Granny flat rules relaxed to tackle housing crisis

Western Australia has taken a major step towards tackling the housing crisis that is wreaking havoc across the country.

The state is scrapping rules around the building of granny flats in suburban back yards as it tries to increase urban density, slow urban sprawl and bring more housing stock to the city with the country’s lowest vacancy rate among state capitals.

The relaxed amendments to Residential Design Codes (R-Codes) will boost housing supply by removing the minimum lot size requirements for an ancillary dwelling, commonly known as a granny flat.

The alternative housing type will no longer require council planning approval and can be constructed on any property lot size. The new dwellings will need to meet setback requirements and must not exceed 70 square metres.

WA Planning Minister John Carey said the reforms complement the Roger Cook Government's $2.6 billion investment in housing and homelessness measures, which includes funding to deliver 4,000 new social homes.

“Granny flats can be an affordable, efficient and suitable housing option, including for rental properties and elderly family members seeking to downsize and remain in the community they love.

“By removing the minimum lot size for compliant ancillary dwellings, and allowing grouped dwellings to have ancillary dwellings, the Cook Government is further streamlining planning processes and cutting unnecessary red tape to open up more opportunities for new housing.”

Granny flat demand expected to rise

Approvals have previously taken several months, depending on the council. A building permit from the council to ensure the construction is safe will still be required under the new regimen, which takes a maximum of 10 business days.

The new regulations, announced Tuesday (30 January), would likely to heat up a granny flat market that was already in overdrive due to the rental and housing crisis, according to Steve Nicholls, General Manager, Classic Granny Flats.

“The low housing availability along with the high cost of purchasing established homes in WA, combined with two to three year new build timeframes and the as well as the huge increase in the price of rentals in WA has already intensified demand for granny flats,” Mr Nicholls told API Magazine.

“We can complete a new granny flat from purchase to completion from about 6 to 9 months on average at a fraction of the cost of a new home.”

The dwellings were also a source of income for investors, he said.

“Investors are making the most of the high rental returns from granny flats and have become a large proportion of our customers, whereas previously they were family buyers accommodating relatives.

“Many investors from the east coast are purchasing suitable properties in WA, adding a granny flat and doubling their rental income streams.”

In most cases, the new dwellings will not be required to provide a parking bay, except for those in some densities and proposed in locations where a car is more likely to be needed due to distance from public transport.

The changes to parking regulations will open up more of the lot for either dwelling space or garden space.

The amended State Planning Policy 7.3 will be released in mid-March 2024 and will become operational by mid-April 2024.

The changes to the granny flat rules come as the Government finalises new Medium Density Codes that will take effect at the same time. The codes are designed to improve neighbourhoods and ensure tree canopy.

Single homes in areas coded R40 and below will be exempt from the new standards.

The latest raft of WA State Government planning reforms was welcomed by the Urban Development Institute of Australia (UDIA WA).

“Western Australia is in the midst of a housing crisis and there is not enough stock on the market or available to rent, to meet rising demand,” UDIA WA’s CEO, Tanya Steinbeck, said.

“Unnecessary red tape and delays in the planning approvals process just exacerbates the already dire situation we find ourselves in, and we are glad to see the State Government focused on streamlining processes and facilitating the delivery of more quality housing choice to the market,” Ms Steinbeck said.

Ms Steinbeck stressed the importance of Tuesday’s amendments to the draft Medium Density Code.

“Confirming that single homes in areas coded R40 and below will not be subject to the new Code is welcomed by industry and will ensure that some of the most popular new housing products on the market will be maintained to benefit buyers,” Ms Steinbeck said.  

“A single home on a 10.5 metre frontage with a double garage is an extremely popular product across a range of areas,” Ms Steinbeck said.  “This product would have been regulated out if the amendment to the draft Codes hadn’t been made.”

 “We are pleased that the State Government and the Minister have heeded our calls and removed R40 and R30 homes from the new Code,” Ms Steinbeck said.