In December 2020, the New South Wales government announced its intention to introduce major reforms to the planning policies for housing.
The reforms were to be introduced in multiple phases. Phases 1 and 2 had been rolled out in late 2020 and early 2021. These reforms include amendments to the existing State Environmental Planning Policy (Affordable Rental Housing) 2009 (ARH SEPP) and introduction of the State Environmental Planning Policy Amendment (Build-to-rent Housing) 2021 (BTRH SEPP). The BTRH SEPP, notably, introduced purpose-built rental apartment buildings as a new type of land use, and permits these build-to-rent apartments to be developed on any zone where multi dwelling house, residential flat buildings, and shop top housing are permitted.
Phase 3 of the housing reform was introduced on 26 November 2021 with the enactment of the State Environmental Planning Policy for housing (Housing SEPP), which replaces the existing ARH SEPP.
Notable differences between the Housing SEPP and the ARH SEPP include the treatment of boarding house developments. Under the existing ARH SEPP, boarding house developments are permitted on land zoned R2 Low Density Residential, irrespective of whether the relevant Local Environmental Plans (LEP) permits boarding houses to be built in the Low Density Residential zone.
This is no longer the case under the Housing SEPP. Instead, clause 23 of the Housing SEPP simply provides that boarding houses may be carried out on land on which development for the purposes of boarding houses is permitted with consent under another environmental planning instrument. Thus, this leaves the permissibility of boarding house developments in Low Density Residential zone to be governed by the Local Environmental Plans administered by each local government.
However, it is unlikely that the introduction of the Housing SEPP would end boarding house developments in Low Density Residential zone overnight. Development applications lodged but not finally determined before the enactment of the Housing SEPP are not affected. Also, because most local governments have adopted the standard instrument LEP, which currently mandates boarding houses as a permitted land use in Low Density Residential zone, boarding houses are currently permitted under most, if not all, Low Density Residential zones in local government areas. Presumably, the Department of Planning would permit local governments to remove boarding houses as a permitted land use in Low Density Residential zone. Nevertheless, since amending the LEP is generally a long process, the intended effect of the Housing SEPP may not be felt for many years after its introduction.
A further observation to be made on the Housing SEPP is that, under clause 26 of the Housing SEPP, boarding houses must be used for the purpose of providing affordable housing “in perpetuity”. This seemingly addresses the concerns of many councils that the rents for boarding houses are not in fact affordable.