Media Archive / TOD SEPP to deliver more housing – delivery is the key says UDIA 

TOD SEPP to deliver more housing – delivery is the key says UDIA 

Today’s announcement by the Minister for Planning & Public Spaces has confirmed the release of the much-anticipated Transport Oriented Development (TOD) SEPP, which will come into effect next month. 
While TOD is acknowledged as the global gold standard for increasing housing density, UDIA is concerned some aspects of the SEPP do not to take into account the industry’s capacity to deliver housing, in particular the current challenges with development feasibility and the need for future investment certainty.  

“According to the Government’s announcement, the 39 sites in Tier 1 and Tier 2 of the TOD Program are projected to deliver over 170,000 new homes.  Feedback from industry has indicated that as drafted, the TOD SEPP may fail to deliver on this bold ambition because the heights and floor space ratios are too low to allow development to proceed in current market conditions,” said Gavin Melvin, Acting CEO, UDIA NSW.
“While UDIA welcomes today’s progress, we caution that even if we deliver the estimated additional 11,000 homes per year under the TOD Program, this is still only 15% of NSW’s annual target under the National Housing Accord. With the most recent ABS data release showing apartment completions at an 11 year low in NSW, we are getting further way from the National Housing Accord targets,” said Mr Melvin. 

Key issues: 

  1. The Commencement of the SEPP 

18 sites within the Tier 2 Program will commence from May 13. However, with no schedule of dates provided for the other 19 (and potentially more) future TOD sites in the Program, there is no guarantee when these sites will go live. This creates significant uncertainty and impacts developers’ confidence in being able to invest around the TOD precincts. 

  1. Development Controls 

UDIA is pleased that the State Government took industry feedback that a 3:1 FSR is incompatible with a 6-storey height limit, but our recommendation was that height controls were relaxed to allow the full 3:1 FSR to be delivered. By winding back the FSR to 2.5:1 as opposed to increasing the height, there will be fewer sites where housing can be delivered.

  1. Affordable Housing  

The current provisions surrounding affordable housing will be unworkable for many developers who may choose to not lodge development. While a 2% contribution is modest, we note that the contribution must be 2% of Gross Floor Area, as opposed to a monetary contribution. This has several potential flaws. For example, if 2% GFA is less than a single unit, how will this be managed?
Additionally, it will be impractical for many Community Housing Providers (CHPs) to manage just 2% GFA in buildings in perpetuity (which, for example, in a 50-unit apartment is only 1 unit). Our CHPs members have told us their strong preference is to own and operate larger numbers of homes in a single building, as it brings economies of scale. There are also likely to be situations in some buildings which have higher levels of amenity, where the cost of strata levies could potentially exceed the rent being received by a CHP. 
Some mitigating solutions that UDIA would welcome include: 

  • Including the schedule of dates for all TOD sites in the TOD SEPP. Future changes could still be made through amendments to the SEPP, but this would at least offer a degree of certainty. 
  • Allow CHPs to sell any dwellings they receive under the SEPP and reinvest the proceeds into the development of their own new housing stock.  

“We encourage the Premier and the Minister for Planning & Public Spaces to closely monitor the uptake of the TOD program in the coming 12 months and commit to making improvements that will help improve development feasibility if it becomes clear it is not delivering as hoped,” said Gavin Melvin.


Media Enquiries:  Deanna Lane, Director, Media & Communications
UDIA NSW and National:  0416 295 898 or