Councils in NSW will get only 10 days to dispute small variations of development applications that normally take months to be processed, an alternative approval body panel will be made permanent and 16-year-old regional planning panels will be chucked on the scrap heap.
Premier Chris Minns is touting the ambitious overhaul as "the biggest reform" to planning and housing in the state's history.
"Young people are not finding a place to live in the second most expensive city (Sydney) on earth, and the primary reason for that is that we're not building enough houses," he told reporters on Wednesday.
"The planning system is not fit-for-purpose any longer. It competes against itself."
The reforms rewrite large swathes of the Environmental Planning and Assessment Act, first passed in 1979.
It's the foundation of the state's housing, infrastructure and energy delivery pipeline, informing decisions about new and existing developments.
Wait times for approvals have ballooned since 2021, from 75 to 114 days in 2024, despite the number of applications lodged falling by almost a third.
Experts note that's partly because councils devote scarce resources to assessing low-impact projects, such as adding a deck or pergola to a house.
Alarm bells rang in February 2024 when the state's productivity commission warned Sydney's unaffordable housing market would turn it into "the city with no grandchildren".
The commission's research found the NSW capital lost twice as many people aged from 30 to 40 as it gained between 2016 and 2021.
According to the urban policy think tank, Committee for Sydney, the city is in a "generational housing crisis".
"Too often, good projects for housing, infrastructure and economic development are caught in a maze that can run through as many as 22 agencies," CEO Eamon Waterford said.
Treasurer Daniel Mookhey is promising that the changes will allow the state to leapfrog others in its quest to build 377,000 homes in five years, under the National Housing Accord.
"This reform is of national significance - it will catapult NSW from having the worst planning system in the nation to the best," he said.
"This is the next common-sense step to increase productivity."
The long-awaited changes also establish a Development Coordination Authority to act as a single front door for advice on development applications and planning proposals on behalf of all government agencies.
Regional planning panels, brought in 16 years ago to deal with major developments of more than $30 million, will be scrapped.
The old independent bodies, which are not answerable to the planning minister, had been slow to expedite approvals, the NSW government said.
The reforms slated will free planners to focus on large-scale bricks and mortar projects, Planning Minister Paul Scully said.
"In NSW, 90 per cent of development applications are for less than $1 million - to put it simply, we are sweating the small stuff," he said.
The changes were developed following constructive conversations with the coalition opposition, the government added.
