Posted on March 17, 2025 by Katie Mortimer 9

Application of the In-fill Affordable Housing Bonus Provisions to Low and Mid-Rise Housing Areas

When the second stage of the low and mid-rise housing reforms commenced on 28 February 2025, the instrument that amended the State Environmental Planning Policy (Housing) 2021 (Housing SEPP) did not make the in-fill affordable housing bonus provisions in Chapter 2 of the SEPP apply to development in low and mid-rise housing areas, as had been announced by the NSW Government.

The Housing SEPP was amended on Friday to correct this when the Lane Cove Local Environmental Plan Amendment (In-fill Affordable Housing) 2025 was published (Amending LEP).

The Amending LEP did not make any changes to the Lane Cove Local Environmental Plan 2009 and solely amended the Housing SEPP.

The in-fill affordable housing provisions allow for bonus floor space ratio (FSR) and height of up to 30% above the ‘maximum permissible’ FSR or height for certain residential development that includes at least 10% of the gross floor area as affordable housing. The amount of bonus FSR and/or height available is calculated using a formula based on the percentage of gross floor area used for affordable housing (the ‘affordable housing component’). See our article here on the announcement of these provisions. The affordable housing component must be used for affordable housing for 15 years and managed by a registered community housing provider (unless the development is carried out by or on behalf of the Aboriginal Housing Office or the Land and Housing Corporation).

On Friday, the Amending LEP amended the definitions of ‘maximum permissible building height’ and ‘maximum permissible floor space ratio’ in the Dictionary in Schedule 10 of the Housing SEPP. Those definitions are used to calculate the base height and/or FSR, on top of which the in-fill affordable housing provisions’ bonus of up to 30% can be applied.

Now those definitions define the maximum building height or FSR as the maximum: permitted on the land under Chapter 5 or 6, where relevant, an environmental planning instrument, other than this Policy, or a development control plan.

Chapter 6 of the Housing SEPP is the new low and mid-rise housing chapter. Where that Chapter permits a maximum height or FSR, an additional 30% can be sought relying on Chapter 2 of the Housing SEPP.

Sections 15C and 42 of the Housing SEPP were also amended to make it clear where the in-fill affordable housing division applies. You can read the Amending LEP here: Lane Cove Local Environmental Plan Amendment (In-fill Affordable Housing) 2025

Our earlier posts on the low and mid-rise housing reforms are here and here.

To discuss this post please contact Katie Mortimer on 8235 9716.