NSW Government’s New Low & Mid-Rise Housing Policy: What It Means for Developments Within 800m of Town Centres

Introduction

The NSW Government has introduced a new Low & Mid-Rise Housing Policy designed to boost housing supply and affordability.

A key feature of this policy is its focus on areas within 800 metres of town centres, where planning regulations will be streamlined to encourage medium-density housing solutions.

This change has significant implications for property owners, developers, and those looking to build granny flats or dual occupancies.

What Does the 800m Rule Mean ?

The 800-metre radius from town centres has been designated as a priority zone for medium-density developments. This means that within this zone:

• Faster Approvals: Development applications (DAs) for townhouses, terraces, duplexes, and granny flats are expected to be processed more efficiently.
• Increased Housing Options: More types of homes, including small apartment buildings and dual occupancies, will be permitted.
• Infrastructure Considerations: These areas are typically well-serviced by public transport, shops, and essential services, making them ideal for increased density.
• Height & Density Adjustments: Certain height and floor space ratio (FSR) restrictions may be relaxed to accommodate more dwellings on existing lots.

Impact on Granny Flats & Affordable Housing

For homeowners and investors, the policy presents new opportunities:

• Easier Granny Flat Approvals: Those within 800m of a town centre may find it simpler to gain approval for secondary dwellings (granny flats), helping to address housing shortages.
• Higher Yield for Investors: More flexible planning rules may allow for increased rental income through dual occupancies or small-scale multi-unit developments.
• Increased Property Value: Land within the 800m zone could see increased demand as developers and investors look to capitalize on the relaxed zoning restrictions.

Potential Challenges

While the new policy aims to streamline housing development, some challenges remain:

• Community Pushback: Some residents may oppose increased density due to concerns about congestion, parking, and infrastructure strain.
• Zoning Adjustments & Council Approvals: Local councils will still have a role in interpreting and implementing the policy, which may lead to variations in approvals across different LGAs.
• Construction Costs & Feasibility: While regulations may be eased, rising construction costs and material shortages could impact project viability.

Low and Mid-Rise policy to unlock 112,000 homes in five years

This is the bold claim by the NSW Government. Is this likely to happen ? We certainly hope so, but geez ! sounds a lot like the little brother to the Albanese Federal Government’s plan to build 1.2 mil new homes in 5 years. It’s 3 years now without any new homes built and the clock is ticking… tik tok…the clock is ticking.

Conclusion

The NSW Government’s Low & Mid-Rise Housing Policy represents a major shift in how housing is developed, particularly within 800m of town centres.

With streamlined approvals and increased density allowances, property owners have new opportunities to build granny flats, duplexes, and townhouses in well-connected areas.

However, navigating zoning changes and council regulations will be key to making the most of these new opportunities. If you’re considering a granny flat or small-scale development, now is the time to explore your options and stay informed on how this policy evolves.