NSW Department of Planning and Environment

Environmentally sustainable housing choices

Population growth and the associated increase in new homes is influenced by the lifestyle available within commuting distance of Canberra and Sydney, the development of vibrant strategic centres and the amenity of coastal communities. Seventy per cent of the region’s population growth to 2036 is projected to occur in the areas that share a border with the ACT.

Tourism will also influence housing demand, with growth in holiday lettings expected along the South Coast and the Snowy Mountains.

At least 28,500 new homes will be needed by 2036 to meet population growth and change. Providing the land and the infrastructure to meet this demand is central to this Plan. New housing must be located to take account of the character, environmental and agricultural qualities and capacity of the land, with an emphasis on residents access to services, jobs and transport.

The South East and Tablelands will continue to offer a variety of housing options from urban lifestyles in regional centres with shops, restaurants and services, to rural residential, coastal and alpine lifestyles.

south east and tablelands goal 3 nsw commuters to act 571x1476

Direction 24: Deliver greater housing supply and choice

Having a ready supply of well located land for residential development will create downward pressure on house prices, maximise the use of existing infrastructure and protect environmentally sensitive areas.

Local housing strategies prepared by councils are the first step in identifying housing needs and planning for a range of housing types. These strategies enable communities to assess the broader implications and consequences of identifying locations for proposed new housing. They also help identify the infrastructure needed to support local communities.

Local housing strategies need to consider community aspirations. They must be flexible and responsive to shifts in local housing markets for both greenfield and infill developments, and deal with unforeseen constraints, including uneven rates of development or unexpected population growth.

These strategies should plan for a range of housing choices, including retirement villages, nursing homes and opportunities to modify existing dwellings to enable people to stay in their homes as they age.

The strategies should be consistent with Settlement Planning Principles that align with the Memorandum of Understanding between the NSW and ACT Governments. These will be complemented by guidelines for local housing strategies that will assist councils when undertaking local strategic planning.

Existing planning strategies show there is enough zoned land with development potential for the market to supply housing in a range of locations. There are opportunities for Wingecarribee and Queanbeyan-Palerang local government areas to review their capacity to provide an ongoing supply of land for both greenfield and infill development.

Greater housing choice in existing centres is needed to cater for the decrease in the average household size. Planning will need to cater for a rise in the number of single person households, a decrease in the number of occupants in each household, more affordable housing, the needs of tourists and an ageing population.

Focusing growth in existing centres rather than isolated land releases is a sustainable option because it takes advantage of existing job markets, commercial and retail opportunities, and infrastructure such as public transport.

Settlement Planning Principles

Local housing strategies focus on urban areas where residents can access services, jobs and transport. Some strategies will need to acknowledge connections to Canberra as a location for higher-order services and employment.

Decisions around the most suitable locations for new housing must consider the compatibility of land uses, as well as the availability of road connections and service infrastructure. Other considerations include:

  • avoiding or mitigating the impacts of hazards, including the implications of climate change;
  • protecting areas with high environmental value and/or cultural heritage value and important biodiversity corridors;
  • identifying a sustainable water supply;
  • protecting the region’s water supply and the environmental qualities of rivers and streams;
  • considering the impact of aircraft noise;
  • protecting areas that contain important resources and minimising the potential for land use conflict;
  • protecting important agricultural land to capitalise on its potential to produce food and fibre now and in the future; and
  • identifying and designing new neighbourhoods so they are environmentally sustainable, socially inclusive, easy to get to, healthy and safe.


24.1 Prepare guidelines for local housing strategies.

24.2 Prepare local housing strategies consistent with the Settlement Planning Principles to provide a surplus supply of residential land to meet projected housing needs.

24.3 Promote increased housing choice, including townhouses, villas and apartments in strategic centres and locations close to existing services and jobs.

24.4 Promote opportunities for retirement villages, nursing homes and similar housing for seniors in local housing strategies.

Direction 25: Focus housing growth in locations that maximise infrastructure and services
Pressure for housing in NSW is driven by ACT policies for more compact settlement and housing affordability. Demand for lower density or semi-rural housing in NSW is leading to development proposals that are inconsistent with current planning strategies in areas close to the SW-ACT border – mostly within Yass Valley Local Government Area. These proposals could undermine sustainable urban outcomes from identified new urban areas and place undue pressure on infrastructure capacity.


New growth areas located away from established areas will only be supported where it is demonstrated that supporting infrastructure will be delivered and development will not undermine the approach to growth identified in the relevant local housing strategy.

Development proposals that are inconsistent with current planning strategies will be required to show how they meet the Settlement Planning Principles and:

  • achieve sustainable urban outcomes that do not undermine existing strategic and local centres;
  • resolve servicing and access issues with a particular focus on water availability and servicing; and
  • are of sufficient scale and capacity to provide infrastructure at no cost to government.


25.1 Focus future settlement to locations that:

  • maximise existing infrastructure and services and minimise the need for new services;
  • prioritise increased densities within existing urban areas; and
  • prioritise new release areas that are an extension of existing strategic and local centres.

25.2 Plan for and prioritise services and infrastructure investment to maximise cost efficiencies, coordinate the delivery of different infrastructure assets, and achieve equitable sharing of responsibility, including funding, procurement and ongoing maintenance.

Direction 26: Coordinate infrastructure and water supply in a cross-border setting

Demand and supply of land and housing in the ACT and surrounding areas are inter-related. They operate within the same housing market. This has implications for infrastructure, water supply and service delivery by both jurisdictions.

The population of the Yass Valley and Queanbeyan-Palerang local government areas is expected to grow to 109,600 by 2036, which will require 15,050 new dwellings – more than 50 per cent of the region’s projected dwelling demand. These councils have indicated that existing release areas have capacity for almost 18,000 new dwellings in places such as Googong, South Jerrabomberra, Yass, Murrumbateman and the proposed cross-border development at Parkwood.

Coordinating the funding and delivery of infrastructure in a cross-border setting requires cooperation between jurisdictions and an understanding of their different governance and budgetary structures. Further work is required to create a consistent approach to infrastructure funding and delivery.

The availability of water will continue to drive or limit the amount and location of urban development. Significant work on the provision of water from the ACT will service the proposed development at Parkwood. However, future growth that requires the support of the ACT water and wastewater network would be subject to negotiations that may involve:

  • sustainable diversion limits;
  • trading of water entitlements;
  • a bilateral agreement between jurisdictions requiring Cabinet endorsement; and
  • a commercial agreement with Icon Water Limited that will require consideration of its business model, business cases for development and competing servicing priorities.

A cross-border land and housing monitor will better track and forecast housing and employment land releases. This will improve information about supply and demand and the infrastructure and service implications arising from growth, particularly in locations close to the ACT.

Water supply in the Yass Valley and Queanbeyan-Palerang local government areas

Water is supplied to Queanbeyan by the ACT Government under the terms of the Queanbeyan Water Supply Agreement (2008). In the case of Yass Valley and parts of Queanbyean-Palerang local government areas, water supply is managed by each council under the Water Management Act 2000 and relevant water sharing plans.

The supply of water and sewer services in the ACT is driven by demand and provided by Icon Water. Icon Water is a Territory-owned corporation that delivers water to the ACT and Queanbeyan under the Queanbeyan Water Supply Agreement.

The Yass Dam is the main storage area for the Yass Valley Local Government Area. The dam wall has been raised to increase capacity. A pipeline from Yass to Murrumbateman is proposed to provide reticulated water to service the first stages of urban growth at Murrumbateman. Further growth of Murrumbateman will require support from the ACT for the provision of water. There is also demand for development in Bungendore, which must consider how to secure long-term water supplies.

Icon Water supports cross-border cooperation in water and sewerage matters. This includes mutual information sharing (resources, knowledge and capabilities) between Icon Water and councils, particularly Snowy Monaro, Queanbeyan-Palerang and Yass Valley local government areas.


26.1 Coordinate the provision of services and infrastructure required to support housing delivery in the Yass Valley and Queanbeyan-Palerang local government areas, including South Jerrabomberra and Parkwood.

26.2 Develop an agreed set of principles to inform a new cross-border infrastructure funding model.

26.3 Develop a regional water strategy for the Yass Valley and Queanbeyan-Palerang local government areas that clarifies the requirements, available volumes and quality of all water supplies and defines the optimal level of water use.

26.4 Enhance cross-jurisdictional collaboration to develop a coordinated strategic approach to water supply and investigate water supply options for growth areas.

26.5 Work with the ACT Government to develop a cross-border land and housing monitor.

Direction 27: Deliver more opportunities for affordable housing

Appropriate planning controls and incentives that can help deliver affordable housing include:

  • affordable housing contributions to fund the provision of new housing by community housing providers;
  • planning and development controls to facilitate affordable housing development by local community housing organisations.

Incentives to influence housing affordability include planning incentives, such as increases in density, and new generation boarding houses and secondary dwellings, such as granny flats.


27.1 Deliver greater housing affordability by incorporating policies and tools into local housing strategies and local planning controls that will enable a greater variety of housing types and incentivise private investment in affordable housing.

27.2 Facilitate greater housing diversity, including studios and one- and two-bedroom dwellings, to match forecast changes in household sizes.

Direction 28: Manage rural lifestyles

Local housing strategies are the first step in identifying rural residential housing needs and understanding local supply. They also identify the infrastructure needed to support rural communities.

Rural residential development can conflict with environmental and agricultural lands, and impact water catchments due to the proliferation of dams and bores. Water supply to these developments, especially in stressed river catchments, has led to a water licensing embargo in the Yass River valley in the past.

Rural residential housing in areas of intact bushland presents bushfire risks. The clearing for house sites, bushfire asset protection and associated infrastructure, particularly local roads, has led to high clearing rates. Clearing associated with rural residential subdivision is currently the major source of vegetation removal in the South Coast and Southern Tablelands.

A consistent planning approach will identify suitable locations for new rural residential development that avoids fragmentation of productive agricultural land and lessens the impact on high environmental value assets, cultural and heritage assets, or areas with important rural landscapes. Rural residential development should not increase pressure on infrastructure and services, and should be located on land free from natural hazards.


28.1 Enable new rural residential development only where it has been identified in a local housing strategy prepared by council and approved by the Department.

28.2 Locate new rural residential areas:

  • close to existing urban settlements to maximise the efficient use of existing infrastructure and services, including roads, water, sewer and waste services, and social and community infrastructure;
  • to avoid and minimise the potential for land use conflicts with productive, zoned agricultural land and natural resources; and
  • to avoid areas of high environmental, cultural and heritage significance, important agricultural land and areas affected by natural hazards.

28.3 Manage land use conflict that can result from cumulative impacts of successive development decisions.

Page last updated: 28/07/2022