NSW Government Low and Mid Rise Housing Reform 2025

The Low and Mid-Rise Housing Policy has recently been gazetted and is now legislation.

The Policy focuses on offering a variety of housing options in well-located areas. The NSW Government and Planning NSW have announced a series of reforms with the intention of making housing more affordable across the State and creating a more diverse and accessible housing market.

The policy targets residential-zoned areas located within 800 metres of key amenities, also known as “Town Centres” or “Transport Hubs”. The goal is to increase housing options in these areas while promoting sustainable, walkable communities.

These are the most significant planning changes I have seen in my 30 years working in the development industry. The planning changes are far wider-reaching than we had anticipated. Whilst we often focus on our local neighbourhoods, keep in mind that these changes are implemented across and include Newcastle and Wollongong most of the 171 Town Centres which are located in the Sydney metropolitan area.

The policy will create a significant amount of new dwellings across the Sydney area in the form of Duplexes, Semi Detached houses, Terraces and Apartments.

Key features of the policy include:

• Permissibility of Development: It allows for specific types of low and mid-rise housing development, streamlining the approval process.
• Non-discretionary Development Standards: The policy introduces clear, non-negotiable standards for development, ensuring that the quality and characteristics of the housing align with the broader urban planning goals.
• Development Potential Uplift: It encourages greater density and more efficient use of land to meet housing needs while still preserving the character of the area.

This combination of increased density, streamlined approval processes, and well-defined standards is aimed at fostering more housing options in strategic areas that are well-connected to services and public transport.

There is also an Affordable Housing component recently added to the Low and Mid Rise Housing Policy. The intention of the policy is to provide key workers Nurses, Police, Teachers etc the ability to rent at a discounted rate in these areas. The policy encourages developers to provide more rental accommodation for key workers by offering an uplift in density if 15% of the development is rented to key workers for 20% less than the market rent amount for a period of 15 years.

Key Planning Reforms

Dual Occupancies and Duplexes

2 Dwellings per Lot
Housing Zoned R2 has been added State wide

In R1, R2, R3 and R4 zones:
– Lot size: min 450 m2
– Lot width: min 12 m
– Floor space ratio: max 0.65:1
– Height of building: max 9.5 m
– Car parking: 1 space per dwelling minimum

Multi-dwelling Housing

3+ Dwellings per Lot
In R1, R2, R3 and R4 zones:
– Lot size: min 600 m2
– Lot width: min 12 m
– Floor space ratio: max 0.7:1
– Height of building: max 9.5 m
– Car parking: 1 space per dwelling minimum

Multi-dwelling Housing (Terraces)

3+ Dwellings per Lot
In R1, R2, R3 and R4 zones:
– Lot size: min 500 m2
– Lot width: min 18 m
– Floor space ratio: max 0.7:1
– Height of building: max 9.5 m
– Car parking: 0.5 space per dwelling
– Subdivision (R1, R2, R3 only): min 165 m2 per lot / 6 m width per lot

Residential Flat Buildings (Apartments)

Housing Zoned R3 & R4 – Within 800m of Town Centres
0–400 m from “Town Centre”
– Floor space ratio: max 2.2:1
– Height of building: max 22 m
– Storeys: max 6
– No minimum lot size or width (LEP provisions switched off)

James Harding
Site Sales Executive
+61 410 330 666
james.harding@raywhite.com