Housing Australia’s ageing population: new SEPP impacts growth opportunity

What’s new?

1. Permissible in Prescribed Zones, with limitations
2. ILUs have a new definition; not allowed in R2 zone
3. New non-discretionary development standards
4. Changes to vertical villages site size and bonus
5. New SSD approval pathway

Zone restrictions create uncertainty

Senior’s housing will be permissible in all zones (except industrial and rural zones) with some limitations. Of significance:

• Independent Living Units (ILU) will not be allowed in R2 low density Residential zones.

This will significantly limit the opportunity for new low-rise development and housing diversity. Moreover, it will force existing projects in the zone to rely upon existing use rights or rezoning to undertake any upgrades or expansion.

• Development on sites that are registered clubs in RE2 Private recreation zones must have at least 50% of the site adjacent to residential land.

Clubs may often be located adjacent to non-residential land (such as other open space areas or commercial land) yet are still ideally located to provide seniors housing opportunity proximate to services and within desirable settings.

• The definition of Environmentally Sensitive land, where development is not allowed, introduces new restrictions.

One new area where seniors housing will not be allowed includes any land identified in Council LEPs as a flood planning area.

Reduced sites for ILUs

One of the aims of the new Housing SEPP is to ensure an adequate supply of diverse housing types to meet the changing needs of people. 

Under current provisions, ILUs are permissible and commonly developed in R2 zones. The proposal to prohibit them will reduce a significant opportunity for downsizing and ageing in place, as well as for co-locating with residential care facilities (which will be permissible in an R2 zone). 

Relying on ‘Existing use Rights’

Many existing ILU ‘retirement villages’ are in R2 zones, and many are approaching an age requiring upgrade or replacement. Any future ILUs will rely on existing use rights and old planning controls.

Bonus Incentives may be ineffective

It can be difficult for seniors housing to compete against conventional residential development. Therefore, the provision of zoning flexibility and an effective bonus system is critical to allow the availability of sites in highly accessible locations. 

The proposed bonus FSR and height provisions only apply in zones where RFBs are permissible. Many local councils do not permit RFBs in B3, and B4 zones, usually town centre or high-density areas with good access to transport and services. Therefore, the bonus provisions are not available in these zones- arguably the locations where vertical and denser formats are most appropriately located.

A lost opportunity in the ‘Inner Ring’

The minimum 2000 sqm site area threshold for vertical village bonuses presents significant constraints for site availability near and within town centre locations within inner urban locations. Coupled with the methodology for providing floorspace incentives, the two provisions together limit real advantage of encouraging seniors housing development.

Given the average lot sizes within these areas, amalgamation of sites would need to occur to achieve the bonus. This situation will also have an effect of driving up land prices, impacting affordability.

State Significant Development Pathway

It is encouraging to note that a state significant development (SSD) pathway is available for residential care facilities with a CIV of at least $30 million. This provides better agency coordination, certainty and approval timeframes.

_{Photo by Eduardo Barrios on Unsplash}