New planning laws in NSW to facilitate property development

 


In what can only be described as both a stunning and welcome move to spark up the property, development and construction industries in NSW, the state government has introduced legislation into parliament which expressly seeks to ‘remove impediments to the supply of housing’ and to ‘facilitate permissible development’.

In particular, it seeks to reduce the role of development control plans (DCPs) in the development assessment process, by mandating that they be ‘given less weight and significance’ than local environmental plans (LEPs) and be ‘applied flexibly’ so as not to prevent good development from proceeding.

The bill

The Environmental Planning and Assessment Amendment Bill 2012 was introduced into the lower house of the NSW Parliament on Wednesday this week and rushed through in same day on the strength of the government’s majority.  The bill is now before the upper house of parliament, where the government must win the support of either the state opposition or the cross-benchers.  

The bill makes a number of changes.  Some measures are house-keeping in nature, such as increased flexibility for the Rural Fire Service to revise maps for bush fire prone land.  There are also changes that impact on the regulation of accredited certifiers and building certification.  However, in this update, we will focus on the most significant of the changes, the new regime for DCPs.

The purpose of the bill is make important interim reforms to the planning system, pending more comprehensive changes flowing from the government’s green paper issued earlier this year.

Background

DCPs have long been a thorn in the side of property owners and developers seeking to redevelop in NSW.  Conversely, they have been a powerful tool for local councils to proscriptively control the size, form, nature and intensity of development.  That status quo looks set to change.
 
As readers would be aware, the planning approvals process under the Environmental Planning and Assessment Act 1979 (the Act) is characterised by a hierarchy of planning controls, for example state environmental planning policies (SEPPs) and LEPs, which are made by the Planning Minister and are carefully vetted by the state government’s professional staff before they are introduced.

SEPPs and LEPs typically establish land use zonings and therefore control what is permissible on land and what is not.  They also typically contain high-level ‘development standards’ which establish development controls such as maximum height and floor space ratios.

DCPs on the other hand are generally not made by the Minister for Planning, and are not subject to any prior approval by state government.  Nevertheless they have evolved over time to be voluminous documents containing detailed and highly proscriptive controls, created at the whim of the local council and without any state government supervision.  The City of Sydney prepared a 718 page DCP to come into effect with its new ‘modernised’ LEP, while just earlier this month, a new 1,145 page DCP came into effect in the Hills Shire Council.

DCPs frequently limit every conceivable aspect of potential development, including height, floor space, setbacks, landscape area, solar impacts, and even the very nature of land uses – for example by stating that on a site where retail is permissible under an LEP, that nevertheless supermarkets or convenience stores are not to be approved. 

The prescriptive and limiting nature of many DCPs is, arguably, not what was originally intended. However, a series of court decisions, beginning in the 2001, have declared that DCPs must be considered as a "fundamental element" in, or a "focal point" of, the decision making process.  Furthermore, the courts have said that a DCP’s provisions cannot be varied just because a consent authority thinks that the provisions of a DCP are not good general policy. 

The development industry has been vocal on this issue for many years. Now, finally, it seems that government has heard the message and reforms are to be made. 

Purpose of DCPs

The bill changes the key purpose of DCPs.

Presently, the law says that DCPs are there “to make more detailed provision with respect to development”.  The courts have taken this to mean that DCPs are there to impose additional requirements on development applicants, above and beyond those in a LEP.

Under the bill’s changes, the principal purpose of a development control plan will be to provide “guidance” and in doing so:

  • give effect to the aims of LEPs and SEPPs;
  • facilitate permissible development; and
  • achieve zone objectives.

DCP provisions on complying development are unaffected by the change.

Some DCPs provisions will have no effect

DCP provisions will be void if they have the practical effect of either:

  • preventing; or
  • unreasonably restricting,

development that is otherwise permitted and complies with the development standards set out in the relevant LEPs and SEPPs.  

The bill does not shed further light on what restrictions might be ‘unreasonable’.  This has been left to the courts to decide. 

This change will come into effect as soon as the law commences.  It will apply to all existing DCPs as well as future DCPs.  As a result this change could affect the assessment of development applications currently in the system.

DCPs to be less important

Where DCPs include controls on development (other than complying development) those provisions will not be regarded as statutory requirements. 

In particular, when assessing development applications, DCPs are to be given less weight and significance than LEPs and SEPPs.  (Unlike the provisions which limit the effect of DCPs, described above, this new provision, and those described below, will only affect development applications made after the new law starts.)

While standards that prevent or unreasonably restrict development will have no effect, other DCP standards (ie the ‘reasonable’ ones) must still be applied flexibly.  As part of this obligation consent authorities must allow “alternative solutions” to deal with the relevant aspect of the development.

No precedents

How a DCP has been applied in the past will now be irrelevant, as will the potential for any precedent to be set for other development applications in the future.

Councils will no longer have any need to rigidly enforce DCPs out of a fear that an adverse precedent might be set and weaken their position for future development applications.

Ad-hoc standards cannot be more onerous

When a proponent has complied with the standards set in a DCP in relation to an issue, consent authorities will not be able to require a proponent to satisfy more onerous ‘standards’ with respect to that issue.

Strangely, this provision is not mirrored for LEPs. 

Start date for the DCP changes

The rapid progress of the bill suggests that the government regards the bill as priority legislation.  This means that, provided they can get support in the state’s upper house, the bill should have passed through parliament before it adjourns for the year on 29 November 2012.

If it is passed by parliament, the bill can become law at any date of the government’s choosing.  There is no information presently available on when that will be.  The changes to DCPs may come into law before the end of the year, or it may be held over into next year.  

Our view

These changes reflect a major shift in the state government’s thinking.  They tackle one of the most serious problems of the existing planning system.  We are personally aware of numerous projects that are consistent with LEPs, but have been frustrated by overly-complex and prescriptive DCPs. 

However, the bill is not perfect.  Two concerns immediately come to mind.
 
Firstly, the lack of clarity about how a consent authority or the Land and Environment Court is to determine whether an impediment created by a DCP is ‘unreasonable’ will create some uncertainty (although, sometimes, an uncertain ‘yes’ is better than a certain ‘no’).

Secondly, a consent authority will be barred from imposing a more onerous ad-hoc ‘standard’ on a compliant development, if the original standard is in a DCP.  However, no equivalent restriction is imposed to protect proponents from being subjected to more onerous ad-hoc ‘standards’ when the original standard is in a LEP or SEPP. 

Nonetheless, in our judgment, the changes to the DCP provisions are a major step forward.  These changes should cause many proponents to take another look at development proposals that previously stood little chance because of overly restrictive DCPs. 

Those who have (DCP-inconsistent) development applications pending may need to make a difficult decision.  That is, whether to withdraw their development application in the hope that the new law will commence soon and then seek to re-lodge their application to benefit fully from the new provisions.

We are already talking to a number of our clients who have recently been impacted by DCPs.  Please contact us if you think we can advise you on the implications of these changes for any of your development proposals.
 
Gadens will be holding a seminar on this important topic in the near future.  We will be in touch with seminar details when they come to hand.

 

Yes

 


This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.