The NSW Government will introduce the Low and Mid-Rise Housing Policy on 28 February 2025. This policy aims to increase housing supply by allowing dual occupancies, terraces, townhouses, and mid-rise apartments in more residential areas. According to government estimates, these changes will support the construction of 112,000 new homes over the next five years.
Housing costs in NSW have continued to rise. In response, the government has introduced measures to encourage more diverse housing options. As a result, Premier Chris Minns explained that these reforms will provide more opportunities for homeownership and improve rental affordability.
The policy applies to land within 800 metres of 171 town centres and transport hubs in Greater Sydney, the Central Coast, Illawarra-Shoalhaven, and the Hunter. The government selected these locations based on public transport access, infrastructure capacity, and housing demand. Consequently, new housing development will focus on areas with established infrastructure.
Key Changes to Planning Controls
The Low and Mid-Rise Housing Policy introduces a state-wide framework that expands housing options in R1, R2, R3, and R4 zones.
Key Planning Changes
- Terraces, townhouses, and residential flat buildings will now be allowed in R1 and R2 zones.
- Mid-rise residential flat buildings (3–6 storeys) can be built in R3 and R4 zones near town centres and transport hubs.
- New planning standards will provide consistency across councils.
- Councils will continue assessing development applications for parking, light access, and frontage requirements.
The government states that these changes will increase housing diversity in areas where zoning rules previously restricted development. In addition, this policy aims to simplify the approval process for developers.
Expanding Medium-Density Housing
The policy allows several housing types that many local government areas previously restricted. These include:
- Dual occupancies, which are now allowed across all R2 zones.
- Terraces and townhouses, which can be built on subdivided lots.
- Manor houses, which contain up to four dwellings in a single low-rise building.
- Mid-rise apartments (3–6 storeys), now permitted near town centres and train stations.
- Shop-top housing, which integrates residential units with ground-floor retail or commercial spaces.
By permitting these housing types, the policy increases options for families, young professionals, and downsizers in areas with access to transport and essential services. Additionally, it encourages a shift away from single-dwelling suburban development.
Mid-Rise Housing Near Transport Hubs
The policy directs higher-density housing to areas near public transport and commercial centres.
- Buildings up to six storeys (21 metres) can be built within 400 metres of town centres and train stations.
- Buildings up to four or five storeys (16 metres) will be allowed between 400 and 800 metres from these hubs.
- Mid-rise apartments will now be permitted in designated R3 and R4 zones.
Minister for Planning and Public Spaces Paul Scully stated that this policy builds on earlier reforms from July 2024, which allowed dual occupancies and semi-detached homes across low-density residential zones. Consequently, the government expects these new changes to expand housing supply in well-connected areas.
Council Assessment and Development Standards
Although the policy modifies certain zoning restrictions, councils will still oversee specific development conditions.
- New minimum lot sizes, height limits, and floor space ratios apply across eligible areas.
- Subdivision rules now allow for smaller lot sizes in some locations.
- Heritage conservation areas require council approval, but heritage-listed items remain protected.
- Flood-prone and bushfire-affected areas, including parts of the Blue Mountains, Hawkesbury, and Wollondilly, remain excluded from the reforms.
The NSW Government has introduced consistent planning standards to streamline development approvals while maintaining council oversight where needed. Moreover, the policy ensures that local authorities still have input on infrastructure requirements.
Fast-Tracking Development with the NSW Pattern Book
These reforms align with the NSW Housing Pattern Book, which provides pre-approved architectural designs for low and mid-rise housing.
The government has confirmed that projects using the Pattern Book will qualify for a fast-tracked planning approval process. As a result, this initiative aims to simplify construction, reduce approval delays, and improve housing affordability.
Projected Impact on Housing and Infrastructure
The NSW Government estimates that the Low and Mid-Rise Housing Policy will contribute 112,000 new homes by 2029 as part of the state’s broader 377,000-home target under the National Housing Accord.
Housing Supply and Affordability
- The government expects an increase in supply to help stabilize housing prices, though affordability will also depend on construction costs, financing, and broader market conditions.
- Subdivision changes may create smaller, more affordable housing options, particularly for first-home buyers.
Infrastructure Considerations
- Higher density in some areas will increase demand for transport, schools, and utilities.
- The policy does not provide specific infrastructure funding but states that new housing will be built near existing services.
- Councils and planning authorities will need to assess infrastructure capacity as housing density increases.
Stakeholder and Community Considerations
The policy has undergone public consultation, incorporating feedback from councils, town planners, architects, developers, government agencies, and community groups.
- Some councils and residents have raised concerns about increased density affecting local infrastructure and neighbourhood character.
- The NSW Government has excluded certain areas based on environmental risks, such as flood and bushfire-prone locations.
The government has stated that heritage conservation areas will still require council approval, ensuring that local character remains part of the planning process. Consequently, local planning authorities will have a role in preserving historical precincts.
Implementation and Next Steps
The Low and Mid-Rise Housing Policy will take effect on 28 February 2025.
- Councils must update local planning rules to align with the policy.
- The NSW Department of Planning will monitor implementation and compliance.
- The government will review housing development and infrastructure capacity as the policy is rolled out.
For more details, visit the NSW Government’s Low and Mid-Rise Housing Policy webpage.
