Development & land

Submissions on Shellharbour's 10,000-home city centre closed on 30 September. There are about 1,000 homes on the land, and its busiest intersection fails by 2041 either way

The NSW Government is rezoning 109 hectares of Shellharbour City Centre itself, in a state-led process the council says it welcomes, for up to 10,000 homes at two to 22 storeys. The public exhibition closed on 30 September 2026, three weeks later than the 8 September close the ministers announced in August, and the proposal is now with the Department of Planning. We read the Explanation of Intended Effect and the technical reports behind it. Inside the boundary there are 998 existing and approved homes; the master plan allows 9,835. About half the land is already government-owned. The traffic study has the New Lake Entrance Road, Government Road and Range Road intersection at a fail grade by 2041 whether or not the rezoning happens. Schools, utilities and the contributions plan are left to later.

4 October 2026 Exhibition documents on the NSW Planning Portal read 4 October 2026

This is the biggest planning decision pending anywhere in the Illawarra, and it is being made in Parramatta. On 29 October 2025 the Minister for Planning and Public Spaces declared Shellharbour City Centre a state-led rezoning, which means the department writes the new controls and the minister makes them, not Shellharbour City Council. The council says it welcomes that. What follows is what the exhibition documents actually commit to, read in full, and the parts they leave for later.

What is proposed, from the department's own document

The Explanation of Intended Effect is 54 pages, published in August 2026 and dated as current to July. It amends the Shellharbour Local Environmental Plan 2013 by a self-repealing State Environmental Planning Policy. The precinct is about 109 hectares either side of Lake Entrance Road and New Lake Entrance Road, taking in Stockland Shellharbour, the TAFE campus, the current Shellharbour Public Hospital, Homes NSW and Aboriginal Housing Office estates, the council's civic centre and its car parks. The department says about 50 per cent of it is in government ownership.

The headline numbers are capacity for up to 10,000 new homes and 940 additional jobs. The planning portal adds 14.4 hectares of public open space, building heights from two to 22 storeys and floor space ratios between 0.5:1 and 3.6:1. The tallest buildings go in the retail core, which the urban design report describes as 14 to 16 storeys above retail for a maximum effective height of 22 storeys. Today the same land is controlled at 9 metres across most of the precinct, 11 to 12 metres in the west and at the basin, and 15 to 18 metres at the shopping centre, which the same report puts at about four to five storeys.

A new R4 High Density Residential zone is introduced to the Shellharbour LEP for the first time. Stoney Range is upgraded from a local centre to a commercial centre zone. Residential flat buildings become permissible on commercial land at the corner of College Avenue and Benson Avenue. Any housing development in the precinct worth $60 million or more goes to the state significant development pathway, assessed by the department rather than the council. The low and mid-rise housing policy that already applies within 800 metres of the town centre keeps applying on top.

From about 1,000 homes to nearly 10,000

The number that puts the proposal in proportion is in the urban design report by MAKO Architecture and Studio Zanardo, dated 26 May 2026. Its yield summary counts the homes that exist or are approved inside the study boundary today, what the existing low and mid-rise mapping would allow, and what the master plan allows, for each of seven sub-precincts.

The master plan figure of 9,835 includes 750 existing dwellings retained, so the new homes come to 9,085. The economic impact assessment, which models the same scheme, rounds it to about 9,500 dwellings against about 1,500 under the existing planning framework. Whichever pair you use, the proposal multiplies the precinct's housing by somewhere between six and ten times. Two of the seven sub-precincts, the Northern Ridge and the Retail Core, have no homes at all today and are planned for 3,492 between them. The Northern Ridge is the TAFE and the current hospital, which only becomes available once the new Shellharbour Hospital at Dunmore opens, and no opening date has been published.

For scale, the social infrastructure assessment puts the precinct's resident population at 4,328 in 2025. The economic report says the Shellharbour local government area needs 10,900 additional dwellings by 2041, and the traffic report records the state's five-year housing target for the council as 3,800 by 2029. This one precinct is therefore planned to carry most of the council area's housing need for the next 15 years.

Affordable housing: 5 and 10 per cent, with an exclusion

Every new residential development in the precinct will have to contribute to affordable housing in perpetuity: 5 per cent on private land and 10 per cent on government-owned land north of Lake Entrance Road, either as floor space or as an equivalent payment. That replaces the floor space and height bonuses the Housing SEPP currently offers for in-fill affordable housing. The contribution area excludes the land owned by Homes NSW and the Aboriginal Housing Office. On the social housing estates themselves, the department commits to no reduction: The proposal does not reduce the existing public housing offering and does not alter the ongoing role of Homes NSW's land in providing social housing. It also does not prescribe what renewal of those estates looks like, leaving that to Homes NSW's own asset planning. Readers who followed the Gwynneville renewal in Wollongong will recognise the shape: the rezoning sets the envelope, the landowner decides the timing.

The intersection that fails either way

The traffic management and accessibility plan, by Mott MacDonald, modelled ten key intersections. Most operate today at levels of service A to C. The exception is New Lake Entrance Road at Government Road and Range Road, already at level D with notable queuing, and the report is direct about where that is heading: Without mitigation, background growth is expected to push the New Lake Entrance Road / Government Road / Range Road intersection to LoS F by 2041. Level F is the lowest grade in the scale, an average delay above 100 seconds in the PM peak in the 2041 reference case.

The point that matters for anyone weighing the rezoning is that the reference case is background growth without the rezoning. With the rezoning and its proposed upgrades, the same intersection still averages level F, with the delay reduced to about 80 seconds, and the queue on the eastern approach reaches 345 metres against 315 metres to the next intersection at Minga Avenue. Benson Avenue reaches mid-block level F eastbound in the PM peak, and Pioneer Drive west of College Avenue shows level F eastbound. The report's conclusion is that with the transport projects delivered in step with development, 2041 conditions are comparable to what background growth would produce anyway. That is a defensible planning position. It is also a statement that the plan does not fix the precinct's worst junction, and nobody should read it as one.

The package of fixes is substantial on paper: a new bus interchange on College Avenue replacing the one at Stockland, bus stops along College Avenue, Benson Avenue, Wattle Road and New Lake Entrance Road, bus priority and bus lanes for the core routes, a footbridge over Lake Entrance Road east of College Avenue, 7-metre widening of Benson Avenue and 9-metre widening of College Avenue, and new local roads through the hospital and TAFE sites. The only funded item we can find in the documents is $4 million the state has committed to planning a left-turn lane at the New Lake Entrance Road and Pioneer Drive roundabout, where queues currently back onto the Oak Flats interchange, with construction timing not confirmed.

That roundabout and that interchange are two of the three items Shellharbour's mayor named when the council welcomed the exhibition on 11 August. Chris Homer said Growth must be matched by infrastructure and listed Dunmore Road, the Pioneer Drive and New Lake Entrance Road roundabout and the Oak Flats interchange as the upgrades council will keep pressing for. The council's release supports the rezoning without qualification; the asks are about what comes with it.

What is decided now and what is deferred

Rezonings are often read as if they build things. This one sets rules and a handful of incentives, and the documents are candid about what sits outside it.

• Decided by the rezoning: zones, heights, floor space ratios, a 900 square metre minimum lot size in the western medium-density area to force consolidation, active frontage requirements, the affordable housing levy, the state significant development threshold, and land reservations for widening College Avenue and Benson Avenue, the Range Road intersection and Benson Basin.
• Incentivised on six key sites: a 5,000 square metre local park and an 800 to 1,200 square metre community facility north of Lake Entrance Road, a 4,000 square metre park west of Harrison Park, at least 4,500 square metres of publicly accessible private recreation space in the retail core, the Benson Basin stormwater and playing-field project at 13 Benson Avenue, and the road widenings along each site's frontage. These are delivered when those sites redevelop, which is to say when their owners choose to.
• Deferred: the Section 7.12 contributions plan that funds local works, which is yet to be prepared; development controls for towers, setbacks and the street network; utility upgrades, which the document says will be addressed through further planning; and schools. On schools the department's wording is that the proposal will not create an immediate need for new schools, with the Department of Education monitoring enrolments.

The infrastructure funding section runs to a page. Local works are to be paid by developer contributions under a plan the council has not yet made, and state works through the Housing and Productivity Contribution, which pools money across the Illawarra Shoalhaven, Greater Sydney, the Lower Hunter and the Central Coast rather than ring-fencing it for this precinct. No dollar figure for the precinct's infrastructure appears anywhere in the Explanation of Intended Effect.

Three things that changed between announcement and exhibition

Reading the documents in order shows the proposal moving.

The boundary shrank. The Evaluation Panel Outcome Report, the two-page document that put the precinct on the state-led pathway, describes a site of approximately 122 hectares. The panel met on 10 June 2025 and the department's secretary approved the pathway on 4 July 2025. The Explanation of Intended Effect exhibited 13 months later describes approximately 109 hectares. That is 13 hectares less. Neither document explains the difference, and we are noting it rather than interpreting it.

The close date moved. The ministerial release of 10 August 2026 said submissions closed at 5pm on 8 September. The planning portal now records the exhibition as running from 10 August to 30 September. We found no notice explaining the extension; the practical effect was three more weeks.

The jobs figure wobbles. The release says around 900 jobs, the portal and the Explanation of Intended Effect say 940, and the economic assessment's detailed figure is about 939 additional full-time equivalent jobs directly within the precinct, or about 1,655 including flow-on. The documents agree in substance; the public summaries are rounded differently.

The companion proposal at Dunmore

The same exhibition carried a second state-led rezoning, the New Shellharbour Hospital Precinct: about 80 hectares across six sites around the hospital under construction at Dunmore and the Shellharbour Junction station, for about 1,700 homes at two to seven storeys, with a 2 per cent affordable housing requirement on private land, a seniors housing site and a new local centre on Dunmore Road for allied health. Its documents are a separate set and we have not read them to the same depth. Together the two proposals are the 11,700 homes and 1,750 jobs in the August announcement, and they sit inside the draft Illawarra Shoalhaven Plan, exhibited to 28 September, which sets a regional target of 117,000 more homes by 2046.

What happens next

The department will read the submissions, consult the council and agencies again, revise the proposal and send it to the Minister for Planning and Public Spaces. If approved it goes to the Governor for gazettal. The department's own October 2025 announcement anticipated finalisation in late 2026. All submissions are to be published with a consultation summary in the final report, which is the document to read next: it will show how many people wrote in, what they objected to, and what, if anything, the department changed. We will read it when it appears.

Spotted an error, or own land inside the precinct and read these documents differently? Tell us and we will check it against the exhibition documents and log the outcome.