A complying development variation process and a new Targeted Assessment Pathway are now out for consultation. If they get up, the average DA wait for low-rise homes could be cut in half. Here is what builders need to know.

If you have ever watched a straightforward housing project sit in council for the better part of a year because it missed one complying development standard, this one is worth paying attention to.

The NSW Government has released two significant planning reform proposals for public consultation, both aimed at cutting assessment times for low-rise residential development. The proposals are now on exhibition and are open for feedback until 24 June 2026.

Together, they target what planners and builders have long identified as a structural gap in the NSW planning system: the cliff between complying development and a full development application.

The Gap That Has Cost Builders Time and Money

Complying development already exists as a fast-track pathway for low-risk housing projects that meet all relevant development standards. In ideal conditions, it can be turned around in as little as 20 days.

The problem is the binary nature of the system. Under the current rules, a proposal that fails to meet even one development standard for complying development is required to go through a full DA process. That means an average of around 80 days, additional documentation, council resources, and cost.

For builders, this is not a theoretical issue. A minor setback breach, a marginal height variation, or a boundary dimension that falls just outside the standard can push an otherwise straightforward home build into a process designed for far more complex developments.

A minor setback breach can push an otherwise straightforward home build into a process designed for far more complex developments. These proposals address that directly.

The proposals released this week address both of these pressure points directly.

Pathway One: Variations to Complying Development

The first proposal would allow straightforward projects with a small number of minor departures from development standards to use the existing 20-day complying development pathway, rather than being defaulted to a full DA.

The detail of what qualifies as a minor departure has not yet been finalised. That is part of what the consultation process is designed to establish. But the intent is clear: end the all-or-nothing nature of complying development eligibility for low-risk, low-impact residential proposals.

For builders working on single dwellings, dual occupancies, and similar low-rise projects, this could remove one of the most frustrating variables in project planning. Instead of discovering a compliance gap late in the design process and resetting the timeline, a minor variation would allow the fast-track pathway to remain available.

Pathway Two: The Targeted Assessment Pathway

The second proposal is a new Targeted Assessment Pathway, described as a bridge between complying development and a full DA.

Under this framework, a new low-rise housing code would allow applications that do not meet the test for complying development but have satisfied set strategic planning requirements upfront to be assessed within a target timeline of 50 days. That is roughly half the current average for a standard DA.

The pathway is intended to apply to the housing types that make up most of the residential market: single dwellings, terraces, and townhouses.

The logic is proportionate assessment. Not every project that falls outside complying development criteria belongs in the same queue as a complex mixed-use development or a heritage-sensitive proposal. The Targeted Assessment Pathway would create a middle tier matched to the actual complexity of low-rise housing.

The Targeted Assessment Pathway would create a middle tier matched to the actual complexity of low-rise housing. Fifty days, not eighty. That matters in a market where time is money.

The Enabling Legislation Behind the Proposals

These changes did not emerge from thin air. Both pathways have been enabled by the NSW Planning System Reform Bill, which passed Parliament in November 2025 with broad cross-party support including backing from the NSW Liberals and Nationals.

That legislative foundation matters for builders assessing how seriously to take these proposals. The policy groundwork has already been done. The consultation process is about how these pathways are designed and staged, not about whether they proceed at all.

The proposals also build on existing NSW Government work to facilitate more terraces, townhouses, and single dwellings through the Low and Mid-Rise reforms and the NSW Pattern Book, which has already demonstrated that pre-assessed design pathways can dramatically reduce approval times.

What This Means for Builders on the Ground

The residential construction pipeline in NSW is shaped heavily by approval timelines. For builders and developers working on low-rise projects, time in the assessment queue is not just an administrative inconvenience. It is a direct cost input.

Holding costs accumulate during assessment periods. Finance facilities start running. Site conditions can change. Trades booked in advance face uncertainty. The longer a project sits waiting for an approval that should be straightforward, the more the economics of that project shift.

If the Targeted Assessment Pathway reduces average assessment times from 80 days to 50 days for eligible projects, that is a meaningful reduction in carrying cost and schedule risk for builders managing multiple live projects.

The complying development variation proposal operates at an earlier stage of the project lifecycle, potentially preventing the assessment blowout before it happens. For builders doing design work upfront, knowing that a minor departure from one standard does not automatically trigger a full DA changes how projects can be structured.

What 70 Per Cent Actually Represents

The NSW Government has noted that low-rise homes account for 70 per cent of all development applications in the state. That proportion matters.

Planning reform that touches the assessment pathway for 70 per cent of the DA system is not a marginal improvement. It is a structural shift in how the state processes residential growth.

For builders who operate across multiple sites, multiple council areas, and multiple project types, the compound effect of faster assessment times across a portfolio of low-rise projects is significant. Fewer days in approval means more predictable project scheduling, better trade and supplier coordination, and stronger cash flow management.

The Consultation Window

Both proposals are available on the NSW Planning Portal and remain on exhibition until 24 June 2026.

The discussion paper on the Targeted Assessment Pathway is designed to be read by builders, developers, councils, and community members. Feedback will directly inform how these pathways are designed and rolled out.

For builders who regularly navigate the NSW planning system, this is a genuine opportunity to shape how these reforms are structured. The timeframe for a minor departure from a complying development standard, the types of projects eligible for the targeted pathway, and the sequencing of rollout are all areas where industry input will carry weight.

These are not proposals being handed down from above. They are frameworks being built in consultation with the people who use the planning system every day.

Have your say on the NSW Planning Portal before 24 June 2026.

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General information only. This article does not constitute planning or legal advice. Builders and developers should seek professional advice specific to their projects and circumstances.

Author: TGB Editorial