Unlocking NSW’s Housing Future: Navigating the New Low & Mid-Rise Housing Policy
Sydney's housing landscape is about to undergo a significant transformation. The new Low and Mid-Rise Housing Policy will reshape neighbourhoods and create more diverse housing options for NSW residents. Here's what you need to know about these game-changing reforms.
The Low and Mid-Rise Housing Policy (the Policy) will be incorporated into the State Environmental Planning Policy (Housing) 2021,introducing changes to planning controls within 800 metres of well-located shops, services, and transport hubs. This policy aims to increase housing supply by allowing more low- and mid-rise housing options in key areas. Expected to deliver up to 112,000 new homes across NSW over the next five years, the policy is being implemented in two stages to gradually increase housing diversity.
The policy has been implemented over 2 stages:
Stage 1: Expanding Housing Options in R2 Zones was implemented on 1 July 2024. Stage 1 allowed dual occupancies and semi-detached homes to be permitted in all R2 low-density residential zones across NSW
Stage 2: Encouraging Low and Mid-Rise Housing to be implemented on 28 February 2025. Stage 2 expands housing types to include dual occupancies, multi dwelling housing, and low- to mid-rise apartments and introduces new development standards within low and mid-rise housing areas (LMA) across Sydney, Central Coast, Illawarra and Hunter regions
Let’s take a closer look at the Stage 2 Policy and is implications.
What Areas Are affected?
The Policy applies to 171 low- and mid-rise (LMR) areas - these are residential zones within 800mwalking distance from town centres and transport hubs in:
- Greater Sydney
- Central Coast
- Lower Hunter and Newcastle
- Illawarra-Shoalhaven
View the 171 designated LMR areas: [List of sites]
View the interactive map showing reach of the LMR areas: [Indicative map of local low and mid-rise housing areas]
What Are The Main Planning Changes?
We have set our below a summary of the key amendments to the Housing SEPP by the Policy:
Dual Occupancies
Dual occupancy developments on Lots in R1, R2, R3 and R4zones with a minimum lot size of 450m2 and a minimum lot width of 12m are permitted. The dwellings must have a maximum FSR of 0.65:1 and a maximum building height of 9.5m.
Lots in R1, R2 and R3 zones may be subdivided if the proposed lots have a minimum of 225m2 per lot and a minimum lot width of 6m.
Multi-Dwelling Housing
Development of 3 or more dwellings on Lots in R1, R2, R3 andR4 zones with a minimum lot size of 600m2 and a minimum lot width of 12m are permitted. The dwellings must have a maximum FSR of 0.7:1 and a maximum building height of 9.5m.
Multi-Dwelling Housing (Terraces)
Development of 3 or more terrace dwellings on Lots in R1,R2, R3 and R4 zones with a minimum lot size of 500m2 and a minimum lot width of18m are permitted. The terrace dwellings must have a maximum FSR of 0.7:1 and a maximum building height of 9.5m.
Lots in R1, R2 and R3 zones may be subdivided if the proposed lots have a minimum of 165m2 per lot and a minimum lot width of 6m.
Residential Flat Buildings
Residential Flat Buildings (RFB), being developments with 3or more apartments in a 2 or more-storey building, on Lots in R1 and R2 zones with a minimum lot size of 500m2 and a minimum lot width of 12m are permitted. The RFB must have a maximum FSR of 0.8:1 and a maximum building height of 9.5m.
RFB on Lots in R3 and R4 zones that are located within0-400m from a train/light rail station or town centre are permitted. The RFB must have a maximum FSR of 2.2:1, a maximum building height of 22m and a maximum of 6 storeys. No minimum lot size or lot width provisions apply to these lots.
RFB on Lots in R3 and R4 zones that are located within400-800m from a train/light rail station or town centre are permitted. The RFB must have a maximum FSR of 1.5:1, a maximum building height of 17.5m and a maximum of 4 storeys. No minimum lot size or lot width provisions apply to these lots.
Shop-Top Housing
Shop-top housing, being 1 or more apartments above ground floor shops, on Lots in R1 and R2 zones with a minimum lot size of 500m2 and a minimum lot width of 12m are permitted. The shop-top housing must have a maximum FSR of 0.8:1 and a maximum building height of 9.5m.
Shop-top housing on Lots in R3 and R4 zones that are located within 0-400m from a train/light rail station or town centre are permitted. The shop-top housing must have a maximum FSR of 2.2:1, a maximum building height of24m and a maximum of 6 storeys. No minimum lot size or lot width provisions apply to these lots.
Shop-top housing on Lots in R3 and R4 zones that are located within 400-800m from a train/light rail station or town centre are permitted. The shop-top housing must have a maximum FSR of 1.5:1, a maximum building height of 17.5m and a maximum of 4 storeys. No minimum lot size or lot width provisions apply to these lots.
For ease of reference, we have set out below a summary of these Planning Changes
What Exemptions are there?
The Stage Two Policy does NOT apply to:
- Heritage Items - it will not apply to land that comprises or contains a heritage item as listed in a local environmental plan or on the State Heritage Register. It does apply in heritage conservation areas.
- Environmental protection zones (e.g., national parks, sensitive ecosystems).
- Coastal Sensitive Locations.
- Proximity to Pipelines carrying hazardous materials - these are excluded to minimize risks associated with potential leaks or explosions.
- Flood-prone Regions.
- Bushfire-probe areas with high risk.
- Areas with Australian Noise Exposure Forecast (ANEF) Levels Above 20.
- Aboriginal Cultural Heritage Sites
These exclusions are designed to balance the need for increased housing diversity with the preservation of NSW's unique environmental and cultural heritage, as well as to ensure the safety and well-being of its residents.
To avoid overlap, these Policy amendments do not apply to land within a Transport Oriented Development (TOD) Program area, as identified by Chapter 5 of the Housing SEPP. As these Policy amendments and the TOD Program are based on similar principles of delivering housing in well-located areas, it is important to check which Housing SEPP provisions and amendments apply to certain land.
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Buyers need to be across these changes if looking to buy in LMR areas to understand how the planning changes will impact property value and future development potential/risk.
Property owners in LMR areas, will need to determine if your property is a prime target for developers. Understanding planning changes will help you maximize your potential property value and ensure you make informed decisions.
SydneySlice Buyers Agents can help you navigate this changing landscape; please reach out if you are looking to buy in an LMR area or if you currently own property in an LMR area.
