Amendments to housing policy in NSW have been brought about under State Environmental Planning Policy (Housing) Amendment (Diverse Housing) 2025 (Amendments), which came into effect on 20 June 2025. The Amendments build on previous changes introduced by the State government to boost housing supply in NSW by expanding the housing types and areas that may benefit from these changes.
Overview of the Amendments
The Amendments build on the Low and Mid-Rise Housing Policy and the Transport Oriented Development Program, which were introduced by the NSW Government throughout late 2024 and early 2025. These schemes introduced new provisions into the State Environmental Planning Policy (Housing) 2021 (Housing SEPP) which aim to increase the supply of low- and mid-rise housing around transport infrastructure. In addition to the amendments to the Housing SEPP, the Amendments make changes to both:
- State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (Codes SEPP); and
- State Environmental Planning Policy (Transport and Infrastructure) 2021 (TI SEPP).
Low and Mid-Rise Housing Policy – Amendments to the Housing SEPP
The State Government’s earlier Low and Mid-Rise Housing Policy updated the Housing SEPP with planning controls aimed at boosting housing supply, diversity, and affordability, and included measures such as removing restrictions on developing terraces, townhouses, and low-rise flats in R1 and R2 zones, and medium-rise flats in R3 and R4 zones.
The Amendments build on the changes made by the Low and Mid-Rise Policy in three key ways:
- Incorporating provisions for diverse housing types: The Amendments insert favourable provisions for other forms of housing, such as co-living housing, housing for seniors, and build-to-rent housing, expanding the areas in which they may be built or able to benefit from certain planning control bonuses.
- Clarifying the definition of a ‘storey’: The Amendments contain a housekeeping provision clarifying that basements and storeys that are used for car parking and which are either below-ground or less than 1.2m above ground level are not counted as ‘storeys’ for the purpose of the Low and Mid-Rise Housing Policy’s storey controls for residential flat buildings and shop top housing.
- Revising previous exclusion of areas affected by aircraft noise: Previously, areas affected by a certain level of aircraft noise were excluded from the Low and Mid-Rise Housing Policy. The Amendments increase the threshold of tolerable aircraft noise, meaning that more land (primarily across the Inner West and Randwick Local Government Areas) will now become subject to the Low and Mid-Rise Housing Policy.
Transport Oriented Development Program - Amendments to the Housing SEPP
In addition to the above changes, the Amendments also introduce changes related to the Transport Oriented Development (TOD) Program. The existing TOD provisions in the Housing SEPP modify planning controls with the aim of facilitating development around major transport infrastructure. Currently, the TOD Program applies to a mapped “Transport Oriented Development Area”, maintained through the Department’s digital mapping tool via the Planning Portal. The Amendments expand the TOD Program to:
- lots which fall only partly within a mapped Transport Oriented Development Area; and
- lots proposed to be amalgamated where one or more lots is not currently within a mapped Transport Oriented Development Area, but which share a boundary of at least three metres with a lot within a mapped Transport Oriented Development Area.
Despite this change, the Amendments do not include an update to the definition of “Transport Oriented Development Area” under the Housing SEPP causing a disconnect between key operative TOD provisions and the areas to which they are purported to apply. We will have to wait to see if there is a clarifying amendment to the Housing SEPP to correct this anomaly.
Temporary Housing – Amendments to the Housing SEPP, the Codes SEPP, and the TI SEPP
Finally, the Amendments also expand and clarify the definition of ‘temporary housing’, including what constitutes a ‘dwelling’ and the relevant types of accommodation under the Housing SEPP. Temporary housing can now include supportive accommodation, health consulting rooms, hospitals, and accommodation ancillary to educational establishments or places of public worship. These forms of short-term accommodation will be classified as exempt development in some circumstances.
Complementary amendments have been made to the Codes SEPP and to the Transport and Infrastructure SEPP to:
- extend the period in which certain temporary housing can be considered exempt development from 30 to 90 days under the Codes SEPP; and
- introducing a definition of ‘temporary housing’ into the TI SEPP to accord with the changes to the Housing SEPP.
Please let us know if you would like further advice or assistance in understanding how these reforms may impact you.
