TOD SEPP 2024: What the Reforms Mean for Sydney Infill Developers

If you have been watching site values around Sydney’s rail and metro stations this year, you already know something significant has happened. In May 2024 the NSW Government switched on a set of state planning controls that, in one stroke, made residential flat buildings permissible on thousands of lots that were previously locked into low-density zoning. The Transport Oriented Development program — usually shortened to the TOD SEPP — is the biggest change to infill development permissibility in a generation, and it is still rolling out precinct by precinct as we head into 2025.

For builders and developers used to the duplex-and-townhouse end of the market, the TOD reforms open a genuinely different opportunity: taking a house lot, or an amalgamated run of them, from a single dwelling to a six-to-eight storey apartment building. But the planning permissibility is only the first gate. The sites these controls unlock are old suburban streets that were never engineered for that density, and the difference between a feasible TOD project and an expensive lesson is usually found in the civil and stormwater detail. This article covers what the TOD SEPP does, the standards that matter, and the engineering questions to ask before you sign a contract.

What the TOD SEPP is and why it exists

The TOD program is the NSW Government’s response to a housing supply crisis that has been building for more than a decade. The policy logic is straightforward: the state has spent billions on metro and rail infrastructure, yet much of the land around those stations has remained zoned for detached houses. “Well-located homes” became the catch-cry: put more housing where the transport, jobs and services already are.

Mechanically, the TOD program works by amending the State Environmental Planning Policy (Housing) 2021. Because it is a state policy, it sits above local environmental plans: where the TOD controls apply, they change what is permissible and set key development standards regardless of what the council’s LEP previously said. Councils still assess the development applications — this is not a fast-track approval pathway — but the permissibility question is answered at state level.

Tier 1 and Tier 2: two very different programs

The TOD program has two tiers, and it pays to be precise about which one you are dealing with, because they work quite differently.

Tier 2: the TOD SEPP station precincts

The Tier 2 controls commenced on 13 May 2024, initially applying to 18 station precincts, with the program covering 37 metro and rail stations in total. The remaining stations are being switched on progressively, so the live question for any given site is not “is my station on the list” but “have the controls commenced for my station yet”. The controls apply to land identified on the TOD sites map — generally land within around 400 metres of the nominated stations, though the mapped boundary is what governs, not a compass circle.

Within mapped TOD land, the headline changes are:

Residential flat buildings and shop-top housing become permissible in the R1, R2, R3 and R4 residential zones, and in certain employment and centre zones.
Maximum building height of 22 metres — enough for roughly six to eight storeys depending on floor-to-floor heights and design.
Maximum floor space ratio of 2.5:1.

The significance of the zoning change is hard to overstate. An R2 lot near a nominated station that could previously support a house, and perhaps a dual occupancy, can now lawfully be the subject of a DA for a residential flat building at 22 metres and 2.5:1. That is a step change in development yield, and it is why land values inside the mapped areas moved quickly.

Tier 1: the Accelerated Precincts

Tier 1 is a different beast. Rather than a uniform set of controls, it comprises eight Accelerated Precincts — Bankstown, Bella Vista, Kellyville, Crows Nest, Homebush, Hornsby, Macquarie Park and Bays West — where the government is undertaking precinct-scale rezonings planned to deliver around 60,000 homes. These rezonings involve bespoke controls for each precinct, typically supporting greater height and density than the Tier 2 standards. Rezonings for seven of the eight precincts are commencing in late November 2024 — on 27 November — with Bays West to follow.

The government has also committed $520 million for community infrastructure in the accelerated precincts — roads, open space, community facilities — recognising that density at this scale needs servicing. For developers, Tier 1 precincts are where the largest projects will land, but they also come with precinct-specific controls that need to be read carefully once the rezonings take effect.

One further wrinkle: some councils have sought to substitute their own alternative local schemes in place of the state controls, and the government has indicated it may allow equivalent local controls over time — so always confirm what instrument actually applies to your site on the day you lodge.

The affordable housing requirement

The TOD SEPP is not density for free. Where a residential flat building or shop-top housing development in a TOD area exceeds 2,000 square metres of gross floor area, at least 2% of that GFA must be provided as affordable housing, managed by a registered community housing provider in perpetuity.

Two points for your feasibility model. First, “in perpetuity” means exactly that — this is not the 10-to-15-year arrangement used in some other affordable housing schemes; the floor space is permanently dedicated. Second, the 2,000 square metre trigger means almost any project that genuinely uses the 2.5:1 FSR on an amalgamated site will be caught. On a modest 1,000 square metre amalgamation at full FSR you are already at 2,500 square metres of GFA. Price the 2% in from day one rather than discovering it at assessment.

What it means for site selection and feasibility

Permissibility is necessary but nowhere near sufficient. The sites the TOD SEPP unlocks are typically 550 to 750 square metre house lots, and a viable residential flat building generally needs more width and depth than one lot provides once you account for setbacks, deep soil, communal open space and an efficient basement. That drives a few practical realities:

Amalgamation is usually the game. Two, three or four adjoining lots produce a dramatically better building envelope than one. The developers doing well are the ones quietly assembling options across adjoining owners, not paying apartment-site prices for a lot that cannot deliver one.
Existing strata is a trap. A lot already occupied by a strata-titled duplex, villa or small unit block requires the agreement of the owners corporation and, in practice, most or all owners to redevelop. Collective sale processes exist but are slow and contested. A tired house on a big lot is worth more as a TOD site than a newer strata building next door.
The 400 metre edge is binary. A site 380 metres from the station may carry TOD controls; the lot two doors up may not. Never rely on a scaled aerial photo — check the TOD sites map for the specific parcel, and confirm the controls have actually commenced for that station.
Not every mapped lot is a good lot. Heritage items, flood-affected land, odd geometry, and orientation all still matter. The SEPP changes what is permissible; it does not make a bad site good.

The engineering gap: from house lot to eight storeys

Here is where projects are won or lost. The streets inside most TOD precincts were subdivided and drained fifty to a hundred years ago for detached houses. Taking a site from one dwelling to sixty apartments multiplies the demands on that infrastructure, and council engineers know it. Expect the drainage and civil questions to be front and centre at DA.

Stormwater capacity and the legal point of discharge

Older suburban streets often have undersized or fragmented pit-and-pipe drainage — sometimes nothing more than kerb and gutter. Before you commit to a site, establish where the legal point of discharge is and whether the receiving system has any capacity. If your site falls away from the street, you may be looking at a drainage easement over downstream private land — a negotiation that can take months, cost real money, and in the worst case cannot be secured at all. A drainage feasibility check costs a fraction of a due diligence budget and can kill or confirm a site in weeks.

On-site detention in the basement

Council DCPs will almost invariably require on-site detention (OSD) to limit post-development flows, and on a fully built-out TOD site the only place for it is usually the basement — a below-ground tank with a pump-out system, or storage integrated with the basement structure. That has flow-on consequences: tank volume competes with car parking, pump systems need mechanical design and ongoing maintenance obligations, and the whole arrangement must be resolved early because it shapes the basement layout — retrofitting OSD into a finished basement design is painful and expensive.

Flood behaviour

A surprising number of station precincts sit near creeks or overland flow paths — stations were historically built on flat, low ground. A flood check against council’s flood studies should be one of the first due diligence steps: flood planning levels can dictate basement crest levels, habitable floor levels and driveway design, and in overland flow paths they can constrain where the building can sit at all.

Geotechnical and basement excavation

A one-to-two level basement on an amalgamated site means bulk excavation close to neighbouring dwellings and the road reserve. Geotechnical investigation, shoring and anchoring design, dilapidation surveys, groundwater assessment and dewatering strategy all belong in the feasibility, not the construction phase. Rock at shallow depth changes excavation cost dramatically; high groundwater changes the OSD and tanking strategy.

Sediment and erosion control on tight sites

Finally, do not underestimate the humble erosion and sediment control plan. On a tight infill site with zero lay-down area, managing sediment, wheel wash and dewatering discharge to a live street drainage system is difficult, and councils in the TOD precincts are policing it. It is a design task, not a line item.

Risks to keep on the radar

The controls will keep evolving. Stations are being switched on progressively, councils may substitute equivalent local schemes, and the government has shown it will refine the settings. Confirm the current controls for your site at the time you commit, not from a six-month-old article — including this one.
Permissible does not mean approvable. Design excellence, apartment design guidance, deep soil, solar access and all the usual RFB assessment layers still apply, along with council DCP requirements where not inconsistent.
Construction cost reality. Six-to-eight storey construction with basements is a different cost regime from townhouses. Feasibilities built on project-home rates will mislead you.
Servicing beyond stormwater. Water, sewer and electrical capacity in old streets can require amplification works — ask the questions early.

Planning strategy matters as much as engineering on these projects. Within our group, URBA handles the town planning and DA advice that sits alongside our civil design.

Frequently Asked Questions

Which stations does the TOD SEPP apply to?

The program covers 37 metro and rail stations in total. The Tier 2 controls commenced on 13 May 2024 for an initial 18 station precincts, with the remaining stations being switched on progressively. Separately, eight Tier 1 Accelerated Precincts — including Bankstown, Bella Vista, Kellyville, Crows Nest, Homebush, Hornsby, Macquarie Park and Bays West — are being rezoned under their own precinct plans. Because the list is staged and councils may substitute local schemes, always check the TOD sites map and confirm the current controls for your specific parcel.

Can I build apartments in an R2 zone now?

On land identified on the TOD sites map, yes — residential flat buildings and shop-top housing are permissible with consent in R1, R2, R3 and R4 zones (and certain employment and centre zones), with a maximum height of 22 metres and maximum FSR of 2.5:1. Outside the mapped TOD land, the underlying zoning rules continue to apply, so an R2 lot 500 metres from the station generally gains nothing from the SEPP.

What is the affordable housing requirement?

Where a residential flat building or shop-top housing development in a TOD area exceeds 2,000 square metres of gross floor area, at least 2% of the GFA must be affordable housing, managed by a registered community housing provider in perpetuity. Most projects that make full use of the 2.5:1 FSR on an amalgamated site will exceed the trigger, so build the requirement into your feasibility from the outset.

Does the TOD SEPP remove council stormwater requirements?

No. The SEPP changes permissibility, height and FSR — it does not touch council engineering requirements. Your DA will still be assessed against the council’s DCP drainage controls, including on-site detention, water quality treatment, and a lawful point of discharge. On old suburban streets these are often the hardest constraints on the project, which is why we recommend a drainage feasibility assessment before purchase, not after.

Thinking about a TOD site? Get the civil picture first

Contrive Consultants are civil and stormwater engineers based in Rouse Hill, working with builders and developers across Greater Sydney’s growth and infill areas. Before you commit to a TOD site, we can run a drainage feasibility check — legal point of discharge, OSD strategy, flood exposure and easement risk — and then carry the project through DA-stage civil and stormwater design. Explore our civil and stormwater services or get in touch on +61 497 848 111 or info@contriveconsultants.com.au to talk through your site.