Two Essential Fixes for NSW’s Low and Mid-Rise Housing Policy

The Low and Mid-Rise Housing (LMR) policies of the NSW Government are a good move but are undercooked. Compared to the Transit Oriented Development policies where economic feasibility is strong, according to the NSW Productivity Commissioner, the LMR has a weak feasibility rating and this will limit industry take-up. The authors probably intended a gentle approach to new low and mid-rise housing thinking local communities might be more supportive. However many councils are strongly against the LMR policy as their voters are happy in a lower density environment and don’t want any change. The Domain section of the Sydney Morning Herald listed, at June 2026, the average Sydney house at $1,733,891 while the average apartment is at $849,068–half the amount. Clearly the most affordable housing is now apartments and projections by demographers predict that half of all Sydney homes will be apartments within 30 years. But with councils against the LMR this dramatic change can only be achieved by a top down approach by the NSW Government. Local councils will complain but they do not represent the next generation of younger people looking to buy a home. At a time of rising costs in the building industry we need realistic planning rules that understand feasibility so that housing will actually be built. Here are two planning rules or policy changes that the state government should implement to improve the financial viability for Mid-Rise apartments. Firstly planning for mid-rise must be assessed as complying development based on a state government code. When I was CEO of the Urban Taskforce we developed, with Peter Smith, a two-page complying code for mid-rise housing that would lead to approvals in 30 days. In March 2026 the Victorian Government developed a Mid-Rise code as a set of deemed-to-comply rules for up to 6 levels. Their policy clarified that there is no third party right of review. If Victoria can have a strong deemed-to comply policy New South Wales should also go this way. The second policy change should be to increase heights in the mid-rise part of LMR from 6 levels to 8 levels. This will help balance the cost of underground parking and lifts that this apartment type will need to be feasible in the Sydney Market. Melbourne where the average apartment is only $587,137 compared to Sydney’s $849,068 may well make 6 levels feasible but Sydney’s higher costs will need greater height. Currently the NSW Pattern Book for mid-rise housing are undercooked in height with two designs up to 4 stories, One up to 5, and six up to 6 stories. These designs while being of high quality and less likely to upset council planners will however struggle with financial viability except in high priced markets. Sydney’s housing affordability, as measured by Demographia, is 14.0 times average income and well above the international target of 3.0. Major interventions by government are essential to begin making housing more affordable in Sydney and this means changes to the LMR code. Chris Johnson is a former CEO of the Urban Taskforce