Key points

• Stage 2 of the Low and Mid-Rise Housing Policy commenced on 28 February 2025.
• The Policy enables low and mid-rise housing developments in residential zones (R1, R2, R3 and R4) within 800 metres of nominated town centres and transport hubs.
• Certain land is excluded from the Policy including land that is at high risk from natural hazards or that contains heritage items. 

Introduction

The NSW Government has introduced another housing policy, through the introduction of Stage 2 of the Low and Mid-Rise Housing Policy (Policy). This Policy seeks to increase housing supply across nominated well-located areas within the Greater Sydney, Central Coast, Lower Hunter and Newcastle and Illawarra-Shoalhaven regions.

Stage 1 of the Policy started on 1 July 2024, which permitted dual occupancies and semi-detached homes in the R2 zone across NSW (with some exclusions - see the changes here).

Stage 2 of the Policy, which came into effect on 28 February 2025, made further changes to the State Environmental Planning Policy (Housing) 2021 (Housing SEPP), to encourage low and mid-rise housing developments within 800 metres of nominated town centres and transport hubs.

The Policy introduced changes to permissibility and development standards for dual occupancies, multi-dwelling housing, terraces, residential flat buildings and shop top housing.

The Policy does not change the consent authority for development applications (which is usually the local council).

Where does the Policy apply?

The Policy applies to residentially zoned land within 800 metres walking distance of 171 nominated town centres or transport hubs, which have been selected based on:

• Access to shops, services and amenities;
• Frequency and travel times of public transport;
• Infrastructure capacity; and
• Hazards and constraints.

The land to which the Policy applies is not mapped. Rather, the area to which the Policy applies is defined as land within 400m or 800m “walking distance” of a nominated town centre, the public entrance to a nominated railway, metro or light rail station or, for a nominated light rail station with no public entrance, the platform of the light rail station.

Walking distance is defined in Schedule 10 of the Housing SEPP as “the shortest distance between 2 points measured along a route that may be safely walked by a pedestrian using, as far as reasonably practicable, public footpaths and pedestrian crossings”.

The nominated town centres are those identified on the “Town Centres Map”, which we expect will be shortly available on the Planning Portal. The nominated rail, metro and light rail stations are those listed in Schedule 11 of the Policy. However, certain land with these areas is excluded from the Policy including:

• Bushfire prone land;
• Land within Australian Noise Exposure Forecast or Australian Noise Exposure Concept contour of 20 or greater;
• Flood prone land within identified catchments;
• Coastal wetland, littoral rainforest and coastal vulnerability areas;
• Transport Oriented Development areas and deferred Transport Orientated Development areas;
• Heritage items;
• Identified land within proximity to the Botany Industrial Park;
• Land within the Bathurst, Blue Mountains, Hawkesbury, and Wollondilly Local Government Areas;
• Land within 200 metres of certain pipelines; and
• Land within 800 metres of a public entrance of the deferred Transport Oriented Development stations identified in Schedule 12 of the Policy.

A copy of the legislative instrument setting out the details of the Policy is available here.

What is the effect of the Policy?

The Policy amends the Housing SEPP to introduce permissibility changes and non-discretionary development standards for low and mid-rise housing developments.

The permissibility changes allow dual occupancies, semi-detached dwellings, multi-dwelling housing and attached dwellings in R2 zones and residential flat buildings in R2 and R3 zones.

The non-discretionary development standards introduced by this Policy are summarised below:

Low-rise Housing

Mid-rise Housing
Residential flat buildings: +3 apartments in +2 storey building

Mid-rise Housing
Shop-top housing: +1 apartments above ground floor shops 

The development standards identified by a “*” in the above table are not non-discretionary development standards (discussed below). Rather, they are development standards which state that the consent authority “must not grant development consent” if the standard is not complied with (although a cl 4.6 objection may be available).

In addition, before granting development consent to dual occupancies, multi dwelling housing or multi dwelling housing (terraces) in the R1, R2, R3 or R4 zone or residential flat buildings or shop top housing in the R3 or R4 zone on land to which the Policy applies, the consent authority must consider the new Tree Canopy Guide for Low and Mid Rise Housing. It remains to be seen if this will limit the opportunities for low and mid-rise housing consistent with the Policy.

What are non-discretionary development standards?

A non-discretionary development standard is a development standard that restricts the discretion of a consent authority.

If a non-discretionary development standard is complied with, the consent authority:

• is not entitled to take that standard into further consideration in determining the development application;
• must not refuse the application on the ground that the development does not comply with that standard; and
• must not impose a condition of consent that has the same, or substantially the same, effect as that standard, but is more onerous.

If the proposed development does not comply with a non-discretionary development standard, these restrictions on the consent authority’s discretion do not apply and the authority may refuse the application or approve the application (although a clause 4.6 objection may be required).

What this means for you

If your property is located within 800 metres walking distance of the 171 nominated town centres or transport hubs, your land may be capable of being developed to take advantage of the increased density under the new planning controls.

The Policy may open up opportunities for landowners and developers. Dentons’ planning and real estate teams have been advising clients on planning, heritage, collective sales and acquisitions matters under NSW Government housing policies. Our experienced teams are uniquely placed to assist you.

If you would like advice, please contact us.