by Aaron Gadiel, Partner

The NSW Government has implemented the ‘first stage’ of its ‘low- and mid-rise housing’ reforms.  The changes commenced on 1 July 2024.

The changes are set out in the State Environmental Planning Policy (Housing) Amendment (Dual Occupancies and Semi-detached Dwellings) 2024.

The latest changes are a partial implementation of reforms foreshadowed in proposals released late last year.  Mills Oakley published an article on those proposals in December.

These changes concern dual occupancies and semi-detached dwellings.

A new Part 12 (‘Dual occupancies and semi-detached dwellings in Zone R2’) has been inserted into Chapter 3 (‘Diverse housing’) of the State Environmental Planning Policy (Housing) 2021 (the Housing SEPP).

The new provisions will override some prohibitions on the development of dual occupancies and semi-detached dwellings in the ‘R2 Low Density Residential’ zone in local environmental plans.

The change is not as big-a-deal as it might first appear.

This is because — under the Housing SEPP — secondary dwellings were already permitted in all residential zones where dwelling houses are allowed.

However, the pre-existing secondary dwelling provisions are limited.  A secondary dwelling has to be established in conjunction with a ‘principal dwelling’.  Among other restrictions, the floor area of a secondary dwelling is capped at 60 square metres (although larger secondary dwelling may be permitted under some local environmental plans).

Under the Housing SEPP, a dual occupancy is not subject to any such size restriction (although developers should consider the impact of local controls, such as development control plan provisions).

A ‘dual occupancy’ can be attached, or detached, but must (either way) be on a single lot of land. This may limit the commercial appeal of such development.

A ‘semi-detached dwelling’ is a dwelling that is:

• on its own lot of land; and
• attached to only one other dwelling.

The opportunity to develop semi-detached dwellings may, on some sites, allow for the more efficient use of land (as it effectively permits a zero setback on one side of a lot, where the dwelling would be attached to another dwelling on a neighbouring lot).

However, the new Housing SEPP provisions do not override existing minimum lot size provisions in local environmental plans.  This may limit the commercial appeal of semi-detached housing development in localities where large minimum lot sizes are in place.  Having said that, subject to local controls, strata subdivision may be an option to avoid the application of minimum lot sizes for a semi-detached housing development.

There is a wide list of exclusions from the new Housing SEPP regime for dual occupancies and semi-detached housing.

The reforms do not apply to:

• bush fire prone land;
• land identified as a ‘coastal vulnerability area’, a ‘coastal wetlands’ area or ‘littoral rainforests’ area under Chapter 2 of the State Environmental Planning Policy (Resilience and Hazards) 2021;
• land in a ‘Transport Oriented Development Area’ under Chapter 5 of the Housing SEPP;
• land that comprises a heritage item or on which a heritage item is located;
• the entire local government areas of Bathurst Regional, City of Blue Mountains, City of Hawkesbury and Wollondilly;
• flood prone land in the Georges River Catchment and Hawkesbury-Nepean Catchment under Chapter 6 of the State Environmental Planning Policy (Biodiversity and Conservation) 2021;
• land in a flood planning area in the following local government areas:
  • Armidale Regional,
  • Ballina,
  • Bellingen,
  • Byron,
  • City of Cessnock,
  • Clarence Valley,
  • City of Coffs Harbour,
  • Dungog,
  • Goulburn Mulwaree,
  • Kempsey,
  • Kyogle,
  • City of Lismore,
  • City of Maitland,
  • Nambucca Valley,
  • City of Newcastle,
  • Port Stephens,
  • Queanbeyan-Palerang Regional,
  • Richmond Valley,
  • City of Shoalhaven,
  • Singleton,
  • Tweed,
  • Upper Hunter Shire,
  • Walcha;
• land in an ANEF contour or ANEC contour of 20 or greater; and
• land within 200 metres of a ‘relevant pipeline’ within the meaning of section 2.77 of the State Environmental Planning Policy (Transport and Infrastructure) 2021.

The Government has also amended the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 to prevent any of the newly-permitted dual occupancy or semi-detached dwellings from being approved as complying development under the Low Rise Housing Diversity Code.

The Government describes this as a ‘temporary switch-off’ to give affected local councils the chance to plan for ‘appropriate settings such as lot sizes for dual occupancy developments in their areas’.  The Government says that the complying development pathway for dual occupancy development will be reinstated in these locations as part of the second stage of the reforms.

The Government says that other low and mid-rise housing reforms will commence later in 2024.  These have been described as the second stage of these reforms.  According to the Planning Minister, Paul Scully, these second stage reforms will include:

• townhouses, terraces and two storey apartment blocks near transport hubs and town centres in R2 low density residential zones across Greater Sydney, the Hunter, Central Coast and Illawarra regions; and
• mid-rise apartment blocks near transport hubs and town centres in R3 medium density zones and appropriate employment zones across these regions.