What is the Difference Between a Boarding House and a Co-Living Housing Development?
- Henry Zhang
- 1 day ago
- 4 min read
Boarding House vs Co-Living Housing in NSW: Key Planning Differences
Two land use categories in NSW planning law address shared residential accommodation: boarding houses and co-living housing. Both provide alternatives to standard residential flat buildings, but they are defined differently, attract different development standards and suit different project types.
In short: Boarding houses are an established land use category providing longer-term lodging with shared facilities. Co-living housing is a newer category under the Housing SEPP that allows smaller, purpose-designed rooms with more integrated shared spaces and a broader range of services.
Definitions Under NSW Planning Law
Boarding house: A building providing lodgers with a principal place of residence (typically three months or more) with shared or private bathroom and kitchen facilities. Rooms are generally larger and the model is closer to traditional rooming house accommodation.
Co-living housing: Defined under the State Environmental Planning Policy (Housing) 2021 as purpose-built shared living accommodation where residents have private rooms and access to shared facilities and services. Co-living housing typically involves smaller individual rooms, more extensive communal areas and often includes services such as cleaning, utilities and communal programming.
Key Differences at a Glance
Room size Boarding house: Larger minimum room sizes under the Housing SEPP. Co-living: Smaller minimum room sizes, reflecting the more extensive communal areas provided.
Communal facilities Boarding house: Shared bathroom and kitchen facilities, communal laundry. Co-living: More extensive communal spaces including co-working areas, dining rooms, communal kitchens and sometimes gyms or rooftop terraces.
Services Boarding house: Accommodation only. Co-living: May include cleaning, utilities, internet and communal programming as part of the offer.
Tenure Boarding house: Principal place of residence, typically three months or more. Co-living: Can be shorter tenure; the Housing SEPP sets its own tenancy requirements.
Target market Boarding house: Lower-income residents seeking affordable long-term accommodation. Co-living: Young professionals, students and people seeking a community-oriented living arrangement.
Zone permissibility Both are permissible in residential and commercial zones, though the specific zones and conditions differ. Always check the applicable LEP and Housing SEPP.
Why the Distinction Matters
The land use category determines:
The development standards that apply (room sizes, communal space, car parking)
The approval pathway available (DA or CDC)
The design requirements and planning incentives that may be available
The nature of the product that can be delivered to market
Misclassifying a co-living development as a boarding house (or vice versa) can result in non-compliance with the applicable standards or an inability to deliver the intended product.
Step-by-Step: Choosing the Right Category
Define the product: What room sizes, communal facilities and tenure are proposed?
Match the product to the definition: Does it more closely align with the boarding house or co-living housing definition in the Housing SEPP?
Check zone permissibility for the correct category under the LEP and Housing SEPP.
Assess the applicable development standards for that category.
Determine the approval pathway (DA or CDC).
Engage a town planner NSW to confirm the classification and pathway.
Real-World Examples
Example 1: Traditional boarding house conversion
A large Victorian-era dwelling in an inner suburb is converted to provide eight rooms with shared bathroom facilities and a communal kitchen. Rooms are 12sqm to 18sqm. Long-term lodgers are the target market. This is a boarding house. The Housing SEPP boarding house standards apply.
Example 2: Purpose-built co-living development
A developer proposes a purpose-built seven-storey building with 80 private rooms of 15sqm to 20sqm, extensive communal kitchens and dining areas on each floor, a rooftop terrace, co-working space and a gym. A building manager provides cleaning and utilities as part of the package. This is co-living housing. The Housing SEPP co-living standards apply.
Common Misconceptions
"Co-living is just a rebranded boarding house."
They are distinct land use categories with different development standards and target markets. The distinction is legally meaningful, not just a marketing difference.
"Co-living housing is not regulated."
Co-living housing is a defined land use category under the Housing SEPP and is subject to specific development standards and DA or CDC requirements.
"Boarding houses are only for low-income residents."
While boarding houses traditionally serve lower-income residents, the planning definition is based on the nature of the accommodation, not the income of the residents.
Frequently Asked Questions
Can a building operate as both a boarding house and co-living housing?
No. A building must be classified as one land use. Mixed arrangements are not permissible under the standard planning framework.
Are co-living developments eligible for affordable housing incentives?
Some planning instruments provide incentives for affordable housing. Whether co-living housing qualifies depends on the specific instrument and the nature of the development. Seek advice from a town planner NSW.
Can co-living housing be strata-titled?
This is a complex area. Individual rooms in a co-living building may not be suitable for strata subdivision without specific design. Legal advice is recommended.
What is the minimum room size for co-living housing?
The Housing SEPP sets minimum room sizes for co-living housing. These are subject to amendment. Always check the current SEPP.
Is co-living housing permissible in all residential zones?
Permissibility depends on the specific zone and the applicable LEP and Housing SEPP provisions. Check the land use table for the relevant zone.
How does a lender view co-living housing?
This is a matter for individual lenders. Co-living housing is a relatively new asset class and lender approaches vary. Legal and financial advice is recommended.
