 2021, and we expect a high volume of submissions which would reasonably alter the final form of the Housing SEPP.

It is expected that provisions on short-term rentals will be included in the Housing SEPP, and are due to take effect on 1 November 2021. The Department will also be reviewing the framework for caravan parks, camping grounds and manufactured home estates. It is expected that this review will be undertaken 24 months after the Housing SEPP is introduced.

Require further information on the Proposed Housing SEPP?

Get in touch with our Planning & Environment team for further assistance.

By Blake Dyer & David Le

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