By Aaron Gadiel, Partner
The NSW Government has made further changes to state planning policies to make the ‘infill affordable housing’ incentive available in qualifying parts of the newly designed ‘low and mid rise housing areas’.
On 28 February 2025, the NSW Government has published the legal text for its new ‘Low and Mid-Rise Housing Policy’. The changes were set out in the State Environmental Planning Policy (Housing) Amendment (Low and Mid Rise Housing) 2025.
Mills Oakley has published an article explaining these changes.
In that article we identified several inconsistencies between the NSW Government’s published explanations of the changes — and the actual legal arrangements that had been implemented.
One of these inconsistencies related to whether the pre-existing ‘infill affordable housing’ incentive scheme could be applied on top of the development permitted under the new Chapter 6 (‘Low and mid rise housing’) of the State Environmental Planning Policy (Housing) 2021 (the Housing SEPP).
In its published explanation of the changes, the Department of Planning, Housing and Infrastructure said this:
The existing in-fill affordable housing bonus provisions will continue to apply to land where the Low and Mid-Rise Housing Policy applies. This means the bonus provisions will apply on top of the non-discretionary standards. This is to encourage affordable housing to be delivered in the local low and mid-rise housing areas.
However, this was incorrect, at the time. We drew attention to this apparent error in our article.
The NSW Government has now addressed the problem by further amending the Housing SEPP. In a misleadingly named document — the Lane Cove Local Environmental Plan Amendment (In-fill Affordable Housing) 2025 — amendments have been made to the Housing SEPP. (Despite the name, the amending document makes no changes to the Lane Cove Local Environmental Plan at all.)
The amendments were made on the 14 March 2025 — with immediate effect.
The substance of the amendments are as follows:
The state-level ‘infill affordable housing’ incentives now apply to:
that are permitted because of the new Chapter 6 (‘Low and mid rise housing’) of the Housing SEPP.
Furthermore, when the state-level ‘infill affordable housing’ incentives apply, they will be calculated with reference to the non-discretionary floor space ratio and height standards in Chapter 6 (but only when those standards also apply).
It is good to see the NSW Government move quickly to fix one of the inconsistencies between the announced changes and the actual changes.
If you would like to know more about the ‘infill affordable housing’ incentive scheme, Mills Oakley published an article about this scheme in December 2023.
If you would like further information or have any queries regarding other matters, please do not hesitate to contact:
