URBAN PROSPECTS BLOG - JAN 2026
Planning Reforms 2026: What Developers Need to Know
The NSW planning system is undergoing its most significant transformation in decades. With the Environmental Planning and Assessment Amendment (Planning System Reforms) Act 2025 now law and implementation rolling out through 2026, developers face a fundamentally different approvals landscape. Understanding these changes early will be critical for adjusting feasibility models and positioning projects to take advantage of new pathways.
A Rewritten Mandate for Planning
The reforms begin at the most foundational level: the objects of the Environmental Planning and Assessment Act 1979 itself. The amended legislation now explicitly promotes housing supply, including affordable housing, alongside economic productivity and climate resilience. Assessment frameworks should increasingly favour projects that demonstrably contribute to the Housing Accord target of over 377,000 homes by June 2029.
The Housing Delivery Authority Pathway
The Housing Delivery Authority is now enshrined as a permanent statutory body, formalising its role in fast-tracking major residential projects. Since early 2025, the HDA has recommended over 300 proposals for state significant development declaration, representing more than 102,000 potential homes.
Projects meeting threshold criteria bypass local council assessment entirely. In Greater Sydney, developments exceeding $60 million capital investment value are eligible; in regional NSW, the threshold is $30 million. The first project through this pathway achieved approval in seven months.
Key requirements include land tenure security, commitment to lodge within nine months of receiving Secretary's Environmental Assessment Requirements, capability to commence construction within 12 months of approval, and affordable housing contributions.
Development Coordination Authority: One Front Door
From July 2026, the Development Coordination Authority will centralise referrals and advice across up to 14 government agencies. Rather than coordinating responses from Rural Fire Service, Transport for NSW, and other approval bodies independently, developers will engage with a single authority that can exercise functions as if it were the approval body itself.
Feasibility models should account for reduced holding costs, though developers should anticipate an adjustment period as the new system beds down.
Targeted Assessment Development: The New Middle Ground
The reforms introduce a targeted assessment development pathway designed to bridge complying development and full development applications. Development types declared under a SEPP as targeted assessment development will benefit from significantly reduced assessment requirements, with 50-day approval timeframes targeted.
Consent authorities cannot consider certain matters when assessing these applications, including significant likely impacts, site suitability, and public interest in the conventional sense. This pathway suits development where strategic planning and community consultation has already occurred at the precinct level. Pattern book developments outside the TODs and LMR areas are expected to be among the first candidates.
Expanded Complying Development
The complying development framework is expanding substantially. New variation certificate mechanisms allow variations to complying development standards, with applications deemed approved within ten days if not determined.
The Pattern Book Development Code and Low and Mid-Rise Housing Policy mean many housing typologies previously requiring full development applications can proceed with significantly less regulatory friction. For sites within 800 metres of nominated town centres and train stations, dual occupancies, terraces, townhouses, and apartments up to defined heights can be assessed against non-discretionary standards that consent authorities cannot refuse.
Mandatory Affordable Housing Contributions
The draft Sydney Plan proposes making affordable housing contribution schemes mandatory for all councils. Developers should factor expanded requirements into feasibility calculations, though projects using the in-fill affordable housing bonus scheme that include 10 to 15 percent affordable housing can access floor space ratio bonuses of 20 to 30 percent.
Housing and Productivity Contributions continue across designated regions, with Western Sydney Aerotropolis transitioning into the scheme by July 2026.
Regional Planning Panel Abolition
The reforms phase out Sydney district and regional planning panels, redirecting decision-making primarily to local planning panels. The removal of the regionally significant development pathway shifts more projects to either local council assessment or, for larger proposals, the HDA pathway.
Strategic Planning: The Sydney Plan
The draft Sydney Plan, on exhibition until 27 February 2026, establishes the framework for housing and employment growth across 33 local government areas. Key elements include rebalancing housing growth toward locations with high accessibility to jobs and services, protecting industrial lands, and aligning infrastructure with planned growth.
Developers should review the draft plan's implications for their landholdings, particularly maps showing where infill development will be prioritised.
Adjusting Feasibility Assumptions
The cumulative effect of these reforms requires developers that are looking for development sites for sale in Sydney to revisit standard feasibility assumptions. Approval timeframes for projects using new pathways should decrease materially, reducing holding costs. However, affordable housing requirements and infrastructure contributions may offset some savings.
Land acquisition strategies should account for enhanced development potential in low and mid-rise housing areas and transport-oriented development precincts. Sites previously constrained by local planning controls may now offer substantially higher yields.
Projects eligible for HDA declaration face a strategic choice between the streamlined state pathway and traditional council assessment. The HDA pathway offers speed and certainty but imposes strict commencement timeframes that may not suit all financing structures.
The message from government is clear: NSW needs more homes, faster. Developers who understand and adapt to this new environment will be best positioned to capitalise on the opportunities it creates.
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