An overhaul of planning controls by Clover Moore’s City of Sydney council will encourage build-to-rent (BTR) units in the CBD, increase density in Pyrmont and Ultimo, require more family apartments, and limit dwelling loss in luxury rebuilds.
The proposed changes, which will go before the council’s planning committee on Monday, are an attempt to “take the initiative” on central Sydney’s shortage of rental housing and respond to the reduced need for office space following COVID-19.
Clover Moore said the city was constantly changing and encouraging build-to-rent units would deal directly with the rental crisis.Credit: Oscar Colman; Flavio Brancaleone.
Developers will have access to floor space bonuses of between 20 and 75 per cent for build-to-rent apartments in the CBD and co-living housing in the Haymarket precinct near the University of Technology.
The bonuses can be applied to knock-down rebuilds or conversions from commercial to residential, but will only be available for five years, “as the supply of rental housing is an urgent issue”.
Such bonuses already apply to commercial development but were “switched off” for residential. The council now says that “due to the current rental housing supply situation” and looming changes in state government policy, they should be switched on for build-to-rent projects.
In BTR – which is in its infancy in Australia, though more common in Melbourne than Sydney – a developer retains ownership of the building and leases the units to tenants. In Sydney especially, such projects suffer from viability issues due to high land prices.
Sydney has relatively few build-to-rent projects in the immediate pipeline, especially in the CBD, compared to Melbourne.Credit: Colliers
Moore said the “exciting” changes balanced the need for more housing and jobs with enhancing central Sydney’s character, public spaces and sustainability. “The city is constantly changing and growing,” she said.
She said boosting the feasibility of build-to-rent projects would directly address the rental crisis, while adding vibrancy by avoiding the tendency for investors to leave new apartments empty for capital gain. “Build-to-rent housing does not sit idle with lights out as some high-end investor apartments do,” Moore said.
The council cited research showing Sydney’s office vacancy rate was 14.4 per cent in October 2023, and was projected to reach 25 per cent. Demand for premium space would remain but lower-quality buildings “continue to experience significantly reduced demand”.
Premier Chris Minns put the City of Sydney on notice in September, saying he wanted more apartments in the CBD and accusing Moore of “effectively outlawing” them, which she denied. “We’re going to give peace a chance and try and work our way through this but, if not, I’ve got obligations, as does the prime minister, to house people,” Minns said at the time.
The council also wants to compel developers to build more family apartments. It is proposing to alter the dwelling mix for buildings of more than 20 units by increasing the minimum for three bedroom units from 10 to 20 per cent.
Under the new rules, a development must provide between 30 and 80 per cent studios and one-bedrooms, 20 to 70 per cent three or more bedrooms, and 0 to 50 per cent two-bedroom units.
Another new requirement is designed to prevent dwelling loss when older, smaller apartment buildings are demolished and replaced with larger luxury units. The provision would institute a maximum 15 per cent dwelling loss whenever a residential building is renewed.
The council’s plan for Pyrmont and Ultimo, which responds to the forthcoming Metro station in Pyrmont, allows for an additional 4100 dwellings and 20,000 to 27,000 jobs when combined with other changes on state government sites.
Maximum building heights will be increased for dozens of sites in Pyrmont and Ultimo, with the highest to be 120 metres (about 32 storeys) at one lot on Saunders Street. Two lots would also be rezoned.
The Metro station under construction this month in Pyrmont. Metro West is not due to open until 2030 at present.Credit: Janie Barrett
“Rather than taking an overarching, top-down, precinct-wide approach, the city has focused on sites that can sensitively accommodate change whilst delivering place benefits for the community,” council documents stated.
The council said it had reduced the number of dwellings planned for Harris Street in Ultimo, the main thoroughfare, due to uncertainty about what the state government wanted for the section south of the Western Distributor, near the Powerhouse Museum.
Heritage conservation areas in the City of Sydney. They apply to most of Glebe, Redfern, Surry Hills, Chippendale, Potts Point and Woolloomooloo, among others.
A review of the City of Sydney’s 75 heritage conservation zones also proposes limiting heights to the existing height of the building on the site, or 7.5 metres, whichever is higher.
“This will ensure that the characteristic scale of heritage areas is generally maintained while also allowing all buildings, even single-storey buildings, to accommodate a two-storey addition,” the council documents say.
The proposed changes will “allow for appropriate infill development” while ensuring “any new or replacement building improves the relationship between the site and the conservation area”.
The City of Sydney has 75 heritage conservation areas, covering 102,000 residents (almost half the population) and 22,000 buildings, of which 70 per cent are terrace houses. Most of Glebe, Redfern, Surry Hills, Potts Point, Chippendale and Erskineville are covered. The proposed rules would not apply to Millers Point.
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clarification
An earlier version of this report said developers would have access to floor space bonuses of 10 per cent on build-to-rent apartments. The correct figure is 20 to 75 per cent.