Housing affordability is a major challenge in Australian cities. A perfect storm of low interest rates, slow approval processes, insufficient new development (in Sydney, at least), negative gearing and foreign investment has led to a gross imbalance between demand and supply. These conditions may ease eventually, but an ever-growing urban population will continue to demand housing. It seems evident that increased density and smaller living spaces are necessary, especially if we want to avoid suburban dispersal and long commutes to work. While the “micro-apartment” trend has seized the popular imagination, without sufficient regulation today’s micro-apartments are just tomorrow’s slums. Soaring land and labour costs and a voracious market act as disincentives to design and construction quality.

For the past decade, Sydney has benefited from State Environmental Planning Policy 65 (SEPP65) and its accompanying Residential Flat Design Code. SEPP65 is the only piece of Australian legislation that mandates the use of an architect. It also sets qualitative and quantitative benchmarks for the design of apartment buildings. The Code outlines key provisions for environmental and spatial amenity, serves as a style guide for “good” development, and suggests both minimum and ideal sizes for apartments. Prompted by a damning Melbourne City Council report on new apartment buildings, the Victorian government is considering adopting similar legislation to that of New South Wales. However, a key criticism of the NSW SEPP has been that it is over idealised. Critics argue that the Code’s apartments are too large for lower-income buyers, thereby contributing to the affordability crisis.

Last month, widespread outcry greeted a NSW Land and Environment Court ruling that seemed to further enlarge unit sizes. Overturning a previous decision, Judge Terry Sheahan, a former NSW Planning Minister and Attorney-General, clarified an apparent discrepancy between two different apartment standards provided in the SEPP. Citing the wording of the SEPP, Judge Sheahan ruled that the basis on which a council can refuse an application for units because they are too small is not a “rules of thumb” table of minimum affordable unit areas, but a second table describing optimal unit arrangements with greater floor areas. Developers and architects had assumed that the “rules of thumb” prevailed following a 2012 judgement. Confusingly, both tables appear on the same page in the Code.

Alarm at Judge Sheahan’s decision has been greatly overstated. Articles in the daily press and online have suggested that, with the stroke of the judicial pen, Judge Sheahan has increased the size of all future apartments in NSW. This is not the case. Compliance with the SEPP does not guarantee approval, nor does non-compliance guarantee refusal. It is still possible for a willing approval authority, be it a council or a panel, to approve much smaller apartments than the idealised exemplars set down in the Code. Most councils have been doing this for more than a decade – judging applications on merit and with regard to their specific contexts.

Judge Sheahan’s ruling has not increased the standard sizes for development approvals, but has effectively expanded the basis for what can be opposed. If a development permit is refused, unit sizes that are below the standards adopted in Judge Sheahan’s decision may be cited as a basis for the refusal. However, if measurements meet or exceed those outlined in the table of optimal arrangements, unit size may not be used as a ground for refusal. Thus, the implications of Judge Sheahan’s decision take effect only in the case of a refusal. In some municipalities, councils may exploit this ruling to push for unreasonably large apartments. I suspect most councils will continue to exercise common sense and to demonstrate an understanding of their local demographics by approving more affordable unit sizes.

Complicating matters, Judge Sheahan also decided that the SEPP does not override the provisions of council development control plans. Some councils specify larger apartment sizes than those listed in the SEPP, which is intended to provide consistent guidelines across all council areas. Incredibly, a State policy does not take precedence over a local one. This anomaly will continue until a new SEPP and Code are implemented. As for the project at the centre of the court case, it was sent back to the Commissioner who first decided the case to review his decision.

Beyond unjustified concern over unit sizes, what this ruling indicates is the need for straightforward, unambiguous minimum standards for apartment design. In September 2014, the Department of Planning and Environment exhibited an improved version of the SEPP and an update of the Code. Hopefully, discrepancies such as unit sizes will be resolved in these new instruments as soon as possible. In the meantime, much of my own work as a planner will come from demystifying these unnecessarily arcane rules. And quite frankly, it’s work I can do without.