Two modular homes deemed a ‘manufactured housing estate’ under planning rules

A planning dispute over modular housing has exposed a gap in NSW’s approval system.

Wollongong couple Caitlin Holme and Chris Robinson have spent the past two years trying to gain approval to build a second modular home on a subdivided 1,840sqm block in Bulli on the state’s South Coast, according to the ABC.

The couple purchased the property with Ms Holme’s sister, who already lives in a modular home on the rear of the site. Their plan was to build a second home at the front so both families could live side by side.

Instead, Wollongong City Council has twice rejected the proposal, determining that two modular homes on the one property meet the planning definition of a manufactured housing estate, a land use that is not permitted under the site’s current zoning.

The decision has left the family paying both rent and a mortgage while raising two young children.

“We don’t want to give up on the plan of living next door to my sister and her family, it’s too good of a dream to walk away from at the moment,” Ms Holme said.

“The reality is housing prices are more expensive and our generation has to be a bit more creative about how you make that a reality.

“But I think [with] everything we’ve been through in this process, we’re not super optimistic anymore; we still just feel so up in the air.”

The couple said they believed the proposal would be approved because the same modular home builder had completed similar dual-occupancy developments in other NSW council areas.

After consulting a town planner, they subdivided the block and lodged a second application. It was rejected for the same reason.

A Wollongong City Council spokesperson said the Wollongong Local Environment Plan permits one modern method of construction (MMC) home per allotment under the current zoning.

“More than one MMC home presently constitutes a manufactured housing estate which is not permissible under the current zoning,” the spokesperson said.

“Planning legislation does not allow a council to approve a prohibited use.”

The case comes as the NSW Government seeks to accelerate the use of modular and prefabricated housing to help address the state’s housing shortage.

Proposed reforms introduced to Parliament would remove the distinction between modular and traditionally built homes for planning approvals, creating a single approval pathway regardless of how a home is constructed.

Building Minister Anoulack Chanthivong said the changes would ensure houses are assessed consistently, whether they are prefabricated, traditionally built or a combination of both, while reducing red tape and speeding up approvals.

Wollongong City Council said it had been advocating for clearer legislation covering modular housing and was looking forward to the reforms clarifying planning definitions and approval pathways.

The issue has emerged as NSW continues to fall behind the pace of housing construction needed to meet its National Housing Accord targets, reinforcing industry calls for reforms that make it easier to convert housing approvals into completed homes.