More affordable housing on its way in NSW under new Housing SEPP

By Stan Kondilios and Bridget Clarebrough

The NSW Government is seeking to consolidate five existing housing-related state environmental planning policies through the introduction of the State Environmental Planning Policy (Housing) 2021 (NSW) (the New Housing SEPP). The New Housing SEPP is currently on public exhibition until 29 August 2021 and is phase three of the government’s four-phase plan to deliver more diverse and affordable housing by providing a range of housing types to meet the changing needs of people across the state.

Phase one occurred on 18 December 2020 through changes to the State Environmental Planning Policy (Affordable Rental Housing) 2009 (NSW) to facilitate the delivery of social and affordable housing by the Land and Housing Corporation (LAHC).

Phase two commenced in February 2021 introducing new provisions pertaining to build-to-rent housing, which comprises of large-scale, purpose-built rental housing that is held in single ownership and professionally managed. These changes include the permissibility of built-to-rent housing in residential flat building areas, B3 Commercial Core, B4 Mixed Use zones and B8 Metropolitan Centre zones.

Phase three will be delivered through the consolidation of the following five existing housing-related State Environmental Planning Policies (SEPPs):

• 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; and
• State Environmental Planning Policy No 36—Manufactured Home Estates,

to create the New Housing SEPP.

Phase four will involve the inclusion of caravan park and manufactured home estate provisions within the New Housing SEPP.

The New Housing SEPP

SEPPs are environmental planning instruments that legislate development on a state-wide basis. SEPPs provide details of what use may be made of land, through dictating the permissibility and standards of certain types of developments. The New Housing SEPP is divided into two broad categories, affordable housing and diverse housing.

Affordable housing includes:

• in-fill housing;
• boarding houses (including boarding houses managed by the LAHC),
• supportive accommodation; and
• residential flat building carried out by social housing providers, public authorities and joint ventures.

Diverse housing covers:

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

Introduction of co-living

The New Housing SEPP introduces a new category of residential accommodation, co-living housing. Co-living houses include buildings or places that:

1. have at least six private rooms, some or all of which may have private kitchen and bathroom facilities; and
2. provide occupants with a principal place of residence for at least three months; and
3. have shared facilities, such as a communal living room, bathroom, kitchen or laundry, maintained by a managing agent, who provides management services 24 hours a day,

but does not include backpackers’ accommodation, a boarding house, a group home, hotel or motel accommodation, seniors housing or a serviced apartment. Co-living housing will be granted consent in zones in which residential flat building or shop top housing is permitted, however, will not be permissible in R2 Low Density Residential areas.

The New Housing SEPP imposes eleven non-discretionary development standards and ten standards for co-living housing that relate to floor space, solar access, communal spaces, landscaping and parking requirements.

Most notably, each private room must have a gross floor area of at least 12 metres squared for singe occupants or 16 metres squared for dual occupants. The development must also contain an appropriate workspace for the manager and if the housing exceeds three storeys, it must comply with the minimum building separation distances specified in the Apartment Design Guide.

Updating existing provisions

The New Hosing SEPP updates a range of provisions within both categories of affordable housing and diverse housing. Further, includes eight affordable housing principles within Schedule 1, in which consent authorities must have regarding to before imposing a condition.

In-fill housing

For in-fill housing developments the Apartment Design Guide is to be applied to each apartment that for the purpose of a residential flat building and the Low Rise Housing Diversity Design Guide is to be applied to developments of dual occupancy, manor houses or multi dwelling terraces. If the developments do not fall within the scope of the above, section 17 of the New Housing SEPP specifies the minimum floor areas for single, double and three bedroom developments. Under the New Housing SEPP the period of which the development must be used as affordable housing has been extended from 10 years to 15 years.

Boarding houses

Boarding houses will not no longer be permitted in R2 Low Residential Zones, rather will only be permitted if it is in an accessible area (for developments in Greater Sydney) or are within 400 metres walking distance of land in Zone B2 Local Centre or Zone B4 Mixed Use (for development outside of Greater Sydney). In addition, there is now a requirement for boarding houses to be affordable, as such each boarding house is to be managed by a registered community housing provider.

Seniors housing

The New Housing SEPP provides a comprehensive list prescribing permissible zones for seniors housing, in comparison to previous provisions providing consent to seniors housing in land zoned primarily for urban purposes and land adjoining land zoned primarily for urban purposes. The zones in which seniors housing is permissible includes:

1. Zone RU5 Village;
2. Zone R1 General Residential;
3. Zone R2 Low Density Residential;
4. Zone R3 Medium Density Residential;
5. Zone R4 High Density Residential;
6. Zone B1 Neighbourhood Centre;
7. Zone B2 Local Centre;
8. Zone B3 Commercial Core;
9. Zone B4 Mixed Use;
10. Zone B5 Business Development;
11. Zone B6 Enterprise Corridor;
12. Zone B7 Business Park;
13. Zone B8 Metropolitan Centre;
14. Zone SP1 Special Purposes;
15. Zone SP2 Infrastructure—Hospital; and
16. Zone RE2 Private Recreation.

Although the list is far reaching, the New Housing SEPP imposes a range of restrictions for which Part 4 does not apply, including heritage conservation or metropolitan rural areas in the Greater Sydney region, land that is identified under State Environmental Planning Policy (Coastal Management) 2018 and specific areas to which the Warringah Local Environmental Plan 2000 applies.  

The definition of seniors has been amended to now only include people over the age of 60, rather than previous scope of 55 years old and above. The definition still includes people who are residents at a residential care facility within the meaning of the Aged Care Act 1997 and people who have been assessed as being eligible to occupy housing for aged persons provided by a social housing provider. Further changes have been made through the removal of the ability to obtain a site compatibility certificate.

Division 3 of the New Housing SEPP categorises the development standards for seniors housing into various categories, consisting of general development standards, development standards for hostels and independent living units, development standards for seniors housing – Zones RE2, SP1, RU5 and R2, non-discretionary development standards and non-discretionary development standards for vertical villages. Most notably, senior housing will not be permitted to exceed:

1. nine metres if it is in a residential area;
2. two storeys if it is in a residential area and is adjacent to the boundary of the site area; and
3. 5 metres if the servicing equipment if fully integrated and covers no more than 20% of the surface area of the roof.

Secondary dwellings and group homes

The New Housing SEPP includes development standards for both secondary dwellings and group homes for flood affected lots and land near Siding Spring Observatory and specific development standards for bush fire prone land for secondary dwellings.

Further legislative amendments

In conjunction with the introduction of the New Housing SEPP, other acts have been amended to enliven the provisions of the New Housing SEPP. These include the Environmental Planning Assessment Amendment (Housing) Regulation 2021 (NSW) and Standard Instrument (Local Environmental Plans) Amendment (Miscellaneous) Order 2021 (NSW).

Please contact us if you require further assistance or advice on these proposed changes.