R2 Zoning, the LMR Map, and Terraces as Complying Development: A Castle Hill Case Study
One of the most common questions we now hear from landowners, investors, and builders is this:
My site is zoned R2 Low Density Residential. It also appears on the Low and Mid-Rise Housing indicative map. Can I propose terraces as complying development?
It is a sharp question, and it is exactly the kind of puzzle the NSW Low and Mid-Rise (LMR) Housing Policy was designed to unlock. The answer is not a simple yes or no. Being on the map is only the start. Zoning, flood constraints, lot size, lot width, and the difference between a Development Application (DA) and a Complying Development Certificate (CDC) all decide whether terraces are possible — and which approval path is faster.
This post walks through a recent feasibility we assessed on a typical residential lot in Castle Hill, within The Hills Shire. The site is not identified by address. The planning logic, however, is the same one that now applies to many R2 lots across Sydney’s LMR catchments.
If you own, or are looking at, land near a town centre or station and want to understand your LMR potential, this is the framework we use.
The site in plain terms
The property is an established low-density residential lot in Castle Hill, in The Hills Shire local government area.
Key facts:
Zoning: R2 Low Density Residential under The Hills Local Environmental Plan 2019
LMR mapping: located within a mapped Low and Mid-Rise Housing area
Lot size: about 1,324 square metres
Width: more than 21 metres at the building line, with a street frontage of around 24 metres
Catchment: within the Hawkesbury–Nepean river system
The brief was specific: could three terrace dwellings be proposed under the complying development codes?
Under the local LEP land-use table, multi dwelling housing is not permitted in this R2 zone. Dual occupancies and dwelling houses are. On a conventional reading, terraces would be refused.
That is where Chapter 6 of State Environmental Planning Policy (Housing) 2021 changes the picture.
The LMR policy can permit terraces in R2 — even when the LEP does not
Chapter 6 of the Housing SEPP is the Low and Mid-Rise Housing Policy. Once land is in a low and mid-rise housing area and in Zone R2, the State policy can make multi dwelling housing and attached dwellings permissible with consent, even if the local LEP still lists them as prohibited.
In other words: the LEP is not the last word. If the site qualifies under Chapter 6, terraces can become a lawful housing type on R2 land.
That is the first, and most important, shift for The Hills, and for many other Sydney councils where R2 has historically meant detached houses only.
Being on the indicative map is not enough
The LMR indicative map is a useful starting point. It is not a certificate of permissibility.
Chapter 6 only applies to land described in the Housing SEPP. Certain hazards and constraints are carved out. For this Castle Hill site, the relevant test was flooding.
The lot sits in the Hawkesbury–Nepean catchment. Land identified as Probable Maximum Flood (PMF) in the 2024 Hawkesbury–Nepean River Flood Study is excluded from Chapter 6. If the site falls inside that flood extent, neither a CDC nor a DA can rely on the LMR terrace provisions.
That check has to be certified by a flood engineer. Mapping screenshots are not enough.
This is a point we repeat to clients across western and north-western Sydney: an attractive LMR overlay can disappear the moment a flood, bushfire, heritage, or other exclusion is confirmed. Get the constraint advice early, before you spend on design.
For this site, the working assumption was: if the flood engineer confirms the lot is outside the PMF, LMR permissibility can proceed.
Can terraces go through complying development?
Once permissibility is established, the next question is the approval pathway.
A DA is a merit assessment by council. A CDC is a code-based approval issued by a certifier, generally faster, but only if every numeric standard in the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 is met. There is no “close enough” under a CDC.
Terrace housing as complying development sits in Part 3B — the Low Rise Housing Diversity Code.
Lot size: the LEP still matters
This is where many people mix up the LMR policy with the CDC code.
The Housing SEPP includes non-discretionary lot-size standards for a DA, including a 600 square metre minimum for multi dwelling housing in LMR areas. Those DA standards cannot be used to satisfy the CDC lot-size test.
For a CDC, the Codes SEPP looks first to the local LEP minimum lot size for multi dwelling housing (terraces), or, if none is specified for terraces, for multi dwelling housing. Only if the LEP is silent does the code fall back to 600 square metres.
In The Hills LEP, clause 4.1A sets a 1,800 square metre minimum for multi dwelling housing in R1, R3, R4 and E1. It does not specify a minimum for multi dwelling housing in R2.
That silence is decisive. For this R2 lot, the CDC fallback of 600 square metres applies. At about 1,324 square metres, the site clears that hurdle comfortably.
If the LEP had imposed 1,800 square metres on R2 as well, this site would have failed the CDC lot-size test. The project would then have been a DA — slower, but able to use the Housing SEPP’s 600 square metre non-discretionary standard and its other DA controls.
The same lot can be “too small for CDC” and “large enough for a DA.” The pathway you choose changes the rules you must meet.
Lot width: 21 metres at the building line
The CDC code also requires the lot to be at least 21 metres wide, measured at the building line.
This Castle Hill lot had a frontage of about 24.4 metres and a rear boundary of about 22.7 metres. Width at the building line was therefore above 21 metres.
Three terraces were therefore capable of proceeding as complying development, subject to flood clearance and a design that hits every other code standard.
FSR and floor area: 0.7:1 is not the CDC rule
Another frequent mix-up is floor space.
The Housing SEPP’s non-discretionary DA standards for multi dwelling housing in LMR areas include a maximum floor space ratio of 0.7:1. That figure does not automatically apply to a CDC.
On this site:
The Hills LEP does not map an FSR for the land, so there is no LEP floor space ratio.
A CDC is instead limited by the code’s gross floor area control, which for this pathway is 60% of the lot.
The 0.7:1 LMR figure only comes into play if you are using the DA pathway and those non-discretionary standards.
That is why we never “borrow” DA bonuses and drop them into a CDC design. If you want the LMR FSR, you are generally in a DA. If you want CDC speed, you design to the code’s GFA, setbacks, height, and landscaping rules.
Setbacks: neighbours on the same street, not the house around the corner
Front setback under the current Low Rise Housing Diversity Code is typically taken from existing dwellings within 40 metres on the same side of the street.
This lot sat near an intersecting street. One adjoining building faced the side street and sat closer to the frontage. It is tempting to use that building to pull the terrace row forward.
That is not how the code works. A dwelling that addresses the intersecting street is not the correct reference. The front setback had to be taken from the neighbouring houses that face the same street.
What this Castle Hill example means for other LMR sites
The result for this site was clear:
Yes — three terraces can be proposed as complying development, provided a flood engineer confirms the lot is outside the Probable Maximum Flood, and the design complies with Part 3B of the Codes SEPP.
More useful than that single answer is the sequence. If your site is R2 and on the LMR map, work through the questions in this order:
Is the land actually in a low and mid-rise housing area? The indicative map is a clue, not the legal test.
Do any Chapter 6 exclusions apply? Flood, bushfire, heritage items, and other constraints can take the site out of the policy entirely.
Does Chapter 6 make terraces permissible in R2? If yes, the LEP prohibition is no longer the end of the story.
Can it be a CDC, or must it be a DA? Check the LEP minimum lot size for multi dwelling housing in this zone, then the CDC 21-metre width test, GFA, setbacks, and design guide.
Do not mix pathways. LMR non-discretionary standards such as 0.7:1 FSR belong to the DA route. CDC has its own numeric code.
Measure setbacks from the correct neighbours. Corner and side-street buildings often cannot be used.
That sequence is now one of the highest-value pieces of due diligence in Sydney’s housing market. Get it wrong, and you can spend months designing a CDC that was never available — or lodge a DA that could have been a faster code approval.
Why this matters if you are exploring Low and Mid-Rise Housing
The LMR reforms are creating genuine “missing middle” opportunities: dual occupancies, terraces, townhouses, and, in some catchments, small apartment buildings close to centres and stations.
They are also creating false confidence. A coloured map, a 600 square metre lot-size rumour, or a 0.7:1 FSR headline is not a feasibility study.
The Hills Shire example shows both sides of the policy:
Opportunity: R2 land that could not previously accommodate terraces may now support a three-dwelling CDC, on a lot of about 1,300 square metres, if the code tests are met.
Discipline: flood exclusions, LEP lot-size tables, CDC width, GFA versus FSR, and street-setback rules can still close the door.
SN Architects specialises in this exact intersection of State housing policy, local LEPs, and buildable design. We work through LMR mapping, constraint checks, CDC versus DA pathway advice, and terrace, townhouse, and dual occupancy design so that what is drawn can actually be approved.
Talk to SN Architects about your LMR site
If your property is zoned R2, sits near a town centre or station, or appears on the Low and Mid-Rise Housing indicative map, it is worth a proper assessment before you buy, sell, or sketch a scheme.
We can help you:
Confirm whether Chapter 6 of the Housing SEPP applies to your land
Test CDC eligibility for terraces, dual occupancies, and other low-rise housing types
Compare CDC yield against a DA pathway under the LMR non-discretionary standards
Prepare SEPP-compliant terrace and townhouse designs that meet the code, not just the brochure
Contact SN Architects to discuss your site.
Keywords: Low and Mid-Rise Housing NSW, LMR indicative map, R2 Low Density Residential, The Hills Shire, Castle Hill terraces, SEPP Housing 2021 Chapter 6, complying development, Low Rise Housing Diversity Code, multi dwelling housing, SN Architects
Disclaimer
This article is general information only. It is based on a site-specific planning review of an anonymised residential property in Castle Hill, The Hills Shire, and on NSW planning instruments as understood at the time of writing. It is not planning, legal, flood, or certification advice, and it does not determine permissibility for any other property.
Zoning, LMR mapping, flood mapping, LEPs, the Housing SEPP, and the Codes SEPP can change. CDC and DA eligibility always depends on the facts of the land, current law, and advice from suitably qualified professionals, including planners, flood engineers, and registered certifiers where relevant.
You should not act on this article alone. For advice about your own site, contact SN Architects.
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