Since 28 February 2025, multi dwelling housing (townhouses), terraces and manor houses have been permissible with consent in R2 Low Density Residential zones on land within 800 metres walking distance of a nominated town centre or train or light rail station across the Six Cities Region. The change was made through the Housing SEPP as stage 2 of the NSW Government’s Low and Mid-Rise Housing Policy. It came with non-discretionary development standards for lot size, height, FSR and parking that a council cannot use as grounds for refusal, and with a list of exclusions that removes hazard affected land, heritage items and four whole local government areas. A DA is still required and is still assessed on merit.
Key takeaways
- Stage 2 applies in Greater Sydney, the Central Coast, the Lower Hunter and the Illawarra-Shoalhaven, on residential land within 800 metres walking distance of 171 nominated town centres and stations.
- In those areas multi dwelling housing, terraces and manor houses are permitted with consent in R2, and residential flat buildings up to six storeys are permitted in R3 and R4.
- Non-refusal standards include a minimum lot size of 600 square metres for multi dwelling housing and 500 square metres with 18 metres width for terraces, with a 9.5 metre height and 0.7:1 FSR for both.
- Terraces attract a parking non-refusal rate of 0.5 spaces per dwelling; the standards only apply where they are more generous than the council’s LEP or DCP.
- Bushfire prone land, heritage items, flood planning areas in nominated councils, Transport Oriented Development areas and the Hawkesbury, Blue Mountains, Wollondilly and Bathurst LGAs are excluded.
What stage 2 actually changed
Before February 2025 a townhouse project in an R2 street depended entirely on the council’s LEP land use table, and most Sydney LEPs prohibited multi dwelling housing in R2. Stage 2 of the Low and Mid-Rise Housing Policy overrides that prohibition on land in a low and mid-rise housing area. The policy also inserts non-discretionary development standards into the Housing SEPP. Where an application complies with a non-discretionary standard, the consent authority cannot refuse on that ground, and the standard prevails over an equivalent LEP or DCP control where it is more generous. Where the local control is already more generous, the local control applies.
Stage 1, from 1 July 2024, had already made dual occupancies permissible in every R2 zone across NSW. Stage 2 is narrower geographically and broader in housing types.
Is my site in a low and mid-rise housing area
The test is walking distance, not a circle on a map. Land is in a low and mid-rise housing area if it is in a residential zone and within 800 metres walking distance of the boundary of a nominated town centre or of a nominated train or light rail station, measured along routes the public can use. The department has published an interactive map to help, and its FAQ page is clear that landowners need to check the legislation to confirm whether a specific property is in. We measure the walking route ourselves, because a site at 780 metres by one path and 850 metres by another needs the argument set out in the SEE.
The nominated centres include strategic and local centres across Western Sydney such as Blacktown, Mount Druitt, Penrith, Liverpool, Campbelltown, Parramatta and Bankstown, plus centres and stations across the Central Coast, Newcastle and Wollongong. Whether a particular centre is nominated is a matter of the legislation, so confirm it rather than assuming every shopping strip qualifies.
The standards for townhouses and terraces in R2
| Housing type | Zones in low and mid-rise housing areas | Minimum lot size and width | Height and FSR | Parking |
|---|---|---|---|---|
| Dual occupancy | R1, R2, R3, R4 | 450 square metres, 12 metres | 9.5 metres, 0.65:1 | 1 space per dwelling |
| Multi dwelling housing (townhouses) | R1, R2, R3 | 600 square metres | 9.5 metres, 0.7:1 | Council DCP rate |
| Multi dwelling housing (terraces) | R1, R2, R3 | 500 square metres, 18 metres | 9.5 metres, 0.7:1 | 0.5 spaces per dwelling |
| Manor house | R1, R2, R3 | Refer to the Housing SEPP | 9.5 metres, refer to the Housing SEPP for FSR | Refer to the Housing SEPP |
| Residential flat building | R3, R4 | Refer to the Housing SEPP | Up to 22 metres and 2.2:1 within 400 metres; up to 17.5 metres and 1.5:1 from 400 to 800 metres | Refer to the Housing SEPP |
These figures are taken from the department’s summary of key provisions. The legislation governs, and every figure should be checked in the current text before a feasibility is run on it.
What non-refusal does and does not mean
A non-discretionary standard removes one reason for refusal. It does not remove the assessment. Under section 4.15 of the Environmental Planning and Assessment Act 1979 the council still considers the DCP, the likely impacts, the suitability of the site and the public interest. A scheme at exactly 9.5 metres and 0.7:1 can still be refused for overshadowing, privacy, poor amenity or an unworkable driveway. What the council cannot do is refuse it because the LEP prohibits townhouses in R2, or because the DCP asks for a larger lot.
So the Statement of Environmental Effects carries more weight, not less. On townhouse DAs in these areas the argument is built around the DCP objectives for setbacks, landscaping, tree canopy and streetscape, because those are where a merit refusal would come from. The DCP you are assessed against may have been written before townhouses were contemplated in the zone, and a pre-lodgement meeting is worth the fee.
The exclusions that remove sites
The exclusions page lists the land the policy does not apply to. The ones that matter most in our service area:
- Bushfire prone land in vegetation categories 1, 2 and 3 and the buffer, which removes a large share of the Hills, the northern Central Coast and parts of Campbelltown and Camden near bushland.
- Heritage items listed in an LEP or on the State Heritage Register. Heritage conservation areas are treated differently from items, so check which applies.
- Flood planning areas in 22 nominated councils, plus probable maximum flood land in the Hawkesbury-Nepean and parts of the Georges River.
- Airport noise contours near the Western Sydney Airport and Bankstown, and Transport Oriented Development areas, which have their own rules.
- The whole of the Hawkesbury, Blue Mountains, Wollondilly and Bathurst local government areas.
An excluded site simply returns to the LEP and DCP, so a townhouse proposal there needs the use to be permitted under the council’s own land use table.
Where the reforms are most useful
From our work across Western Sydney and the Central Coast, the sites that benefit most are wide R2 lots within a comfortable walk of a station on the T1 Western line, older R2 streets around centres such as Blacktown, Seven Hills, Merrylands, Liverpool, Campbelltown and Gosford, and corner lots that suit terraces with rear lane or side access. The terrace standards are particularly workable on the 20 metre wide lots common in post war suburbs. Our development due diligence report maps the walking distance, the exclusions and the standards for a specific site before anyone commits to a design.
Frequently asked questions
Can I build townhouses in an R2 zone in NSW now?
Yes, if the site is in a low and mid-rise housing area, meaning residential land within 800 metres walking distance of a nominated town centre or station in the Six Cities Region, and the site is not excluded. Outside those areas, townhouses in R2 are only permitted where the council’s LEP allows them.
What are the low and mid-rise housing non-refusal standards for terraces?
A minimum lot size of 500 square metres, a minimum width of 18 metres, a maximum height of 9.5 metres, a maximum FSR of 0.7:1 and parking at 0.5 spaces per dwelling. Where the council’s LEP or DCP is more generous, the local control applies instead.
Is the 800 metres measured as the crow flies?
No. It is walking distance along routes the public can use, from the site to the boundary of the nominated centre or the station. A site that is 700 metres in a straight line can be more than 800 metres on foot if a railway line or creek forces a detour.
Does the policy apply on bushfire prone land?
No. Bushfire prone land in vegetation categories 1, 2 and 3 and the buffer area is excluded from the Low and Mid-Rise Housing Policy. The site returns to the council’s LEP and DCP, and any townhouse proposal there depends on whether the LEP permits the use.
URBA prepares the walking distance analysis, exclusion checks and the Statement of Environmental Effects for townhouse and terrace DAs under the reforms as part of our townhouse and multi-dwelling planning service across Sydney, the Central Coast, the Hunter and the Illawarra. If you own an R2 lot near a centre, request a fee proposal and we will tell you whether the policy reaches it.