Transforming Suburban NSW - The New Low and Mid-Rise Housing Reforms
In a significant step toward addressing New South Wales’s housing supply challenges, NSW Planning introduced its Low and Mid-Rise Housing Policy in February 2025. The policy, which officially came into effect on 28 February 2025, is expected to unlock capacity for approximately 112,000 new homes across NSW over the next five years.
This bold reform represents a substantial shift in urban planning and zoning regulations, one that encourages the development of a more diverse mix of housing types in proximity to essential infrastructure and public transport.
What’s Changing?
The policy expands planning controls within an 800-metre radius or roughly a ten-minute walk of 171 key town centres and public transport stations. These changes will be applied across;
- Metropolitan Sydney
- The Central Coast
- The Illawarra-Shoalhaven Region
- The Hunter Region
Under the new rules, residential zones will see expanded development rights, including;
- R1 and R2 Zones (primarily low-density areas). No longer restricted from developing dual occupancies, terraces, townhouses, and low-rise residential flat buildings.
- R3 and R4 Zones (medium to high-density areas): Now permitted to build medium-rise residential flat buildings with significantly fewer constraints.
These changes aim to promote more efficient land use and increase the housing diversity available to growing urban populations.
How Were Sites Selected?
In selecting these targeted precincts, NSW Planning considered several key criteria to identify areas most suitable for intensified housing, including;
- Access to goods and services in the area
- Public transport frequencies and travel times
- Critical infrastructure capacity hazards and constraints
- Local housing targets and rebalancing growth
Where the Policy Doesn’t Apply
While the policy has a broad reach, some regions have been excluded due to significant natural hazard constraints. These include:
- The Blue Mountains
- Hawkesbury
- Wollondilly
The extensive bushfire and flood risk in these areas has deemed them unsuitable for higher-density development under Stage 2 of the reform.
Heritage Considerations
Similar to the Transport-Oriented Development sites, the planning controls will apply within heritage conservation areas, but not on individual heritage-listed items. Developments in these conservation zones will still require council assessment and approval, ensuring that any new builds are in keeping with the area’s historical character.
Increased Density Near Transport Hubs
One of the most impactful aspects of the policy is the higher density allowance near major transport nodes. Specifically:
- R3 and R4 zoned sites within 400 metres of a nominated station or town centre can now build up to six storeys (24 metres) in height.
- These sites are also permitted a maximum floor space ratio (FSR) of 2.2:1, creating significant development potential.
What This Means for NSW
The Low and Mid-Rise Housing Policy introduces significant changes to planning controls aimed at increasing housing supply in areas with existing infrastructure. It responds to ongoing affordability and supply concerns and aims to support walkable communities with better access to jobs, transport, and services.
These reforms may present new opportunities for property owners, developers, and councils across selected regions.