By Aaron Gadiel, Partner
The NSW Government is proposing some amendments to the state’s principal land use planning law. Some of these changes will be beneficial for property development. However, there are several changes that will not be welcomed by property developers.
The changes are set out in the Environmental Planning and Assessment Amendment Bill 2025. This proposed law was introduced into the state parliament on 19 February 2025. At the time of writing, the proposed law was awaiting formal parliamentary debate. It is not yet clear whether the proposed law will be approved by the parliament, or whether it will be amended.
In 2021 the Court of Appeal effectively overturned decades of Land and Environment Court practice. It ruled that an application that simply sought to modify conditions of development consent — and not the underlying approved development — was legally incapable of approval under section 4.55(1A), section 4.55(2) and section 4.56 of the Environmental Planning and Assessment Act 1979 (the EP&A Act).
That decision was known as Ku-ring-gai Council v Buyozo Pty Ltd [2021] NSWCA 177.
The Buyozo decision has had perverse consequences. For example, it has prevented developers from re-visiting development contributions (via a modification application) that had been incorrectly or unreasonably imposed.
It has also led to legal arguments — and cumbersome workarounds — when developers attempt to modify procedural conditions.
At the time the judgment was handed down in 2021, Mills Oakley said that planning legislation needs to be ‘quickly amended’ to sensibly deal with the implications of the decision. It seems that the Government is now finally moving on this issue — more than three years after the Court of Appeal decision!
The proposed bill will amend the various parts of the EP&A Act that govern the affected types of modification applications.
Firstly, section 4.55(1A) of the EP&A Act currently permits modification to development consent when a consent authority is satisfied that:
These two tests would be re-written to require that a consent authority is satisfied that:
Secondly, a similar amendment will be made to section 4.55(2) and section 4.56. These provisions currently permit modification to development consent when a consent authority is satisfied that the development, as proposed to be modified, will be ‘substantially the same’ as the originally approved development.
This test would be changed, for these two types of modification applications, to be the same or substantially the same as the originally approved development.
This measure is a welcome return to the position that was commonly thought to apply prior to 2021. It removes some undesirable red tape for property developers.
A development application seeking development consent for a concept proposal is a special category of development application.
A concept development application is a development application that:
A consent granted on the determination of a concept development application for a site sets the parameters for the determination of any further development application in respect of a site.
Putting aside any detailed proposals for the first stage of development:
Concept development consents ‘lock-in’ a concept for a proposed development but permit detailed plans for each subsequent stage of the development to be submitted at a later time — in a ‘detailed’ development application.
A concept development consent does not conclusively determine the actual development that will be carried out on the site (other than in relation to any detailed proposals that form part of the first stage of the concept proposals).
Concept development consents are widely used for major development in the City of Sydney. They are also sometimes used in other local government areas.
Section 4.24(2) of the EP&A Act says that — while a concept development consent remains in force — the determination of any further development application in respect of the site cannot be inconsistent with the consent for the approved concept proposals.
When detailed plans are prepared for a further development application, it is often the case that the final design differs from the concept proposals approved by a concept development consent.
A concept development consent can be modified, provided the standard ‘substantially the same’ test is met. This will usually address the situation satisfactorily. That is, a modification application may be submitted for the concept development, along with a parallel detailed development application (which matches the concept proposals as proposed to be modified).
However, sometimes developers will seek to pursue a new development application that proposes something materially different from the concept proposals that have been approved by a concept development consent. This has been an issue lately — where developers have sought to include ‘infill affordable housing’ (with extra height and floor space) when there are already legacy concept development consents in place (approved before the ‘infill affordable housing’ provisions came into effect in December 2023).
One way to deal with this has been to surrender the concept development consent up-front, to allow the inconsistent development application to be determined without breaching section 4.24(2) of the EP&A Act. However, this may be undesirable. For example, this course of action would require a developer to surrender a concept development consent before the developer has any assurance that the new development consent will be granted.
For this reason, another approach has been to submit a development application that seeks the imposition of a condition in the new development consent that would require the surrender or modification of the existing concept development consent.
When a new consent is subject to such a condition, it makes available a streamlined process for the modification of the earlier development consent. This streamlined process does not require any merit assessment — and there is no need to apply the ‘substantially the same’ test.
There have been legal arguments in court about whether — while a concept development consent is still in force — a new development consent can lawfully be granted for an inconsistent development — even if it includes a condition requiring the surrender or modification of the earlier development consent.
There has been one Court ruling that says this can be done: Castle Hill Panorama Pty Ltd v The Hills Shire Council [2023] NSWLEC 24.
However, the Government is apparently not certain that this Court decision sufficiently clarifies the issue.
As a result, the proposed law would insert a new provision into the EP&A Act that expressly says that section 4.24(2) does not prevent the determination of a further development application for the site that is inconsistent with the concept development consent — so long as the new consent is granted with a condition requiring the modification or surrender of the concept consent.
This clarity should be welcomed by property developers.
The EP&A Act requires local councils to have a ‘local strategic planning statement’ and review the statement at least every seven years.
Proposals for rezoning or change local environmental plan controls (planning proposals) have to explain whether the proposal will ‘give effect’ to the applicable local strategic planning statement.
As a result, when pursuing changes to the planning controls, the provisions of a local strategic planning statement are often be cited by a local council as a reason for blocking a proposed change to planning controls.
Most local strategic planning statements are prepared in a way that make it difficult for rezonings or uplifts in planning controls to be pursued. Most statements lack any meaningful targets for new additional housing, commercial floor space or industrial floor space production. The absence of such targets is often complemented by sweeping statements that no development uplift is needed (outside some very narrow areas favoured by the local council at the time that the statement was prepared).
The EP&A Act presently contains a safeguard that is designed to provide the NSW Government oversight of the finalisation of local strategic planning statements in Sydney, the Central Coast, the Lower Hunter, Greater Newcastle and the Illawarra-Shoalhaven.
Section 3.9(3A) of the EP&A Act says that a local council in these areas cannot finalise a local strategic planning statement unless the Secretary of the Department of Planning, Housing and Infrastructure has issued written advice that the statement is consistent with the applicable state-determined regional and district strategic plans.
The proposed law will delete this provision. This means that local councils in the metropolitan area will be given even greater freedom to develop strategic planning policies that do not provide for the new development potential anticipated by state-level strategic plans.
Given the current view of the NSW Government that local councils have been a blockage for new housing supply, it is surprising that the Government is now seeking to legislate away its oversight role for metropolitan area local strategic planning statements.
This change would seem to undermine efforts to get local councils to deliver outcomes in-line with state government housing and urban development priorities.
Housing targets for each local government area have been accepted as crucial to Sydney’s land use strategic planning since the 2005 City of Cities metropolitan strategy.
For example, the NSW Government’s 2008 draft subregional plan for the Inner West not only identified the need for 30,000 extra dwellings for the subregion to 2031 — but also apportioned those dwellings between different local government areas.
It was widely accepted that such dwelling targets were needed to ensure that subsequent plans prepared by local councils could be objectively evaluated (so as to be sure that each local council was planning for its fair share of Sydney’s anticipated housing needs).
This approach was taken forward (at least in theory) by subsequent metropolitan plans.
The Metropolitan Plan for Sydney 2036 (released in 2010) promised that the NSW Government would finalise subregional strategies that would include updated local government area dwelling targets. These subregional strategies were never finalised.
In 2014, the NSW Government released A Plan for Growing Sydney. This new metropolitan strategy said that the government would use its ‘subregional planning process’ to set five-year local housing targets that ‘maximise the opportunities to growing housing supply’ through new ‘enabling planning controls’. The government said that it was going to ‘accelerate housing supply and local housing choices’ by directing the Greater Sydney Commission to facilitate five yearly updates of the local council housing targets.
No subregional plans were ever released under the 2014 A Plan for Growing Sydney strategy.
Instead, the NSW Government released the current metropolitan plan in March 2018: The Greater Sydney Region Plan: A Metropolis of Three Cities.
Unlike the 2014 A Plan for Growing Sydney strategy, the 2018 (current) A Metropolis of Three Cities did not anticipate any changes to planning controls to add to housing supply in the initial 2016-2021 planning period. Targets were set for this period, but these simply reflected the ‘existing development pipeline’.
A Metropolis of Three Cities did anticipate that changes to planning controls would be required for new housing supply to be made available in the second planning period: 2021 to 2026. This required:
(2016 is the base year; hence these were to be targets for 2021 to 2026.)
Unlike past plans, the local government area-specific housing targets were not to be set unilaterally by the state government. Instead, A Metropolis of Three Cities and its associated district plans merely said that these targets were to be ‘agreed’ between each local council and the Greater Sydney Commission.
As a result, local housing targets were unlikely to threaten local councils. Each council was able to simply veto a housing target that was politically unacceptable to it.
This arrangement was criticised by industry figures. They argued that the lack of state-led target-setting was always likely to deliver housing targets that fall short (of what population growth and demographic change require).
In 2022, the former Coalition state government apparently recognised this deficiency. It changed the EP&A Act to require that when the Greater Cities Commission (the renamed Greater Sydney Commission) prepared new district plans, it must include dwelling targets for each local government area. There was no requirement that these targets be agreed to by local councils.
While this, in theory, was an improvement on the previous situation, the targets were to be developed as part of new district plans for the metropolitan area. The body charged with preparing those new plans — the Greater Cities Commission — was abolished by the current NSW Government last year.
No new district plans have been finalised. The current district plans date back to 2018.
The current legislation makes the Secretary of the Department of Planning, Housing and Infrastructure responsible for preparing and finalising district plans. This is an odd situation because good district plans will:
It is unusual that such an important decision-making function is solely vested in a public servant, rather than a state minister.
The proposed law does not do anything to fast track the preparation of new district plans. However, it does establish a new role for the Planning Minister to:
Hopefully, if these proposed laws are passed by parliament, we will now see some action from the NSW Government — to actually set meaningful housing targets that will force local councils out of their comfort zone.
When the current legal regime for planning panels was legislated, non-government parties forced the NSW Government to accept an amendment to the legislation requiring that panel meetings take place in public.
This requirement is set out in clause 25 of Schedule 2 of the EP&A Act.
This provision requires panels — such as regional and district panels, local planning panels and the new Housing Delivery Authority — to conduct their meetings in public.
There is also a requirement for panels to record meetings conducted in public (whether an audio/video record, an audio record or a transcription record). The recording is required to be made publicly available on the panel’s website.
In our experience, this provision is frequently breached by regional/district planning panels and local planning panels. It is commonplace for there to be a public component of a meeting, but also a private component, in apparent violation of clause 25 of Schedule 2 of the EP&A Act.
The NSW Government has tolerated this situation for some time.
Additionally, there is also a requirement that — when the panel makes a decision outside of a meeting (by circulation of papers) — any decision made in that way is to be published on the panel’s website. This requirement is set out in clause 26(3) of Schedule 2 of the EP&A Act.
It seems that the Government is now concerned at the prospect that someone may insist (in court) that the new Housing Delivery Authority:
As a result, the proposed change to the law will allow the Planning Minister to make regulations to exempt some or all planning panels from the requirement for public meetings (and public availability of recordings of meetings).
The proposed law specifically includes a new regulation to exempt the Housing Delivery Authority from the above requirements. The Minister would have the discretion to extend this exemption to other panels by regulation in the future.
Affordable housing contributions for new development have become a centrepiece of land use planning policy in recent years.
The full extent of the current safeguards against excessive or unreasonable affordable housing contributions are often not appreciated by local councils and, even, developers.
In particular, at present, no affordable housing contribution can be imposed (even if authorised by a state environmental planning policy or local environmental plan) unless at least one of three scenarios applies:
This safeguard is set out in section 7.32(1) of the EP&A Act.
We have seen instances where local councils have imposed affordable housing contributions where it is highly debatable as to whether any of these scenarios actually exist.
For example, the City of Sydney now routinely imposes affordable housing contributions on new residential development that is merely replacing or expanding existing premium residential development. It might be thought that such development neither reduces the availability of affordable housing, nor creates a need for affordable housing in the area.
Clearly, someone (local councils?) have been lobbying on this point.
The Government is now proposing to scrap this safeguard. In our view, this will legitimatise the current practice of requiring affordable housing contributions from new development that (on one view) does not reduce the availability of (or increase the need for) affordable housing in an area.
The minimum public exhibition period for an application for development consent for most types of state significant development that includes residential accommodation is proposed to be reduced from 28 days to 14 days.
At present, there are two ways that a development may become ‘state significant development’.
Firstly, it can declared as ‘state significant development’ in a state environmental planning policy. This is normally done via an amendment to the State Environmental Planning Policy (Planning Systems) 2021.
Secondly, the Planning Minister can call-in a specified development and make it ‘state significant development’ by a ministerial planning order.
However, this second pathway has been sparingly used since the abolition of the ‘Part 3A’ approval stream in 2011.
One reason for infrequency of use of the ad-hoc call-in power is likely due to the requirement that — before that power is exercised — the advice of the Independent Planning Commission must be obtained. (This ‘safeguard’ was introduced when Part 3A was repealed.)
The proposed law will remove the requirement for the advice of the Independent Planning Commission to be obtained if the development involves residential accommodation.
It seems that the Government intends to make residential development — that is supported by the Housing Delivery Authority — ‘state significant development’ by use of this revised call-in power.
The Government says that involving the Independent Planning Commission would merely duplicate the role of the Housing Delivery Authority.
It is not yet clear whether these proposals will pass through parliament. If the legislation passes parliament, the above changes will come into effect quickly, once the Governor gives ‘assent’.
There are no transitional provisions relevant to the above measures. So, it is anticipated that, in relation to modification applications and concept development consents, the reforms will apply immediately to any pending applications.
The proposed legislation contains some welcome reforms to planning legislation.
However, the deletion of provisions that:
are, in our view, poorly considered and work against the Government’s stated policy objectives.
If you would like further information or have any queries regarding other matters, please do not hesitate to contact:
