By Aaron Gadiel, Partner
The NSW Government has taken action to resolve some of the ambiguities in its ‘low and mid rise’ housing reforms introduced earlier this year. The Government has also taken steps to boost dual occupancy development and multi dwelling housing development.
The changes are set out in the misleadingly-named Mosman Local Environmental Plan Amendment (Exempt and Complying Development Codes and Housing—Dual Occupancies) 2025.
Despite the name of this legal instrument, changes are made across the whole state, and changes are made to both the:
This article briefly summarises some of the changes. It is not a replacement for legal advice.
In February this year, the NSW Government enacted a new Chapter 6 (‘Low and mid rise housing’) as part of the Housing SEPP.
Mills Oakley outlined the changes in our March article.
In that article, we explained that a ‘low and mid rise housing inner area’ is defined as any of the following:
The ‘low and mid rise housing outer area’ is defined as any of the following:
‘Walking distance’ has been defined to mean the shortest distance between two points. This distance must be measured along a route that may be safely walked by a pedestrian using, as far as reasonably practicable, public footpaths and pedestrian crossings.
We explained that the walking distances are not subject to any statutory mapping. That is, no statutory maps have been prepared that actually sets out the boundaries of the two ‘low and mid rise housing’ areas.
Our article highlighted that the new provisions did not expressly say what happens when only part of a development site is within the 400-metre or 800-metre walking distance.
This last problem has now been addressed.
It is now clear that a lot will now be included in a ‘low and mid rise housing’ area if part of a lot is on land that is within the nominated walking distance.
This means that a developer may consolidate several lots to form a single lot and potentially benefit from the scheme for ‘low and mid rise housing’ areas.
Lots can be consolidated without development consent. Nonethless the process cannot be reversed as easily, so developers need to be mindful of the exclusions from the ‘low and mid rise’ housing scheme. It would be sensible to obtain legal advice if you are considering lot consolidation as a strategy to secure the benefit of the ‘low and mid rise’ housing scheme’.
The NSW Government has resolved an ambiguity in the state-level provisions for subdivisions for dual occupancies.
As we explained above, in February this year, the NSW Government enacted a new chapter 6 of the Housing SEPP.
This new scheme includes a provision which made it possible to carry out development for the purposes of dual occupancies (on land to which chapter 6 applies), so long as that land was zoned ‘R2 Low Density Residential’ (section 166). This provision overrode conflicting provisions in local environmental plans.
However, it was not expressly stated that a subdivision for dual occupancies — where it was otherwise to be prohibited by a local environmental plan — was made permissible by this provision.
Some local councils have been using this ambiguity to claim that the Housing SEPP did not override their local environmental plans and make a subdivision for a dual occupancy in the R2 zone permissible.
This ambiguity has now been cleared up in any ‘low and mid rise housing area’, with a new provision (section 169(1A)) being inserted into the Housing SEPP that plainly overrides local environmental plans.
The new provision will assist, in ‘low and mid rise housing’ areas, the subdivision of dual occupancies in zones:
If:
a subdivision for a dual occupancy development that complies with listed requirements (set out in section 169 of the Housing SEPP) may nonetheless be the subject of a development consent.
You should be conscious that there are many areas of land that have been arbitrarily carved out of chapter 6 of the Housing SEPP (and so would not benefit from this new provision). Our article of March 2025 explains the carve-outs.
As with dual occupancies above, the new chapter 6 of the Housing SEPP also included an ambiguity as to whether multi dwelling housing could be subdivided in a ‘low and mid rise housing’ area in the ‘R2 Low Density Residential’ zone (when such subdivision was prohibited by a local environmental plan).
This new scheme included a provision which made it possible to carry out development for the purposes of multi dwelling housing (on land to which chapter 6 applied) in a ‘low and mid rise housing’ area, so long as the land was zoned ‘R2 Low Density Residential’ (section 170).
Again, it was not expressly stated that a subdivision for multi dwelling housing — where it was otherwise be prohibited by a local environmental plan — was made permissible by this provision.
This ambiguity has now been cleared up, with a new provision (section 173(1A)) being inserted into the Housing SEPP that plainly overrides local environmental plans.
The new provision will in ‘low and mid rise housing’ areas, assist the subdivision of multi dwelling housing in zones:
If:
a subdivision for a multi dwelling housing development that complies with listed requirements (set out in section 172 of the Housing SEPP) may nonetheless be the subject of a development consent.
As we warned above, it is important not to lose sight of the many areas of land that are arbitrarily excluded from the operation of Chapter 6 of the Housing SEPP. These excluded areas will not benefit from this new provision.
The NSW Government has, in one fell swoop, also amended 12 local environmental plans in relation to dual occupancy development.
The affected local environmental plans are:
In general terms these amendments establish new minimum lot sizes (and in some cases new minimum subdivision lot sizes) for dual occupancy development.
The amendments may have the consequence that more dual occupancy development can be carried out in more areas, including under complying development provisions.
Some provisions of the Low Rise Housing Diversity Code and the Pattern Book Development Code link the ability to access some complying development pathways to achieving the minimum lot size for dual occupancies in local environmental plans (for example, clause 3.B8(1)(b), clause 3B.21(b)(ii) and clause 3B(7)(a)(i) of the Exempt and Complying Development SEPP).
There has been a material change in the provision that said that dual occupancy development under the Low Rise Housing Diversity Code and the Pattern Book Development Code is not complying development if the development is:
This was set out in section 1.19(3B) of the Exempt and Complying Development SEPP. This exclusion now only applies on land in the Ballina local government area.
The bottom line
It’s great to see the NSW Government taking action to clear up some of the problems in the new ‘low and mid rise’ housing provisions. It’s a shame that it took eight months, but better late than never!
If you would like further information or have any queries regarding other matters, please do not hesitate to contact:
