Sydney poised for priority zones to solve housing crisis

The Minns government will establish a series of priority development zones located near public transport across Sydney, as part of a signature push to boost the state’s housing supply.

The centrepiece of the reforms, which are yet to receive final sign-off by cabinet, will be seven state-led priority rezonings around Sydney metro stations. The government is prepared to override council opposition to dramatically increase residential housing density.

Chris Minns has declared he wants to turbocharge development to address housing shortages.Credit: Dominic Lorrimer, Janie Barrett

Sources inside government and industry involved in the final stages of the reform package who were not authorised to speak publicly said they hoped it would address Sydney’s housing supply crunch and meet daunting targets agreed to at national cabinet.

The Minns government is expected to announce the seven sites next month as well as hand down the fate of the multibillion-dollar Metro West project.

The announcement is likely to set Premier Chris Minns on a collision course with local councils resistant to higher density, but he has made no secret of his intention to boost housing supply with or without council support.

He has previously said he would not “rule anything out” if local councils fell short of housing targets. He told a Property Council lunch in September that the state government had the powers “to enact reform, to pursue housing targets and completions in various parts of the state”.

“We don’t need any enabling legislation to make that happen,” he said at the time.

NSW Planning Minister Paul Scully declined to comment, saying he would not “discuss cabinet proposals”. “I would urge people to wait and see the final decision and announcement,” he said.

However, industry sources with knowledge of the government’s plans who asked to remain anonymous said as many as 10 precincts surrounding transport hubs had been discussed. However, the final plan is more likely to have seven zones to carry the bulk of the state’s housing targets.

The government has made no secret of its desire to increase infill density in Sydney’s inner suburbs because of the lower cost of associated infrastructure such as transport and public spaces compared to new greenfield developments on the urban fringe.

But faced with long development application wait times and stubbornly low housing numbers, the government will seek to overhaul the system to streamline approvals in inner-ring suburbs.

The reform package will also allow developers who met capital threshold requirements to progress rezoning proposals and stage one development applications concurrently, as opposed to the current system, which requires the rezoning assessments to be completed before a DA can begin.

Despite that concession, industry stakeholders engaged in consultation have been lobbying for the government to allow “snap” rezoning within the proposed transport districts. Property Council of Australia NSW executive director Katie Stevenson said the existing system meant any rezoned land was unlikely to see construction completed and “keys in the door of new homes” until mid-2029 “at the earliest”.

“We cannot wait for an accelerated precinct planning process to take place over six, 12 or 18 months if we are to deliver the record levels of housing required of us over the five-year window of the National Housing Accord,” she said.

While high-density apartments around rail or metro stations would form the core of the rezoned districts, the government also plans to encourage medium to low density developments, stretching out up to 1.2 kilometres from the centre of a precinct, to maximise land use.

Stevenson said she was working with the NSW Government Architect to design a list of best practice, well-executed housing to help “build a social licence for more terraces, townhouses, villas and three to six storey apartments”.

The list was expected to assist the Government Architect formulate off-the-shelf, medium-density and pre-approved developments to be replicated across Sydney and expedited through the planning system.

Minns last month expressed his appreciation for the approach, known as “pattern book” designs, describing the construction of low-rise, three or four-storey apartment blocks as “the future of NSW”.

The signature housing reforms come as Scully remains locked in consultation with stakeholders over a draft development reform policy to promote more affordable housing. The proposal gave developments worth over $75 million a 30 per cent floor space ratio and height bonus if 15 per cent affordable housing was included.

But the government has faced blowback from industry over concerns the draft policy, which is expected to be released within weeks, undermined the ability of developers to obtain the proposed height and floor space bonus inserted to incentivise the construction of affordable housing.

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