New housing SEPP takes effect
New State Environmental Planning Policy (SEPP) explained – what you need to know.
The State Environmental Planning Policy (Housing) 2021 (Housing SEPP), was published on the NSW legislation website on 26 November 2021 and takes effect from this date.
Objectives of the new housing SEPP
The main objective of the Housing SEPP is to improve the supply and delivery of affordable and diverse housing in appropriate locations, with a particular focus on the supply of dwellings for every stage of life.
The new Housing SEPP also simplifies the framework of planning instruments by consolidating five housing-related policies. It is envisaged the Housing SEPP will assist with the economic recovery of NSW following the pandemic.
The Housing SEPP consolidates the following housing instruments;
- State Environmental Planning Policy (Affordable Rental Housing) 2009 (ARHSEPP);
- State Environmental Planning Policy (Housing for Seniors and People with a Disability) 2004 (Seniors SEPP);
- State Environmental Planning Policy No 70 – Affordable Housing (Revised Schemes) (SEPP 70);
- State Environmental Planning Policy No 21 – Caravan Parks; and
- State Environmental Planning Policy No 36 – Manufactured Home Estates.
The Housing SEPP also includes the planning rules for Short term rental Accommodation, which commenced on 1 November 2021.
Types of Housing amended by the SEPP
Co Living is a new form of housing the SEPP introduces, which is typically made up of small private rooms with communal indoor and outdoor spaces. The private rooms are usually ready-furnished and the SEPP encourages the manager to create a sense of community within these communal spaces. Smaller rooms ought to translate to more affordable housing.
The Housing SEPP prescribes that co-living housing must have;
- a minimum of six private rooms;
- private rooms must be at least 12sqm (for a single residence) and 16sqm (for a couple) to 25sqm in area, excluding any private kitchens of bathrooms within the dwelling;
- adequate kitchen and bathroom facilities for all residents, noting these may be shared or private; and
- a manager, who does not have to reside on site, but must be contactable by phone 24/7.
Importantly, co-housing cannot be used for short term tourist or holiday letting. That is, the housing must be the occupants’ primary place of residence for a minimum of three months. It is envisaged that co-living dwellings will be leased by occupants and this form of housing development will apply to off-campus student housing.
Further, co-living development will earn a 10% density bonus in order to stimulate this form of housing. The density bonus will be reviewed in three years, upon the greater review of the SEPP.
Although similar in form to co-living housing, boarding houses will accommodate more vulnerable people within the population.
The Housing SEPP mandates boarding houses to provide affordable housing for a minimum of three months and into perpetuity for occupants, with these dwellings to be managed by a registered community housing provider (CHP).
The Housing SEPP introduces a new definition of affordable housing, that is either
- relative median household income, as published by the ABS, for both the Greater Sydney statistical area and the rest of NSW; or
- eligibility based on the National Rental Affordability Scheme (NRAS).
The only change to secondary dwellings under the Housing SEPP, is in respect of development standards for maximum floor area and setbacks from the principal dwellings by some LEPs in rural zones. If adopted, these will be contained in clause 5.5 of the LEP and effectively enables local councils to decide the controls which may apply. Importantly, clause 4.6 cannot be used to vary these standards.
Seniors housing (including people with a disability)
Prescribed zones and site compatibility certificates
The Housing SEPP prescribes zones where seniors housing is permitted with consent, and as such, removes the need for Site Compatibility Certificates and allows applicants to proceed directly to the Development Application process. Prescribed zones remove the exclusion of seniors housing from the Metropolitan Rural Area.
Independent livings units/ Self contained dwellings
These have changed in name only and not definition. Independent living units are now known as self-contained dwellings to align with current industry terminology.
The age for seniors housing has lifted to 60 to reflect the people accessing seniors housing later in life.
A draft interim updated seniors design guideline has been prepared to support the new Housing SEPP, which will in time, replace the 2004 guidelines. The draft interim Guidelines may be found here.
The provisions of the Build-to-Rent SEPP have been incorporated into the Housing SEPP. It allows build-to-rent development to occur in commercial cores and metropolitan centres, in an effort to encourage institutional land owners to consider this type of housing. A minimum of 50 dwellings is required, owned in one line with residential tenancies in place with the landlord. The dwellings are supported by an on-site manager. The Housing SEPP allows a reduction in car-parking requirements if public transport links are closely accessible.
The state based Land and Housing Corporation (LAHC)
To reduce delays, costs and increase supply, the Housing SEPP allows the LAHC to self-assess development to meet growing social housing needs. Amongst prescriptive design requirements, development must be no greater than 9m in height and result in no more than 60 dwellings.
On the horizon
Certain provisions from the Manufactured Homes Estates SEPP and Caravan Parks SEPP are transferred into the Housing SEPP by schedule 8. The provisions will be incorporated once published on the NSW legislation website, which is expected to follow a comprehensive review of these housing policies.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.