The NSW Government says the low and mid-rise housing policy will unlock 112,000 new homes in five years. That number is no longer a forecast. The volume is hitting now.
But behind every one of those dwellings sits a certification pathway that someone has to manage. A building CDC. A subdivision CDC. Inspections. Conditions. Final sign-off. And the system that handles all of that is already under pressure.
This article covers how we got here, what the low and mid-rise housing policy NSW actually changed, where subdivision fits, and why private certifiers are now one of the most important links in the housing delivery chain.
A Brief History of the Low and Mid-Rise Housing Policy NSW
Stage 1: July 2024. Dual Occupancies Unlocked Statewide
The first stage of the policy started on 1 July 2024. It made dual occupancies and semi-detached homes permissible in R2 low-density residential zones across all of NSW. This was the statewide unlock.
Before this, many local councils had blocked dual occupancies through their Local Environmental Plans. The Housing SEPP 2021 overrode those local controls and opened up R2 land for two dwellings on a single lot.
Stage 2: February 2025. Terraces, Townhouses, and Apartments Near Transport
The second stage started on 28 February 2025. It introduced new planning controls for dual occupancies, terraces, townhouses, apartments, and shop-top housing within 800 metres walking distance of 171 nominated town centres and train stations.
This covered Greater Sydney, the Central Coast, Illawarra-Shoalhaven, and the Hunter. Blue Mountains, Hawkesbury, and Wollondilly were excluded due to bushfire and flood risk.
The amendment changed both the Housing SEPP 2021 and the Codes SEPP 2008, and introduced non-discretionary development standards that override local LEP and DCP controls.
The Mid-2025 Fix That Actually Unlocked the CDC Pathway
Here is where the story gets important for project delivery.
When Stage 1 dropped, Clause 164 of the Housing SEPP made dual occupancies permissible in R2 zones. But Clause 1.19(3B) of the Codes SEPP explicitly blocked the CDC pathway for any dual occupancy that was only permissible because of Clause 164.
In plain terms: the government said you could build a duplex, but then blocked the fast-track approval route to do it.
This was resolved from mid-2025, when the State inserted minimum lot sizes for dual occupancies into LEPs that had previously prohibited them. That made dual occ permissible under the LEP itself, not just via Clause 164, which unlocked the CDC pathway under the Codes SEPP.
By late 2025, the CDC pathway was flowing in the vast majority of LGAs. That is when the real volume surge began.
How the Legislative Framework Works for CDC Housing in NSW
Two SEPPs work together here. Understanding which one does what matters if you are a developer, planner, or Certifier trying to keep a project on track.
The Housing SEPP 2021 controls permissibility. It is the instrument that makes dual occupancies permissible in R2 zones (Clause 164) and sets non-discretionary development standards for subdivision (Clause 169).
The Codes SEPP 2008 controls the CDC pathway. Both the building CDC and the subdivision CDC are issued under the Codes SEPP, specifically Part 3B (the Low Rise Housing Diversity Code). This is where the development standards for complying development sit.
A Registered Certifier issues the CDC under the Codes SEPP. Not the Housing SEPP.
This distinction matters. It means the fast-track pathway, the one that gets approvals done in 20 days instead of months, lives in a different piece of legislation to the one that created the permissibility. That layering is what caused confusion from mid-2024 through to mid-2025.
What Does the Low and Mid-Rise Housing Policy Mean for Subdivision?
This is the part most people miss. Every dual occupancy and every terrace built under this policy will need a subdivision to create separate titles. No subdivision means no separate sale of individual dwellings.
Subdivision Is Now Clearly Permissible in LMR Areas
Subdivision of dual occupancies and terraces is now permissible in LMR areas, even where the LEP previously prohibited it. The Housing SEPP 2021 introduced non-discretionary development standards for subdivision under Clause 169, which prevents a consent authority from refusing subdivision if the standards are met.
Both Torrens title and strata subdivision and strata certificates are available. Strata subdivision also applies to manor houses and dual occupancies built one above the other.
Who Issues the Subdivision CDC?
A Subdivision Certifier in NSW issues the subdivision CDC under the Codes SEPP 2008. Not the Housing SEPP 2021.
The permissibility comes from the Housing SEPP. The approval instrument comes from the Codes SEPP. This means the entire pathway, building CDC plus subdivision CDC, runs through Registered Certifiers under the Codes SEPP. Councils are largely out of the loop for compliant projects.
Lot Size Rules Depend on the Approval Pathway
This is where the two-SEPP framework matters most.
For DA pathway subdivision, the non-discretionary standards under Clause 169 of the Housing SEPP 2021 apply. These require each resulting dual occupancy lot to have a minimum area of 225 square metres, a minimum width of 6 metres, lawful road access, and no battle-axe configurations. For terraces, the minimum is 165 square metres with a 6-metre width. These standards override local LEP or DCP controls unless the local provisions are more generous.
For CDC pathway subdivision, the lot size requirements fall back on the Codes SEPP 2008 for Torrens title dual occupancy subdivision under CDC, the minimum resulting lot size is either the minimum specified in the LEP for subdivision of a dual occupancy, or 200 square metres if the LEP does not specify one. For strata subdivision under CDC, the minimum strata area at ground level (excluding common areas) is 180 square metres.
Two different pathways. Two different sets of lot size rules. Getting this wrong can stall a project at the subdivision stage.
Where the Certification Bottlenecks Are Forming
The policy is working as intended. More sites qualify. More CDCs are being lodged. More subdivisions need to follow. But the certification system was not built for this volume.
Council DA Targets Are Tightening, But Capacity Is Not Keeping Up
The NSW Government has set housing completion targets for 43 councils across Greater Sydney and surrounding regions. Council DA determination timeframes are being ratcheted down from 115 days to 85 days by 2027, with $200 million in incentives tied to performance.
But the CDC pathway already delivers approvals in 20 days or less. For developers who want speed and certainty, the answer is not waiting for Councils to catch up. It is using the complying development pathway and working with Registered Certifiers who can turn projects around fast.
Why Registered Certifiers Are Now Critical to NSW Housing Supply
The entire CDC pathway, building approval and subdivision approval, runs through Registered Certifiers. Not Councils. For compliant projects under the low rise housing diversity code, a private Certifier can handle the full approval chain from start to title creation.
That makes Registered Certifiers one of the most important bottleneck-breakers in the system.
The point is not volume for its own sake. It is that the system now depends on private Certifiers to keep housing delivery on schedule. If your Certifier is slow, your project is slow.
How Does the Low and Mid-Rise Housing Policy NSW Affect Subdivision?
Every new dual occupancy and terrace built under this policy needs a subdivision to create separate titles. The policy introduced non-discretionary subdivision standards under the Housing SEPP 2021 (Clause 169) and enabled the subdivision CDC pathway through the Codes SEPP 2008. This means subdivision approvals can now be handled entirely by Registered Certifiers, without Council involvement, for compliant projects.
Can a Subdivision Certifier Issue a CDC Under the Housing SEPP 2021?
No. The subdivision CDC is issued under the Codes SEPP 2008, not the Housing SEPP 2021. The Housing SEPP provides permissibility (allowing dual occupancies and terraces to be built and subdivided). The Codes SEPP provides the approval instrument (the actual CDC). A Registered Subdivision Certifier issues the subdivision CDC under Part 6 of the Codes SEPP.
What Should You Do Next?
The low and mid-rise housing policy NSW has reshaped how housing gets delivered. The CDC pathway is live. Subdivision is permissible. And the volume is only going up.
If you are planning a dual occupancy, terrace, or medium-density project in NSW and want clear advice on the certification pathway, Southwell Certifiers can help. To discuss your project and receive a no-obligation fee proposal, contact us on (02) 8734 5676, email admin@southwellcert.com.au, or request a fee proposal.
