Posted on August 16, 2021 by Sue Puckeridge and Lachlan Penninkilampi

Submission Deadline Approaching for the New Housing SEPP

A draft State Environmental Planning Policy (Housing) 2021 (Housing SEPP), together with a draft Environmental Planning and Assessment Amendment (Housing) Regulation 2021 (Proposed Regulation) and draft Standard Instrument (Local Environmental Plans) Amendment (Miscellaneous) Order 2021 (Proposed Standard Instrument), has been released by the NSW Government for public consultation.

These three instruments comprise ‘Phase 3‘ of housing-related reforms. Their stated purposes are to drive more housing supply and meet the need for diverse, affordable housing types. The instruments are also said to help the home building sector recover from the COVID-19 pandemic.

Submissions on the instruments are due via the NSW Planning Portal by 29 August 2021. The NSW Government aims to finalise the reforms in October this year.

In this blog, we give you an overview of key changes proposed.

Key changes

If made, the Housing SEPP will consolidate and repeal five existing SEPPs:

  • State Environmental Planning Policy (Affordable Rental Housing) 2009;
  • State Environmental Planning Policy (Housing for Seniors and People with a Disability) 2004;
  • State Environmental Planning Policy No 70—Affordable Housing (Revised Schemes);
  • State Environmental Planning Policy No 21—Caravan Parks; and
  • State Environmental Planning Policy No 36—Manufactured Home Estates.

The Housing SEPP is divided into two key chapters: ‘affordable housing‘ and ‘diverse housing‘. The affordable housing chapter contains provisions for the development of affordable housing and retention of existing affordable housing. The diverse housing chapter contains provisions for secondary dwellings, group homes, co-living housing, and seniors housing.

There are changes relevant to every type of housing-related development specified under the Housing SEPP. Only a selection of those changes is outlined below.

Boarding houses

Significant changes are proposed to development for the purpose of boarding houses.

Councils will have a discretion as to whether or not boarding houses will be permitted in the R2 – Low Density Residential zone (R2 zone).  They will no longer be mandated in this zone.

Consent will not be able to be granted to development for the purpose of a boarding house unless the consent authority is satisfied that from the date of issuing the occupation certificate the boarding house will, in perpetuity, be used for affordable housing and managed by a registered community housing provider.  This restriction will not apply to land by the Land and Housing Corporation or to a development application made by a public authority: cl 25.

The community housing provider will be required to manage the boarding house in accordance with a plan of management, apply Affordable Housing Guidelines, and be accountable to the Registrar of Community Housing: see cl 98G of the Proposed Regulation.

The development standards proposed for boarding houses will be more numerous than those which exist currently (see cll 23–24), and some of the existing standards will change.  For example, currently a consent authority cannot consent to a boarding house development unless it has considered whether the design of the development is compatible with the character of the local area, whereas under the Housing SEPP the consent authority will not be able to grant consent to the development unless it is satisfied that the design is so compatible.

Also, the definition of boarding house will be changed by the Proposed Standard Instrument to the following (see sch 1 [6]):

boarding house means a building that—

(a) provides residents with a principal place of residence for at least 3 months, and

(b) has shared facilities, such as a communal living room, bathroom, kitchen or laundry, and

(c) has rooms, some or all of which may have private kitchen and bathroom facilities, and

(d) is used to provide affordable housing,

but does not include backpackers’ accommodation, co-living housing, a group home, hotel or motel accommodation, seniors housing or a serviced apartment.

Co-living housing

The Housing SEPP proposes to introduce a new regime for development for the purposes of co-living housing: see Part 3 of Chapter 3.

Co-living housing is housing which contains private rooms and communal spaces managed by a managing agent, contactable 24 hours per day, in accordance with a management plan. Co-living housing is intended to include off-campus student housing development, which, prior to this draft of the Housing SEPP, was to be separately defined and provided for with its own development standards. Proposed standards for co-living housing developments are to be set out in cll 64 and 65 of the Housing SEPP, and a definition of co-living housing is to be inserted by the Proposed Standard Instrument in the following terms (see sch 1 [7]):

co-living housing means a building or place that—

(a) has at least 6 private rooms, some or all of which may have private kitchen and bathroom facilities, and

(b) provides occupants with a principal place of residence for at least 3 months, and

(c) has shared facilities, such as a communal living room, bathroom, kitchen or laundry, maintained by a managing agent, who provides management services 24 hours a day,

but does not include backpackers’ accommodation, a boarding house, a group home, hotel or motel accommodation, seniors housing or a serviced apartment.

While co-living housing is currently carried out under boarding house provisions, the key difference between the two types of development under the proposed Housing SEPP is that, unlike boarding houses, co-living development will not need to be used as affordable housing in perpetuity.

Seniors housing

Significant changes are also proposed for seniors housing developments.

Importantly, the definition of ‘seniors‘ is to be changed to raise the age from 55 to 60: cl 70.

Perhaps most significantly, the zones in which seniors housing developments will be permissible under the Housing SEPP will be prescribed under clause 67.  This prescription addresses the current uncertainties in the definitions of ‘land zoned primarily for urban purposes’ and ‘land adjoining land zoned primarily for urban purposes’. In doing so, the Housing SEPP will also remove the requirement for site compatibility certificates to be obtained for seniors living developments which, currently, can be carried out on land adjoining land zoned primarily for urban purposes.

Some of the requirements and standards to be met for seniors living developments will also change. For example, height will not be able to be used to refuse residential care facilities and hostels, if the building height (excluding servicing equipment on the roof) is no more than 9.5 metres. The current standard is 8 metres.

The Proposed Standard Instrument will also introduce a definition of independent living units in the following terms (at sch 1 [7]):

independent living unit means a dwelling or part of a building, whether or not attached to another dwelling—

(a) housing seniors or people with a disability, and

(b) containing private facilities for cooking, sleeping and bathing, and

(c) where clothes washing facilities or other facilities for use in connection with the dwelling or part of a building may be provided on a shared basis,

but does not include a hostel.

Very low, low, and moderate income household

The definitions of very low, low, and moderate income household are proposed to change.

The current definition provides for a household to be taken as a very low income, low income, or moderate income household if, as one alternative, it has a gross income less than 120 per cent of the median household income for the Greater Sydney (Greater Capital City Statistical Area) according to the Australian Bureau of Statistics and pays no more than 30 per cent of that gross income in rent.

Under the Housing SEPP, there will be different thresholds for very low, low, and moderate income households, as well as a new reference point, ‘Rest of NSW (Greater Capital City Statistical Area)‘, for determining whether a household is to be taken as a very low, low, or moderate income household.

Additional matters

There are eight schedules to the Housing SEPP. These make provision for affordable housing principles, complying development in relation to secondary dwellings and group homes, environmentally sensitive land, standards concerning accessibility and useability for hostels and independent living units, provisions consequent on commencement of the Housing SEPP, and the amendment of other environmental planning instruments and local environmental plans.

The schedules contain important provisions. For example, Schedule 7 provides that certain developments for the purpose of residential care facilities will be State significant developments.

Provisions not included in this consultation draft

For various reasons, this consultation draft of the Housing SEPP does not include following provisions:

  • Provisions from Phases 1 and 2 of reforms (Land and Housing Corporation social and affordable housing provisions and provisions for build-to-rent housing);
  • Caravan park and manufactured home estate provisions; and
  • Short-term rental accommodation provisions, which will take effect on 1 November 2021.

However, these provisions remain part of the reform process and will be a part of the Housing SEPP when it is finalised.

To find further information and make a submission, please follow the links below:

If you wish to discuss anything in this blog, please leave a comment below or contact Sue Puckeridge on 02 8235 9702 or Lachlan Penninkilampi on 02 8235 9719.