Urban Digest

Potts Point $91.5m Project Approved Despite Community Backlash

January 12, 2026

Artist’s rendering of a terracotta-coloured, multi-storey apartment tower with curved balconies and planted terraces on a tree-lined street corner.

A $91.5 million mixed-use development at 45–53 Macleay Street, Potts Point has been approved under NSW’s State Significant Development (SSD) affordable housing pathway. The Deputy Secretary for Development Assessment and Sustainability granted the concept approval under delegation from the Minister for Planning and Public Spaces.

Project Overview

The approved concept allows for the demolition of the existing 12-storey residential building and its replacement with a new shop-top housing development. The scheme permits a building envelope of up to 45.5 metres (RL 73.54) and a total gross floor area of 5,029.05 m².

The development includes 4,809.05 m² of residential space, of which 15% will be delivered as affordable housing, and 220 m² of ground-floor retail or commercial space. Vehicle access will be from McDonald Street, while pedestrian entries will be provided on both Macleay Street and McDonald Street.

In addition, the project is expected to generate around 160 construction jobs and 13 ongoing operational roles. Bridge Housing will manage the affordable housing component for at least 15 years.

Artist Impression looking south west from the corner of Macleay Street and McDonald Street

Strategic and Policy Context

The proposal aligns with NSW Government priorities to deliver more well-located housing. In particular, it supports targets under the National Housing Accord and recent amendments to the Housing SEPP.

The SSD affordable housing pathway, introduced in December 2023, allows residential developments over $75 million that provide at least 10% affordable housing to access height and floor space bonuses. As the site is zoned MU1 Mixed Use under the Sydney LEP 2012, shop-top housing is permissible. The project also qualifies for the 30% bonus available for affordable housing provision.

Planning History

A previous concept development application (D/2022/960) for a nine-storey mixed-use building was lodged with City of Sydney Council in September 2022. That proposal became the subject of Land and Environment Court proceedings, with a hearing scheduled for May 2025.

Following the NSW Government’s December 2023 in-fill affordable housing reforms, the applicant shifted to the State Significant Development pathway, which allows height and floor space bonuses for projects delivering at least 10% affordable housing.

A Design Excellence Strategy for the site was endorsed by the Government Architect NSW in January 2025. The current SSD application therefore seeks concept approval only, with the final building design to be selected through a competitive design process before a future detailed development application is lodged.

Design and Architectural Intent

Although a future development application will determine the final design, the approved envelope is based on a reference scheme and a competitive design process overseen by the Government Architect NSW, Council, and the Department.

The envelope complies with the maximum permissible height and floor space controls. The design excellence process will continue at the next stage through a Design Integrity Panel. The design intent is to deliver a podium and tower form that responds to the heritage setting and activates the Macleay Street frontage.

Community and Stakeholder Response

Community opposition was substantial. Of the 193 public submissions, 185 objected. Key concerns included the loss of existing dwellings, a perceived reduction in affordable housing, excessive height and bulk, heritage impacts, overshadowing, and the displacement of residents.

City of Sydney Council also objected. Its concerns focused on adaptive reuse, setbacks, overshadowing, and impacts on the Potts Point Heritage Conservation Area. In addition, Alex Greenwich MP raised concerns about cumulative dwelling losses in the area.

At the same time, state agencies provided technical advice and recommended conditions. These covered matters such as flood mitigation, tree protection, heritage management, and water servicing.

Existing building at 45-53 Macleay Street, Potts Point.

Impacts and Assessment Findings

The Department concluded that retaining the existing building was neither reasonable nor justified. The building has no heritage listing, offers poor amenity, and would require extensive upgrades to meet current standards. In fact, planning controls identify it as a detracting item within the Potts Point Heritage Conservation Area.

Although the proposal will reduce the number of dwellings on site, the Department noted that the existing apartments do not operate as regulated affordable housing under the EP&A Act. By contrast, the new development increases residential floor space by approximately 1,900 m² and introduces a legally secured affordable housing component.

The Department assessed impacts relating to traffic, overshadowing, privacy, and views. It found these impacts acceptable or capable of being addressed through detailed design. To help offset the loss of smaller apartments, the approval requires at least 50% of future dwellings to be studios.

Determination Outcome and Reasons

The Deputy Secretary approved the concept proposal subject to conditions. Key reasons for approval included the absence of heritage significance, the impracticality of adaptive reuse, compliance with strategic planning controls, and the public benefit of delivering new affordable housing in a highly accessible location.

Major conditions require the future development application to provide 15% affordable housing by GFA, maintain a minimum 50% studio mix, and address heritage, flooding, and design excellence through a competitive design process and Design Integrity Panel oversight.

Statutory Pathway and Next Steps

This approval covers the concept only. A future detailed development application will be required before any construction can occur. That application must comply with the approved envelope and all conditions, including affordable housing delivery and further heritage and design review.