NSW rural housing reform could unlock wealth, help farms ‘remain viable’
While suburban homeowners can build granny flats, farmers with vast properties are banned from doing the same. That might be about to change.
A regulatory shake-up in NSW could unlock hundreds of millions of dollars in trapped rural wealth and boost much-needed housing supply.
Hundreds of thousands of landholders are sitting on properties over which strict planning laws currently prevent them from building secondary dwellings – effectively locking away potential rental income, capital growth and multigenerational wealth-building strategies that suburban homeowners have exploited for years.
A parliamentary inquiry, reporting in February, could change that, allowing rural property owners the same rights residential landowners enjoy on blocks as small as 450sqm.
For horticulture producers such as Meg and Lee Houghton, both in their 70s, their 15 hectares in northern NSW, highlights a common dilemma: it’s been a lifetime of work, yet strict planning regulations prevent them from realising that wealth through subdivision or by building an additional home to secure their family’s future.
“Our shire council claim by denying secondary dwellings they are protecting farmland when in fact they are making farming less viable,” Ms Houghton said.
But a potential shift in NSW government policy could soon turn rural land into a more dynamic investment for farmers and even “green”-change lifestyle investors.
A parliamentary inquiry and committee have been established to review and report on rural housing and specifically to allow for secondary dwellings to be built without having to be attached to the main homestead.
The current rules are seen by many as unnecessarily complex and restrictive. For example, in some areas, a secondary dwelling must be attached to the primary house, or if it is a detached dwelling it must be within 100m and be limited to a small size.
For years, homeowners in residential areas across NSW have been able to build a secondary dwelling, commonly known as a granny flat, on properties as small as 450sqm.
In stark contrast, the same flexibility has often been denied to rural landowners, whose properties are typically thousands of times larger.
The inquiry is grappling with a uniquely rural problem by balancing how to encourage and support agricultural communities while addressing neighbouring regional housing shortages without fragmenting critical farmland.
“If this happens, a secondary dwelling will add value but more importantly mean that our farm would remain viable for us as we age, and we could also accommodate our children,” Ms Houghton said.
“This would give us some financial stability in trying times when our crops don’t perform.”
Libertarian Party member John Ruddick, chair of the parliamentary committee leading the inquiry, said the proposed reform to rural housing would help ease the nation’s housing crisis.
This is not a handout or a subsidy. It’s about giving rural property owners the freedom to say, “just let us build”.
“It’s the simplest, lowest-cost solution to ease the housing crisis in NSW,” Mr Ruddick said.
By making it easier to build secondary dwellings on rural land, the committee estimates that it could benefit more than 350,000 NSW citizens directly, and support an even greater number with multigenerational families, without costing taxpayers.
Then there are the other benefits from a property perspective, including a diversified income stream through potentially renting the secondary dwelling, longer-term agricultural productivity potential and, as a result of both, increased capital growth.
Sixth-generation farmer Craig Huf, chair of the far north coast branch of the NSW Farmers Association, said changes are long overdue.
“We seem to be bogged down in red tape and green tape to try and get houses out of the ground, and one of the obvious solutions and quick solutions where there’s no massive amount of infrastructure required to be installed is to put a secondary dwelling on the rural land that we’ve got,” Mr Huf said.
“Not saying that will solve the housing crisis on its own, but it will certainly help alleviate it.”
As it stands, some local government areas such as Lismore have amended their local government plans to allow for additional dwelling on rural land but the majority, including Tweed Shire Council, have not.
This inconsistency between local government areas is a key issue the inquiry is tackling.
Mr Huf said these sorts of planning controls are “impractical and out of touch”.
The inquiry will release its report in February.
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