Head of developer advocacy group Urban Taskforce, Tom Forrest

Those with a foot in developer camps have slammed proposed changes to NSW housing policy, saying they will have the opposite effect to what is desired and that government planners should start again with the policy from scratch.

This week, the NSW government opened its new Housing State Environmental Planning Policy (SEPP) for public review, among which were provisions aimed at encouraging more affordable housing, specifically in relation to boarding houses, co-living and seniors housing  developments.

Chief executive of developer advocacy group Urban Taskforce, Tom Forrest said the new SEPP would do the opposite of what it proposed, by removing incentives for creating cohabitation developments and restricting zoning on where they can be built.

Former Urban Taskforce chief executive Aaron Gadiel, who has spent the past decade as a planning lawyer representing developers, said “almost all” of the boarding house projects he had helped secure consent for over the past five years would not be approved under the new system.

In the past, boarding homes have proved a controversial development type, receiving push back from some councils who see them as potentially detrimental for the character of an area.

“The government appears to have caved-in to councils who say they want affordable housing but oppose it at every turn,” Mr Forrest said.

“If the NSW government really supports housing diversity and more affordable housing choice, they should scrap this draft policy and start again.”

One of the intentions of the Housing SEPP is to create a new category of housing, distinct from boarding houses, called co-living spaces that some media have touted as a “trendy new wave of communal housing”.

However, Mr Gadiel says under the new rules, “both of these new development types will be subject to a planning regime that is likely to be less attractive…to private sector developers than the status-quo.”

Planning Institute of Australia national policy manager John Brockoff said his organisation supported a diversity of housing types in NSW and welcomed boarding houses being mandated as affordable housing.

Under the proposed Housing SEPP, boarding houses would be subject to rent controls and would need to be managed by a not-for-profit community housing provider.

Update: Response from DPIE

After publication, a spokesperson for the Department of Planning, Industry and Environment told The Fifth Estate, the draft Housing SEPP was created following extensive consultation with councils and industry, and would help deliver a diversity of housing to meet people’s needs.

“We want to put a halt to developers using existing boarding house rules and benefiting from incentives to build developments that are not affordable. That’s why we are making it mandatory for boarding houses to be affordable and have introduced co-living as a new housing option,” the spokesperson said.

“This new option means new-generation boarding houses and purpose-built student accommodation can continue to be developed, while boarding houses are there for those who need them.”

They pointed out the new policy would in fact increase the density bonus for boarding houses from 20 to 25 per cent, and that co-living developments would be eligible for a 10 per cent density bonus until 1 August 2024.

Additional density bonuses for town houses, dual occupancies and residential flat buildings are also available if they have an affordable housing component to be rented to eligible low to moderate income households.

Increasing restrictions to encourage more housing?

The changes would preclude creating new boarding houses in low density residential areas, unless they are approved by council, which Mr Forrest said has, “effectively killed the feasibility of this housing type”.

Co-living is also being limited to areas in which residential apartments are also permitted, which forces the two development types into competition, he said.

A Floor Space Ratio (FSR) bonus, available to some developments that include affordable housing, has also been reduced from 20 per cent down to 10 per cent.

“If any developer has a choice between building an apartment and building co-living, the maths will dictate that they will build apartments every time,” Forrest said.

“That is why co-living must be allowed in (low density residential) zones or the FSR bonus needs to be greater if co-living is to be developed at all.”

Property Council of Australia acting NSW executive director, Lauren Conceicao said the objective of the new Housing SEPP was a positive step forward, however “the devil would be in the detail”.

“The Policy unfortunately does not permit co-living in Low Density Residential zones, which covers 80,000 hectares in Greater Sydney. This greatly limits the potential of the policy to provide affordable rental options in accessible areas close to transport, services and jobs,” Ms Conceicao said.

“We want to ensure that the SEPP simplifies housing policy and does not introduce building controls and development standards that render these types of developments unfeasible for developers.”

Mr Forrest said that mandated parking associated with new developments further reduced the viability of making housing more affordable for those in lower income brackets or in need of short term accommodation.

Planning Institute’s John Brockoff also questioned the sense behind mandating car parking spaces, saying, “the balance needs to be struck between ensuring amenity and driving new housing typologies.

“There remain issues regarding the permissibility of boarding houses and co-living in low density residential zones,” he added.

“Local government are best placed to curate land use outcomes to achieve their strategy for this zone and ensure that diverse housing is achievable across the community.”

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  1. Why don’t they take a look at some of the developments in Potts Point for example, 21 Sqm Studios are for sale in the area and so many of them, this is just a portion of a large quantity on the market. I believe if built well and fitted out properly with all the needs for independent living, including safety and security, taking into consideration the area and demographics and needs for young people starting out at a Uni or Hospital, importantly don’t over develop for the size . I’m currently in the process with a DA in Council.

  2. Large houses designed for many people could be built alongside large houses that currently house very few people. Housing over rail corridors is another option.residential crown land never been released for sale needs to be identified and aboriginal title decided or have housing built on that land for aboriginals