The Department of Planning, Housing, and Infrastructure has recently announced a pivotal update to the Housing SEPP with the introduction of a new Chapter 5 focused on Transport Oriented Development (TOD). In a significant step towards integrating sustainable urban development with increased access to affordable housing, the EP&A Amendment (TOD) Regulation 2024 will take effect on May 13, 2024. This legislation, under the broader Environmental Planning and Assessment Act 1979, aims to harmonise residential development with transportation infrastructure, ensuring that future growth promotes both mobility and affordability. It is one of the instruments that the Government is using to meet targets in response to increasing duress in the housing market. The EP&A Act is the primary land use planning statute in NSW, it governs matters such as planning administration, planning instruments, development assessments, building certification, infrastructure finance, appeals and enforcement.

The core of the new regulation

The TOD program will significantly impact sites within a 400m radius around specified rail stations, applying to most of them. The initiative is divided into two parts:

Part 1 (Accelerated Precincts): expected to roll out in late 2024, focusing on rapid development and integration.

Part 2 (Controlled Precincts): phased implementation from May 2024 through June 2025, involving more gradual application of the new regulations.

The amendment mainly targets residential flat buildings and shop-top housing in TOD Areas. Under the new regulation, developments in these areas must meet specific conditions before they can be granted an Occupation Certificate. The essence of this policy is to ensure that developments contribute positively to the housing market, particularly in making affordable housing options available and sustainable over the long term.

Key features

• Registration of Restrictive Covenant: before the issue of an Occupation Certificate, a restrictive covenant must be registered against the property’s title. This legal framework ensures that a designated gross floor area is dedicated to affordable housing indefinitely.
• Management by Registered Community Housing Providers: the affordable housing units must be managed by registered community housing providers. This management must continue indefinitely, with any changes in the provider being reported to the relevant authorities within three months.
• Since the initial exhibition of the proposed planning controls, there have been several noteworthy adjustments:
• Building Height: for residential flat buildings, the maximum building height has been revised from 21m to 22m. Shop top housing sees an increase from 21m to 24m.
• Floor Space Ratio (FSR): the FSR has been reduced from 3.0:1 to 2.5:1 across all schemes, aiming to balance density with community needs.
• Lot Specifications: A minimum lot width of 21m is now required, with no maximum lot size specified, facilitating diverse development types.

The new feature in the TOD areas is a mandatory 2% affordable housing contribution for developments exceeding 2,000m2 of gross floor area. This contribution is to be managed by a Community Housing Provider, maintained in perpetuity, with the potential for increased percentages over time. This ensures that the developments contribute positively to the housing market, specifically in making affordable housing more accessible and sustainable.

The Apartment Design Guide continues to apply within TOD precincts, ensuring high standards for apartment development. The new controls respect heritage values, applying to areas outside those containing heritage items or sites of significant cultural importance. In heritage conservation areas, new developments are required to enhance the existing heritage values.

Legal implications and the registration process

The process of registering a covenant involves drafting a legal agreement that outlines the specific responsibilities and restrictions tied to the property. This covenant must then be approved by local planning authorities and registered against the property’s title. This step is crucial as it ensures the perpetual enforcement of the affordable housing provision, binding not only the current but also future owners of the property. As with other 88B planning instruments the question of when to apply is significant for project timing and handover.

The registration of this covenant is a critical prerequisite for obtaining an Occupation Certificate. This certificate, which signifies that a building complies with all planning and building regulations and is safe to occupy, cannot be issued until the covenant is in place. The requirement underscores the Government’s commitment to ensuring that developments in TOD Areas contribute to long-term housing strategies.

Challenges for stakeholders

Principal Certifiers, tasked with ensuring that all construction complies with relevant laws and regulations, face new challenges under this regulation. They must verify the registration of covenants and ensure compliance with all conditions of consent before issuing Occupation Certificates. For developers and property owners, particularly those who might not be fully aware of these new requirements, this can introduce significant delays running into months unless they act early when notified.

Conclusion

To mitigate these challenges, early consultation with legal and planning experts is advisable. Developers should also engage in clear and continuous communication with all stakeholders, including potential managers and future owners of the property, to ensure that everyone is aware of the obligations attached to the property.

The EP&A Amendment (TOD) Regulation 2024 marks a progressive step towards creating sustainable and affordable urban environments. By tethering the development of residential spaces to transport infrastructure, the government aims to enhance the quality of life for urban residents, making affordable housing more accessible while promoting environmentally friendly travel solutions. As these new regulations take effect, all parties involved in property development need to stay informed and prepared for the changes to ensure smooth transitions and compliance with the new legal landscape.