Understanding the Low and Mid-Rise Housing Policy in NSW
- Richard Mead
- Mar 11
- 7 min read
Updated: Jul 6
The Low and Mid-Rise Housing Policy is a major urban planning reform introduced by the NSW Labor Government to increase housing supply and improve housing affordability in New South Wales (NSW).
The policy will be implemented in two stages and aims to deliver up to 112,000 new homes over the next five years by expanding low and mid-rise housing options near transport hubs and town centres.
This guide explains:
✔ What low and mid-rise housing is
✔ How the policy changes existing planning controls
✔ Where these housing changes will be implemented
✔ Who benefits from these reforms
What is Low and Mid-Rise Housing? 🏠
1. Low-Rise Housing
🔹 Definition: Low-rise housing generally refers to 1–2 storey developments that provide higher-density living while maintaining a suburban character.
🔹 Examples:
✔ Dual occupancies (two dwellings on the same lot)
✔ Terraces
✔ Townhouses
✔ Low-rise apartment buildings (up to 2 storeys)
2. Mid-Rise Housing
🔹 Definition: Mid-rise housing typically includes 3–6 storey residential buildings, bridging the gap between low-density detached homes and high-rise apartments.
🔹 Examples:
✔ Mid-rise apartment buildings (3–6 storeys)
✔ Shop-top housing (residential apartments above commercial premises)
📊 According to the NSW Department of Planning, only two out of 33 councils in Greater Sydney currently allow terraces and townhouses in R2 low-density zones, limiting housing diversity.
How the Low and Mid-Rise Housing Policy is Changing NSW Planning Laws
Over the past few decades, NSW councils have heavily restricted low and mid-rise housing in favour of either high-rise apartments or detached houses. This has contributed to a housing supply shortage and rising prices.
The Low and Mid-Rise Housing Policy, embedded in the State Environmental Planning Policy (Housing) 2021, introduces major zoning changes to allow missing middle housing types in well-connected areas.
🔹 Key Changes Under the Policy:
✔ Dual occupancies, terraces, townhouses, and apartments will be permitted in R1 and R2 residential zones.
✔ Medium-rise apartment buildings will be allowed in R3 and R4 residential zones.
✔ These developments must be located within 800m (a 10-minute walk) of transport hubs, town centres, or major shopping precincts.
📊 The policy aligns with the National Housing Accord’s target of building 1.2 million homes by 2029, of which NSW is expected to contribute a significant share.
Stages of the NSW Low and Mid-Rise Housing Policy
📌 Stage 1: Permitting Dual Occupancies (From 1 July 2024)
The first stage of the policy introduced dual occupancies and semi-detached dwellings in the R2 low-density residential zone across all of NSW.
🔹 Impacts of Stage 1:
✔ More affordable housing options for homeowners looking to build an additional dwelling.
✔ Allows property investors to create dual-income properties on a single lot.
✔ Reduces urban sprawl by increasing density in existing suburbs.
📌 Stage 2: Encouraging Low and Mid-Rise Housing (From 28 February 2025)
The second stage expands planning controls to permit terraces, townhouses, apartments, and shop-top housing in designated low and mid-rise housing areas across Greater Sydney, the Central Coast, Lower Hunter, Newcastle, and Illawarra-Shoalhaven.
🔹 Where Will These Changes Apply?
✔ 171 town centres and train/light rail stations
✔ Within 800 metres of transport hubs and shopping precincts
✔ View the map of low and mid-rise housing areas here
📊 Urban planners estimate that by expanding medium-density housing, NSW could reduce housing shortages by 15–20% within five years.
How Housing Areas Were Selected for the Reforms
The NSW Government used extensive data and public feedback to determine the best locations for low and mid-rise housing expansion.
🔹 Site Selection Criteria:
✔ Access to Essential Goods & Services – Locations with supermarkets, shops, and community services.
✔ Public Transport Accessibility – Areas with frequent train, light rail, metro, and bus services.
✔ Travel Times – Proximity to major job centres (e.g., Sydney CBD, Parramatta, Newcastle).
✔ Infrastructure Capacity – Consideration of water, sewer, roads, and public transport networks.
✔ Hazard & Constraints – Areas with high flood or bushfire risk were excluded.
📊 Research by the Urban Development Institute of Australia (UDIA) shows that transit-oriented development can reduce car dependency by up to 35%, improving sustainability and urban liveability.
Which Areas are Excluded from the Low and Mid-Rise Housing Policy?
Certain high-risk or environmentally sensitive areas are excluded from these reforms.
🔹 Exclusion Criteria:
🚫 Land at high risk of bushfires or flooding
🚫 Land near dangerous goods pipelines or high aircraft noise zones
🚫 Heritage-listed sites
🚫 Bathurst, Hawkesbury, Blue Mountains & Wollondilly LGAs (due to evacuation concerns)
📌 Learn more about excluded areas here
📊 Heritage protections remain in place, ensuring that historic suburbs retain their architectural significance while accommodating smart growth.
Full List of Low and Mid-Rise Housing Areas
These reforms apply to 171 designated areas, including:
✔ Sydney Metro: Bankstown, Burwood, Hurstville, Rockdale, Hornsby, Parramatta, Penrith
✔ Central Coast: Gosford, Erina, Tuggerah, Wyong
✔ Newcastle & Hunter: Cessnock, Maitland, Charlestown, Kotara
✔ Illawarra-Shoalhaven: Wollongong, Nowra, Shellharbour, Kiama
📌 View the full list of affected LGAs here
Why These Housing Reforms Matter for NSW Residents
🏡 For First-Home Buyers: More affordable entry points into the housing market.
🏗 For Developers & Investors: Increased medium-density development opportunities.
📈 For Homeowners: Greater property value appreciation due to improved zoning flexibility.🚆 For Communities: Better-connected, walkable neighbourhoods near transport and amenities.
📊 A 2024 NSW Housing Report found that increasing housing density near transport hubs could boost local economies by $1.5 billion annually through increased foot traffic and demand for services.
Final Thoughts: The Future of Housing in NSW
The Low and Mid-Rise Housing Policy is designed to:
✅ Boost housing supply in well-connected areas
✅ Reduce housing affordability pressures
✅ Encourage sustainable, transit-oriented development
✅ Support urban renewal while protecting heritage and environmental constraints
📅 Implementation Date: 28 February 2025
