Posted on April 29, 2024 by Megan Hawley 9

Transport Oriented Development – Amendments to Housing SEPP

The much discussed and controversial ‘Transport Oriented Development’ planning controls (TOD Provisions) have finally been published by way of the insertion of a new Chapter 5 into the State Environmental Planning Policy (Housing) 2021 (Housing SEPP) today.

The TOD Provisions commence operation on 13 May 2024 and are initially proposed to apply to land in the vicinity of 18 railway or metro stations in 8 different local government areas, with a phased implementation of the provisions in respect of other areas near other stations from now until June 2025. Ultimately, the TOD Provisions will apply in 13 local government areas.

Initial Application

The stations around which the TOD Provisions will apply from 13 May 2024 are:

• Adamstown, Hamilton,  Kotara and the Newcastle Interchange stations in the Newcastle local government area;
• Booragul, Morisset, Teralba, and Cardiff stations in the Lake Macquarie local government area;
• Corrimal station in the Wollongong local government area;
• Gordon, Killara, Lindfield and Roseville stations in the Ku-ring-gai local government area;
• Kogarah station in the Bayside and Georges River local government areas;
• Turella station in the Bayside local government area; and
• Wyong and Woy Woy stations in the Central Coast local government area.

Ku-ring-gai Council has previously announced an intention to bring a legal challenge in respect of the TOD Provisions.

Ultimately the other local government areas in which the TOD Provisions will apply are Cumberland, Canterbury Bankstown, Canada Bay, Inner West, Burwood and Penrith. There have been mixed reactions from the councils to the application of the provisions. The phased introduction of the provisions is intended to allow councils in the remaining local government areas to progress their own planning reforms around the nominated stations in their areas.

The TOD Provisions apply to a ‘Transport Oriented Development Area‘ (TOD Area) which is to be defined by reference to a map. As at the time of writing, the map was not available. We will update this article when it is. The intention is that the area will be the land within 400m of the above railway or metro stations. That description raises issues regarding where the 400m is measured from, and the effect if the 400m point is only partially within a site. However presumably those issues will be resolved by reference to the map once available.

What do the TOD Provisions do?

The TOD Provisions are aimed at increasing housing supply and density near existing and planned public transport locations, and in particular to deliver mid-rise residential flat buildings and shop top housing. They are also intended to encourage development of affordable housing.

They override other parts of the Housing SEPP and provisions in other environmental planning instruments to the extent of any inconsistency. This means the TOD Provisions override local environmental plans which would restrict the type of development allowed by the TOD Provisions.

Permissibility:  Section 153 of the Housing SEPP provides that development for the purpose of a residential flat building is permitted with development consent on land in a TOD Area which is zoned Residential R1, R2, R3 or R4 (or equivalent), E1 Local Centre or equivalent zones, or B2 zones (if in the Canterbury Bankstown Area (once applicable in that area)). Shop top housing is permitted with development consent in certain employment zones in a TOD Area.

Height and FSR: Residential flat buildings permitted under the TOD Provisions can have a height of 22m and an FSR of 2.5:1, and buildings containing shop top housing can have a height of 24m and an FSR of 2.5:1.

The height and FSR standards are expressed to be development standards which, if complied with, prevent the consent authority from requiring more onerous standards for height and FSR. There is a note under this section referring to the provisions of the Environmental Planning & Assessment Act 1979 regarding non-discretionary development standards. Non-discretionary development standards are defined in the EPA Act as being standards identified as such in an instrument. The TOD Provisions do not expressly say the height and FSR standards are non-discretionary development standards, or exactly reflect the operation of the EPA Act provisions regarding non-discretionary development standards. However the height and FSR standards are included as non-discretionary development standards for development which is ‘build-to-rent’ housing.

The provisions regarding height and FSR do not apply if a greater height or FSR could be achieved under other provisions of the Housing SEPP or other environmental planning instruments.

Affordable Housing: If a residential flat building or building containing shop top housing in a TOD Area has a gross floor area of more than 2000sqm, then at least 2% of the gross floor area must be used for affordable housing and managed by a registered community housing provider in perpetuity. Importantly, however, if a provision in another instrument, or another provision of the Housing SEPP requires more affordable housing to be provided, that provision overrides the TOD Provisions. This is important as not only are there bonus height and FSR provisions in the Housing SEPP which require significantly more affordable housing, but many local environmental plans now also require the provision of affordable housing being 5% of approved GFA. The 2% requirement under the TOD Provision applies over and above any such requirement. It can only be met by the provision of affordable housing GFA, and not by way of a monetary contribution.

There are also development standards regarding parking provision for affordable housing.

The Environmental Planning & Assessment Regulation 2021 will be amended as of 13 May to require conditions to ensure the required amount of GFA is used for affordable housing and managed by community housing providers.

Other development standards: minimum lot size requirements in other instruments for residential flat buildings or shop top housing do not apply. However the TOD Provisions contain standards in respect of minimum lot width, active street frontages, and require consideration of the Apartment Design Guide.

Extension of other provisions: The TOD Provisions also amend other provisions of the Housing SEPP so that other chapters and provisions apply to development made permissible by the TOD Provisions. For example, Division 6 of Part 2 of Chapter 2 allows Landcom, Land and Housing Corporation and the Aboriginal Housing Office to carry out certain residential development without consent. That Division is extended to apply to development made permissible under the TOD Provisions. The provisions regarding build-to rent housing and co-living housing, for example, will also apply to development made permissible under the TOD Provisions.

There is no express provision in the TOD Provisions to the effect that they do not apply to land containing a heritage item or an Aboriginal object or to a site within an Aboriginal place of heritage significance, despite statements that the TOD Provisions will not apply to such land.

Savings

The TOD Provisions do not apply to a development application made, but not determined, on or before 13 May 2024 or a modification application made after 13 May 2024, if it relates to a development consent granted on or before 13 May 2024.

It is not unusual for amendments to planning instruments to contain such a savings provision – however, this is generally to prevent onerous provisions being retrospectively applied. Given the beneficial nature of the TOD Provisions, the savings provision is curious.

It could well result in DAs being withdrawn so that a new DA taking advantage of the TOD Provisions can be lodged, or consents simply not being acted on, as they cannot be modified relying on the TOD Provisions. Again, a completely new development application would be required.

Anecdotally, the announcement of the TOD Provisions and other planning reforms to boost housing has caused delays in the development industry as developers have put a hold on projects, pending an understanding of what greater yield can be achieved under the new provisions.

The savings provisions in the TOD Provisions would seem to exacerbate this slow down in the industry and cause further delays to the delivery of new housing.

The Statement Environmental Planning Policy (Housing) Amendment Transport Oriented Development ) 2024 which inserts the TOD Provisions into the Housing SEPP can be found here.

Please do not hesitate to contact Megan Hawley on 8235 9703 or leave a comment if you have any questions.