The Low and Mid-Rise Housing Policy - Planned changes under State Environmental Planning Policy (Housing) 2021
- Eollyn Cortes and Sagang Chung
- Sep 24
- 3 min read
Key Takeaway
The NSW Government has introduced the Low and Mid-Rise Housing Policy under the State Environmental Planning Policy (Housing) 2021 (SEPP) to broaden housing options for people at different stages of life. The policy is designed to encourage more diverse housing types, bridging the gap between traditional freestanding houses and high-rise apartment buildings. For developers, these changes create new opportunities to deliver a greater mix of housing in well-connected and desirable locations.
What is Low and Mid-Rise Housing?
Put simply:
Low-rise housing generally refers to dwellings of 1-2 storeys, including dual occupancies (two dwellings on one lot), townhouses, terraces and small-scale apartment buildings. It does not include freestanding houses.
Mid-rise housing usually means apartment buildings of 3-6 storeys.
Together, these housing forms fill the “missing middle” - denser than standalone homes but less concentrated than high-rise towers.
Key Changes Under the Housing SEPP 2021 (Chapter 6)
Increased permissibility
More housing types - including dual occupancies, multi-dwelling housing, terraces and residential flat buildings - are now permitted (with consent) in additional zones, most notably, the R2 Low Density Residential zone.
New non-discretionary development standards
Updated “non-refusal” standards apply to key planning controls, including building heights, floor space ratios and minimum lot sizes.
Location suitability Amended controls encourage low and mid-rise development within 800 metres walking distance of nominated town centres and major transport hubs (train, metro or light rail).
Affordable housing bonus In-fill residential projects can now benefit from bonus heigh and floor space allowances, in addition to the non-discretionary standards, where affordable housing is delivered.
Implementation Timeline
Stage 1 – 1 July 2024: Expanded permissibility of semi-detached houses and dual occupancies in the R2 residential zone across NSW.
Stage 2 - 28 February 2025: Introduced new planning controls to support increased low and mid-rise development.
Areas Where the Policy Applies
Greater Sydney;
Central Coast;
Lower Hunter and Newcastle; and
Illawarra-Shoalhaven.
What Developers Should Consider:
Site Selection
Review the Low and Mid-Rise Housing Areas Map to identify the indicative areas where the policy may apply.
Bonus Incentives
Assess whether affordable housing bonuses could improve project yield and feasibility.
Site Constraints
The SEPP does not apply to certain hazard-affected land, including bushfire prone and selected flood-prone sites (refer to the Department of Planning and Environment’s checklist in the 2025 Low and Mis-Rise Housing Policy).
How to Confirm Whether the Policy Applies to a Site
Check land exclusions – Confirm the site is not affected by exclusions such as bushfire-prone or selected flood-prone land.
Confirm zoning restrictions – Ensure the site is not located within a Transport Oriented Development area.
Assess location criteria – Verify that the site is within 800 metres walking distance of either:
the edge of a mapped town centre (as shown in the Housing SEPP layer of the NSW Planning Portal Spatial Viewer); or
the entrance to a nominated station (as listed in Schedule 11 of the Housing SEPP).
Conclusion
The Low and Mid-Rise Housing Policy represents a significant opportunity for developers. By broadening the range of permissible housing types and introducing bonus incentives, it allows developers to diversify portfolios, maximise yields, and meet strong market demand for medium-density housing in well-connected locations.
With these changes now in effect, it is an ideal time to review your sites and development opportunities. If you need assistance in assessing compliance requirements, please contact our people.
Eollyn Cortes 0478 727 395
Sagang Chung 0431 435 333
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