NSW Legislation Update: Low Rise Medium Density Housing Approval to be Fast Tracked

The housing industry is abuzz with excitement thanks to the recently announced changes to build legislation which will affect the medium density housing code. Set to come into effect on 6 July 2018, the updated code will ensure that low rise medium density housing such as dual-occupancies (duplexes), manor houses and terrace houses in R1, R2, R3 and RU5 zones in New South Wales will be easier to build through a fast-track complying development process. This approval is only allowed where medium density development is currently permitted under the Local Environmental Plan (LEP).

At the moment the complying development approvals process applies to relatively straightforward residential, industrial and commercial building projects but it will expand to accommodate the low rise medium density housing to fill the housing gap. These changes were ultimately brought about to facilitate the additional 725,000 homes which are needed to house Sydney’s diverse growing and ageing population such as families and empty nesters. This high build level equates to an annual population increase of more than 100,000 a year, or over 2,000,000, by 2036.

Housing minister Anthony Roberts said, “Low rise, medium density housing is the missing part of the NSW housing stock between traditional free-standing homes and strata-titled apartments.”

The new code will encourage faster development approvals for medium density housing which is a huge win for the industry. At the moment medium density housing holds a 10% share of new approvals, while the rest of the market is dominated by free-standing houses or apartments.

The legislation which comes in force in July designates that future builds must be consistent with the Low Rise Medium Density Design Guide published by the Department of Planning and Environment last year (2017). The newly released guide covers aspects such as landscaped area, local character and context, visual privacy, and acoustic privacy, to ensure that all residents have quality, and most importantly, affordable and liveable accommodation available to them. As the population in Sydney, and NSW, grows to accommodate the changing demographics, and smaller homes become more commonplace, the quality of the build standard will become more critical.

Minimum standards for duplexes, townhouses and manor houses will still apply under the new housing law. In the case of duplexes, for example:

·         Blocks need to be greater than 12 metres wide

·         Property blocks must be at least 400 square metres (or the minimum lot size as informed by council)

·         A minimum side setback of 0.9 metres will apply

·         The dwelling must be at least 5 metres wide

·         All dwellings require at least one off-street parking spot

Larger minimums will be in force for terrace houses and manor houses as detailed in the new legislation.

So what will homeowners, builders and architects need to be aware of?

1. Registered architects will be primarily responsible for the design

A Design Verification Statement from the designer (a person registered as an architect in accordance with the Architects Act 2003) will need to be submitted alongside the lodgement of the complying development certificate for medium density housing. This change in the Environmental Planning and Assessment Amendment (Low Rise Medium Density Housing) Regulation 2017 will affect many designer-builders in the industry as only registered architects will be able to design these one or two-storey developments. This change has been introduced to ensure a consistent level of quality in design especially when it comes to privacy, landscaping, ventilation and light – all essential factors in medium density homes.

As stated in the legislation amendment, the designer will need to verify that “he or she designed, or directed the design of, the development” and addressed “how the design is consistent with the relevant design criteria in the Medium Density Design Guide published by the Department of Planning and Environment.”

2. Medium density housing now applies to manor houses and terraces

The amendment introduces the fact that manor houses and terraces now form part of the definition of medium density housing. As stated in Standard Instrument (Local Environmental Plans) Amendment (Low Rise Medium Density Housing) Order 2017:

“Direction 6. Manor houses must be permitted wherever multi dwelling housing is permitted in the Land Use Table.

Direction 7. Multi dwelling housing (terraces) cannot be prohibited in a zone if multi dwelling housing is permitted in that zone.”

Manor houses and terraces will now be allowed wherever the medium density housing zones apply.

3. Property minimums have been decreased

Existing council laws state that frontages for duplexes need to be at least 15 to 20 metres. The new legislation states that property blocks of 12 metres in width will now be able to develop their property using the updated fast-tracked system.

How has Australia reacted to the imposed plans?

It can be presumed that owners of small and narrow properties will be particularly pleased with the news. They will be the first ones to benefit under the new statewide plans, especially taking into account the 3 metre reduction in property width for duplexes.

This simpler planning idea has been welcomed by those in the industry although as Chris Johnson, CEO of Urban Taskforce, has stated, the councils will need to amend their LEPs to allow for more medium density housing builds. More land will need to be re-zoned to accommodation the greater range of housing that Sydney needs over the next 20 years. As it stands, terraces and other two-storey development will not be introduced into areas where existing planning laws prohibit that type of building. Johnson said, “Complying codes that establish simple envelopes that protect neighbours for building types that have become accepted in the community are a good way to simplify planning in NSW and save costs to consumers.”

Although, as with any new legislation introduction, not everyone is happy with the update. Independent Ryde Councillor Roy Maggio says, “Aussie backyards are being turned into medium-density slums.” The council area of Ryde currently has extremely strict duplex rules requiring frontages of at least 20 metres. Maggio believes this 8 metre drop in minimum duplex development width would “destroy the amenity of a normal housing block in suburbia”. He is not mincing words at all and claims that the planning controls have gone mad ultimately bringing in more people, more cars and more traffic congestion.

Others believe that the new changes would be welcomed with open arms and the outdated regulations are necessary to increase the amount of affordable housing available. Housing supply is a continuous problem in Sydney’s fast-growing population, and this is one of the most logical changes to increase the housing supply.

How will the changes impact current standards?

Property prices will rise

A property which is suitable for a dual occupancy will now be worth more on the market – somewhere between 10%-30% more depending on the area. Individual landowners will be able to build a second property on even the narrowest of properties, provided it meets the minimum standards, to encourage rental returns to offset the higher property prices.

Applications will be approved faster

Applications will now be approved quicker provided they meet the Low Rise Medium Density Design Guide standards. As some development applications can take over two months and up to one year to approve, the fast-tracking of simpler applications is welcomed.

Medium density development will be popular

As medium density property developments contain relatively less risk than apartment projects and have fewer construction costs, there will be a strong demand from both local and offshore groups.

Homeowners can save on assessment fees

Homeowners will be able to save up to $15,000 by taking the fast-tracked complying development path. This newly announced route will forego the need for a Development Application (DA).

At planland, we are particularly excited about the news. As champions for smaller quality blocks and income properties, we look forward to assisting in the creation of aesthetically pleasing middle home properties which are functional and cost effective. We specialise in the design of residential, new dwelling, and multi-dwelling design including dual occupancy dwellings, terrace houses and manor houses. We are extremely passionate about our work and believe that this is a positive step for the building industry to address the gap between houses and unit blocks.