NSW planning system reforms: What developers need to know

Amendments to the Environmental Planning and Assessment (EP&A) Act that have commenced

Our Planning and Environment team has summarised the recent amendments to the EP&A Act that have commenced, along with their implications for developers in NSW.

1. Objects of the EP&A Act amended

The objects in section 1.3 of the EP&A Act have been amended to introduce new objectives to prioritise housing supply, improve land use productivity, address the challenges of climate change and promote proportionate, risk-based development assessment.

Section 1.3 now reads as follows (our emphasis):

(a) to promote the social and economic welfare of the community and a better environment by the proper management, development and conservation of the State’s natural and other resources,

(b) to promote the supply, delivery and maintenance of housing, including affordable housing,

(c) to promote productivity through the development and management of the State and its resources,

(d) to protect the environment, including the conservation of threatened species of native animals and plants and ecological communities and their habitats,

(e) to promote resilience to climate change and natural disasters through adaptation, mitigation, preparedness and prevention,

(f) to promote the sustainable management of built and cultural heritage, including Aboriginal cultural heritage,

(g) to promote good design, amenity and the proper construction and maintenance of built environments, including the protection of the health and safety of the occupants of buildings,

(h) to provide opportunities for participation in environmental planning and assessment,

(i) to facilitate ecologically sustainable development by integrating relevant economic, environmental and social considerations in decision-making about environmental planning and assessment,

(j) to promote a proportionate and risk-based approach to environmental planning and assessment,

(k) to promote the orderly and economic use and development of land.

Key takeaways

These amendments are important to developers as they introduce, for the first time since 1979, explicit objects in the EP&A Act relating to housing supply and delivery, and a proportionate and risk-based approach to planning decisions.

The reforms also update and modernise the Act’s objects to better reflect contemporary planning priorities – emphasising land use that supports housing supply, climate resilience, economic productivity, the environment, heritage and conservation, and high-quality design and construction.

2. Housing Delivery Authority enshrined in Law

Division 2.3A of the EP&A Act has been inserted to enshrine the Housing Delivery Authority (the HDA) into legislation, recognising its role in facilitating the delivery of State Significant Development (SSD) housing applications and rezonings for developments valued at approximately $60 million or more in Greater Sydney and $30 million or more in regional NSW.

The HDA evaluates proposals submitted through an expression of interest (EOI) process and recommends to the Minister whether proposed developments should be declared as SSD.  The HDA’s EOI Criteria are published in the Housing Delivery Authority State Significant Development Expression of Interest criteria can be viewed in the Housing Delivery Authority State Significant Development expression of interest criteria (PDF, 192 KB).

Before a project submitted by way of EOI is recommended by the HDA to be declared SSD. EOIs are assessed against criteria that accord with the following objectives:

1. Identify high-yield housing proposals by focusing on known high-yield types of residential accommodation
2. Identify housing projects that can be assessed and constructed quickly by focusing on more compliant, major housing proposals that can commence construction quickly
3. Drive quality and affordable housing by focusing on housing development proposals that are well-located, have enabling infrastructure and contribute to affordable housing supply, and
4. Complement the State Significant Rezoning Policy by providing a potential pathway for major housing proposals that are seeking concurrent rezoning.

The HDA applies flexibility in their evaluation of proposals against the criteria.

Section 2.11C of the EP&A Act now provides in legislation the HDA’s functions which include providing advice, recommendations and reports to the Minister, at the Minister’s request, about the supply and availability of housing in NSW, the declaration of specific residential accommodation or residential accommodation and other development on specific land as SSD, and the zoning of land for residential purposes or for residential and other purposes.

Key takeaways

The HDA offers a streamlined planning pathway for large-scale residential and mixed-use developments that contribute a measurable quantity of affordable housing above approximately $60 million in Greater Sydney and $30 million in regional NSW to be assessed as SSD or SSD with a concurrent rezoning.

The process aims to improve consistency, certainty and speed in the planning approval process, while maintaining development quality. By providing a state-led approval pathway, eligible projects can bypass local council processes, which can often cause delays, with development applications being eligible to be lodged through SSD major residential or SSD with a concurrent rezoning pathways.

3. Development Coordination Authority established

Division 2.3B of the EP&A Act has been inserted to establish a Development Coordination Authority (the DCA) (similar to SARA in QLD) to centralise agency referrals and advice provided for the development assessment process with integrated development. The EP&A Act requires a public authority to give information requested by the DCA within the time specified, if the information is reasonably necessary for the exercise of the DCA’s functions.

The DCA will be a single front door for advice on developments across NSW government agencies, replacing the requirement for input from up to 14 state government agencies, making the development application process more efficient.

Key takeaways

The DCA creates as single front door for navigating approval processes in NSW, aiming to streamline inter-agency consultation, reduce delays and provide greater certainty on project timelines.

4. Evaluation of development applications amended to ‘significant’ likely impacts

Section 4.15(1) of the EP&A Act requires that in determining a development application, a consent authority is to take into consideration such of the matters listed in section 4.15(1) as are of relevance to the development the subject of the development application. Subsection (b) has now been amended to restrict a consent authority’s determination of a development application to take into consideration “the significant likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality”.

The Regulations will also be amended to introduce a new section 65A, which clarifies matters that are not relevant when assessing a development application. This includes the significant likely impacts of other development (meaning development that is likely to be, or will be, required to be carried out as a result of the development that is the subject of the development application) for which consent is not sought in the development application.

Key takeaways

 This amendment restricts a consent authority’s determination of a development application to only consider under section 4.15(1)(b) “the significant likely impacts of that development”, instead of the previous obligation to consider the “likely impacts”.

This means that a consent authority in determining a development application is now restricted to taking into consideration “significant likely impacts” of a proposed development.

5. Lapsing of consent provisions amended

Under section 4.53 of the EP&A Act, a development consent generally lapses 5 years after it takes effect (unless a shorter period is specified). A consent will not lapse if building, engineering or construction work relating to the building, subdivision or work is physically commenced on the land to which the consent applies before the expiry date.

This section has now been amended to delete the Covid “prescribed period” being between 25 March 2020 and 25 March 2022 that extended the lapsing period of certain development consents by 2 years.

6. Revocation or modification of development consent

Section 4.57 of the EP&A Act provides the power for the Planning Secretary or a Council to revoke or modify a consent. This section has been amended so that if it appears to:

1. the Planning Secretary, having regard to:
   1. the provisions of a proposed environmental planning instrument, or
   2. the provisions of an existing environmental planning instrument but only in relation to a development consent granted at least 25 years before the Planning Secretary proposes to exercise the power, or
2. a Council, being the consent authority in relation to the development application, having regard to the provisions of a proposed local environmental plan, that any development for which consent is in force in relation to a development application should not be carried out or completed, or should not be carried out or completed except with modifications, the Planning Secretary or the Council may, by instrument in writing, revoke or modify that consent.

Key takeaways

The amendment to section 4.57 now provides the Planning Secretary broader powers to revoke or unilaterally modify a consent having regard to the provisions of not just a proposed environmental planning instrument, but now where a development consent is at least 25 years old and has been granted under an existing environmental planning instrument. This broader power seeks to address ‘zombie developments’ that have been approved over 25 years ago and the development has been physically / substantially commenced but not completed.

Other amendments to the EP&A Act not yet commenced

The Planning System Reforms Act will also make the following amendments to the EP&A Act, which have been passed by Parliament however not yet commenced:

1. New definition of development standard

A new detailed definition of development standard will be inserted into section 1.4(1) of the EP&A Act.

2. New Targeted Assessment Development pathway

Division 4.3A will be inserted into the EP&A Act to enable a State environmental planning policy to declare development, or a class of development, to be Targeted Assessment Development. The State environmental planning policy will likely specify criteria that development, or a class of development, must meet to be targeted assessment development.

3. Complying development expanded

Section 4.31A of the EP&A Act will be inserted into the EP&A Act to expand Complying Development to allow an Applicant for:

1. a Complying Development Certificate, or
2. a Modification of Complying Development the subject of a Complying Development Certificate, to apply for a Variation Certificate – that varies a development standard applying to the proposed development the subject of the application. The period of time to determine a Variation Certificate Application will be between 10 to 20 days, after which the Variation Certificate is taken to have been issued if the Variation Certificate Application is not determined beforehand.

4. Consultation requirements for development will be standardised with a single State-wide Community Participation Plan.

Section 2.23 of the EP&A Act will be amended to establish a single community participation plan about how and when planning authorities will undertake community participation when exercising relevant planning functions.

5. Standard conditions of consent

Section 4.17 of the EP&A Act will be amended to impose standard conditions of consent, with a development consent being subject to conditions prescribed by the regulations and specified by a State environmental planning policy.

6. Deemed refusal rights expanded

The previous 6 month time period to commence a deemed refusal appeal will now be removed. Section 8.10(2) will be inserted into the EP&A Act to allow an appeal by an applicant for development consent, or for a modification of a development consent, against a deemed refusal under section 8.11 to be made at any time after the expiry of the period prescribed by the regulations for the determination of the application for development consent or the modification of the development consent, and before the consent authority determines the application.

7. Regional planning panels and outdated assessment pathways will be removed

Sydney district and regional planning panels, together with outdated assessment pathways, will be removed.

For further information about the amendments made to the EP&A Act by the Planning System Reforms Act, please contact Patrick Holland and Ben Swain from our Planning and Environment team.

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Authored by: 

Patrick Holland, Partner
Ben Swain, Special Counsel
Eva Zofrea, Paralegal