NSW Bill to End Modular Home 'Estate' Rule

A legislative change in New South Wales could remove a planning barrier that has blocked a Bulli couple from building a second modular home on their block, a case that highlights how outdated definitions are slowing modern construction methods.

Caitlin Holme and Chris Robinson have spent two years trying to place a modular home on a subdivided block they own with Ms Holme's sister. Wollongong City Council rejected the proposal twice because two modular homes on one property meet the definition of a "manufactured housing estate" – a use not permitted under the local zoning.

"I think not many people realise there was this weird thing," Ms Holme said. "Like suddenly two houses means it's a manufactured housing estate?"

The couple bought the 1,840-square-metre block in 2024, hoping each family could have its own home while sharing land. Ms Holme's sister's modular home already sits at the back. The plan was to put another at the front. Instead, they pay rent and a mortgage while raising two young children.

The council's position rests on the Wollongong Local Environment Plan, which permits one modern method of construction (MMC) home per allotment. More than one constitutes a manufactured housing estate, which is not permissible under the current zoning.

"Planning legislation does not allow a council to approve a prohibited use," a council spokesperson said.

After consulting a town planner, the family subdivided the block and resubmitted. The council rejected it again for the same reason.

The NSW government has now introduced legislation that would remove the distinction between modular and traditionally built homes for planning approvals. Building Minister Anoulack Chanthivong said the reforms would create a single approval pathway regardless of construction method.

"It will establish a new building approvals pathway that will no longer be determined by the construction method, so a house will be treated as a house whether it be prefabricated, traditionally built or a combination of both," he said in a statement.

The minister said the reforms would reduce red tape, speed up approvals and help deliver homes.

Planning Minister Paul Scully said the proposed changes should resolve the issue faced by the Bulli family.

"When you've got this anomaly … that modern methods of construction aren't dealt with in the same way as traditional methods of construction, we've got to deal with that," he said.

The council said it had advocated for clearer legislation for approving modular builds. A spokesperson said further detail was required and the council looked forward to new legislation clarifying definitions and planning pathways, including "vagaries within the definitions and requirements for manufactured homes and manufactured home estates."

The regulatory friction comes as the NSW government embraces modern construction to speed up housing supply. In May it announced a proposed shake-up of building laws, citing a Commonwealth Productivity Commission estimate that modern methods could cut building costs by up to 20 per cent and halve construction times.

Ms Holme and Mr Robinson were confident their application would be approved because the same modular home builder had delivered dual occupancy projects in other council areas, including Port Stephens. That confidence is gone.

"I feel like we did everything that was asked of us. We followed the state and federal government's advice to move out of the city," Ms Holme said. "They're spruiking modular housing. We ticked all those boxes and now we're just waiting."

The couple's dream of living next to family remains on hold. The legislation, if passed, would treat their two homes as two houses – not a manufactured housing estate.