NSW Planning Reform: TOD SEPP Gazetted

The NSW Govt announced in December 2023 that a new SEPP would be written to encourage transport-oriented development (TOD) of higher-density homes around selected rail stations.

The final details of this SEPP have now been announced and gazetted, so we can now better understand the precise details and impacts of the reforms.

The Final Rules

These are the final SEPP rules that will override existing controls within 400m of selected stations:

• Residential flat buildings will be permitted in residential zones (R1, R2, R3, R4) and local centre (E1) including B1 in Canterbury-Bankstown
• Shop top housing will be permitted in local and commercial centre zones (E1, E2) including B1 and B2 in Canterbury-Bankstown
• Max height of 22m for residential flat building and 24m for shop top housing
• Max FSR of 2.5:1
• Minimum site width of 21m
• Zero minimum site area
• For projects with GFA > 2000 sqm, at least 2% affordable housing contribution physically delivered on the site and kept in perpetuity

Station Timeline

A total of 37 stations are going to be part of this SEPP eventually, but only 18 of them will become effective now. The list is as follows:

The map below shows all 37 Part 2 stations, distinguished by whether they are starting immediately or not, plus the 8 Part 1 stations subject to manual rezoning.

Differences from Proposal

There are a couple of important changes from the proposed TOD rules that PropCode analysed earlier this year:

• Residential flat buildings will be permitted in local centre E1 zone;
• Instead of a maximum height of 21m, the maximum height for residential flat buildings is 22m and shop top housing is 24m;
• Instead of a maximum floor space ratio (FSR) of 3.0:1, it will be 2.5:1 due to general inability to design to reach 3.0:1 when considering other constraints;
• A minimum lot width of 21m has been introduced, significantly reducing how many lots are eligible;
• A rule of no minimum lot area will override any existing minimum lot area rules that would otherwise apply to apartment projects;
• The affordable housing contribution has been clarified.

Impacts of New Rules

With PropCode’s extensive database of existing property boundaries and planning controls, including permissibility by zone, we can easily compare current conditions against the new TOD SEPP controls to see what the aggregate impacts are.

Our analysis filters properties on the following criteria:

• within or touching a gazetted TOD SEPP mapped catchment (the “Transport Oriented Development Area” in the SEPP map)
• has permissibility for high density residential under TOD SEPP
• lot width of at least 21m
• exclude any LEP heritage item or conservation area

To estimate potential new dwelling yield, we took the difference between existing FSR, or a default of 0.75:1, versus the new TOD SEPP FSR of 2.5:1. Where there is a positive delta, we multiplied by lot area to get GFA and assumed 100 sqm GFA per dwelling.

The following table shows outcomes by station for the 18 stations that are commencing now:

Analysis Insights

Across the 18 stations, an average of 18% of all lots are of sufficient width to access the TOD SEPP benefits, and about 60% of these lots have no heritage and do have a positive uplift. This results in just over 700 lots that immediately gain capacity of an estimated 37,000 dwellings additional to current planning controls.

Heritage is a major constraint in a few of the stations, especially Gordon, Killara, and Roseville in Ku-ring-gai. In a few key centre like Newcastle, Lidcome, and Kogarah, existing FSR and height controls already largely allow at least as much as the TOD SEPP, so uplift within the catchment is limited.

Lindfield has the most qualifying uplift lots with almost 100, but no other station has more than 62. Two stations have less than 20 such lots. Considering that some property owners will not wish to sell, and development feasibility may be an obstacle in other locations, this seems like a small amount of possible projects unlocked by the reforms.

The new capacity of 37,000 is significant but still a drop in the bucket, representing roughly one year of current NSW-wide dwelling completions. As the main constraint is the lot width rule, amalgamation of smaller lots would result in greater impacts from the new planning controls.

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