Housing regulation to be streamlined in NSW to provide greater clarity

The NSW Government is exhibiting a State environmental planning policy (SEPP) to consolidate existing housing-related SEPPs and introduce provisions for co-living housing. The changes aim to make the system more legible in order to promote housing diversity and affordability.

Snapshot

• The NSW Department of Planning, Industry and Environment (DPIE) is exhibiting a draft Housing SEPP to facilitate the delivery of more diverse and affordable housing types.
• The Housing SEPP aims to make housing-related SEPPs easier to navigate, especially by consolidating five existing SEPPs and clarifying the distinction between boarding houses and co-living housing.
• DPIE is receiving submissions on the draft Housing SEPP until 29 August 2021 and expects to finalise the Housing SEPP in October 2021.

Background

Since December 2020, the NSW Government has introduced two rounds of reforms aimed at driving more housing supply and meeting the needs of different people.

In a previous post, we explored the last round of reforms that introduced a planning pathway for build-to-rent housing.

As part of this latest reform phase, DPIE is exhibiting consultation drafts of the Housing SEPP and accompanying amendments to the planning regulation and standard local environmental plan.

Two key changes proposed in this round of reforms are summarised below.

Consolidating five existing SEPPs

The Housing SEPP will consolidate five existing housing-related SEPPs:

• State Environmental Planning Policy (Affordable Rental Housing) 2009;
• State Environmental Planning Policy (Housing for Seniors or People with a Disability) 2004;
• State Environmental Planning Policy No 21 — Caravan Parks (SEPP 21);
• State Environmental Planning Policy No 36 — Manufactured Home Estates (SEPP 36); and
• State Environmental Planning Policy No 70 — Affordable Housing (Revised Schemes).

This is intended to reduce the number of SEPPs in NSW in order to streamline the planning system.

Clarifying the planning pathways for affordable housing and co-living accommodation

DPIE notes that the boarding houses planning pathway was originally introduced to provide a form of housing that is compact and affordable. Since then, uncertainty has arisen as to what development can be carried out as boarding houses, and concerns have been raised about the scale and affordability of some boarding house developments.

In response, the Housing SEPP proposes to clarify the purpose of the boarding houses pathway by:

• requiring boarding houses to be used for affordable housing and managed by a registered community housing provider in perpetuity; and
• introducing a new pathway for co-living housing, which similarly comprises small private rooms with communal spaces but does not need to be used for affordable housing. It is proposed that off-campus student accommodation will be subject to co-living housing planning pathway.
• This is intended to provide greater clarity and certainty for the residential development sector.

Next steps

DPIE is receiving submissions on the draft Housing SEPP until 29 August 2021. It expects to finalise the Housing SEPP in October 2021.

The consultation draft does not yet include the provisions from SEPP 21, SEPP 36 or the recently introduced provisions on short-term rental accommodation and build-to-rent housing. However, DPIE ultimately intends to transfer those provisions into the Housing SEPP.

If you would like to understand what the proposed reforms could mean for you or would like any assistance with making a submission, please get in touch with us.

By Peter Briggs, Partner, Tom Dougherty, Senior Associate and Zhongwei Wang, Solicitor