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What is the aim of Transport Oriented Development (TOD) zones?

The TOD concept was introduced by the NSW Labor Government in 2024 to increase housing around selected NSW train stations.  This, amongst other initiatives, is designed to try and alleviate the housing crisis.

According to the NSW Government's website https://www.planning.nsw.gov.au/policy-and-legislation/housing/transport-oriented-development-program, a TOD is defined as per the screenshot below:

Where are the TOD zones?

The TOD zones apply within 400m of 39 train stations throughout Sydney, Newcastle, Central Coast and Wollongong.

In Newcastle there are 9 impacted train stations as shown on the following image (source image/data courtesy of Archistar):

The web page below lists all of the TOD train stations in NSW:

https://www.planning.nsw.gov.au/policy-and-legislation/housing/transport-oriented-development-program/transport-oriented-development

How could this impact housing?

Within the TOD 400m radius, there is allowance for various planning controls including:

1. Residential flat buildings in residential zones and local centre zones, along with shop top housing in local centre and commercial zones.
2. A 22 m height for residential flat buildings to maintain design standards.
3. A maximum Floor Space Ratio of 2.5:1. This allows for buildings of up to 6 storeys while providing for good design outcomes in relation to landscaping, building setbacks, privacy and open space.
4. Introduction of a minimum lot width of 21 m and no minimum lot size.
5. A 2% mandatory affordable housing contribution, delivered onsite and in perpetuity for developments with a minimum Gross Floor Area of 2000 m².

The ultimate goal of this is to enable the development of denser housing (and supporting commercial/retail) around the TOD train stations; doing so in a way that is sustainable and addresses the social and affordable housing needs.

Implemented per its intention, this will increase the housing density in these areas but could also dramatically change the vibe, look and feel of some suburbs.  Depending on who you ask of course, this could be for the better... or worse.

Should I invest or buy in or near a TOD?

Like any question about investing, it always comes down to the individual's personal circumstances and investing goals.

Some possible scenarios are:

1. You invest in a property that has a particular (traditional) zoning and the TOD zoning changes means that you could therefore build more units on that site.  This increases the value of that property and for many would be a good investment.
2. You invest in a property (say it's a nice House on a large block) just outside the TOD zone.  It's zoning and planning controls does not change but with the impending development within the TOD, the locale invites more investment and amenity which may help to uplift the value of your property with more jobs, amenities, shops etc.
3. You could also consider investing in a commercial/retail property that would naturally become busier with the potential population boost around the TOD.

Ofcourse, wth additional development of housing comes more supply and this too should be taken into account when assessing investment potential.

For an owner occupier the decision is very different.  If you are looking to buy your home and live in or near a TOD, make sure you understand what this could mean for you and if this aligns to your ideal neighbourhood.

It should also be noted that whilst the motivations of the Government are noble in that they are doing this to help address the housing issue, this still requires organisations (private and public) to actually invest and develop within the TOD areas.  This investment may not occur for some (could be many) years and some TOD train stations may be a lot more suitable than others due to existing infrastructure as well as the community attitude to change.

Conclusion

The Government is being proactive to introduce initiatives to help address the housing crisis.  This includes the TOD zones.

Changes to zoning and planning controls always introduce opportunity and can change the property landscape.

Such changes, however, take time to implement and eventuate as this requires significant financial investment from private and public enterprises.

Property buyers looking to buy or invest in or near a TOD train station should keep abreast of the TOD implementation, especially what this translates to in terms of planned and approved developments, so that they can make informed decisions based on their personal situation and goals.