By Aaron Gadiel, Partner

The NSW Government has released a proposal for a new state environmental planning policy that would change planning controls on climate change, coastal hazards, flooding, bush fires and urban heat. The proposals are vague.  Several of the flagged changes are likely to make it harder to get approval for some development applications.

The proposal is for a new ‘Climate Change and Natural Hazards State Environmental Planning Policy’ (Climate Change and Natural Hazards SEPP) to replace the State Environmental Planning Policy (Resilience and Hazards) 2021 (the Resilience and Hazards SEPP).  Some parts of the existing Resilience and Hazards SEPP would be moved into other SEPPs.

The Government has not released the proposed legal text, only a high-level ‘explanation of intended effects’.   The proposal is on exhibition until 16 March 2026.  Public submissions can be made by this date.

The Government says that the ‘proposed policy introduces a clear, consistent framework for tackling current and future risks, including climate change and natural hazards… and rebuilding after natural disaster’.

‘The policy will support the new object in the Environmental Planning and Assessment Act 1979 (the EP&A Act) to better respond to these risks and make decisions that reflect the level of risk involved,’ the Government says.

As part of the exhibition, the Government has also released (and invited comment on):

• draft Climate Change Scenario Guidelines that outline climate scenarios to be used with natural hazard frameworks; and
• an Urban Heat Policy for Land Use Planning detailing objectives and planning principles to ‘build resilience’ to urban heat.

The Climate Change and Natural Hazards SEPP itself would govern the determination of development applications.  However, a ministerial direction is also proposed.  The ministerial direction would have complementary provisions and apply to ‘planning proposals’ (ie proposals for rezonings and changes to environmental planning instruments).

This article summarises some key aspects of the exhibition material from the perspective of a property developer.  It does not attempt to deal with all aspects of the proposals.

Projected changes as a result of climate change

The Government proposes that the Climate Change and Natural Hazards SEPP will include new mandatory considerations for consent authorities when determining a development application:

• consider climate risk and natural hazards, taking into account projected changes as a result of climate change;
• minimise risk to development from climate risk and changing natural hazard exposure as a result of climate change;
• consider if the development is appropriately designed, constructed and operated to be resilient to the future impacts of climate change; and
• use the appropriate prescribed climate scenarios for the relevant development assessment decision, as directed by the Climate Change Scenario Guidelines (a draft exhibited with the explanation of intended effects).

The draft Climate Change Scenario Guidelines focus on the issues of bush fire, coastal hazard, flooding and urban heat.  The guidelines identify the future climate scenarios that are likely to be most relevant for planning and consent authorities to consider given the scale, context and lifetime of a proposed development.

Urban heat

The explanation of intended effects says:

• The design of urban areas can amplify extreme heat and heatwaves and expose communities, including people with greater vulnerability to heat and higher temperatures. Developments with large areas of dark, hard surfaces that absorb heat, such as buildings, roads and parking areas may contribute to this.
• A growing number of designers and developers are demonstrating that heat-mitigating outcomes can be achieved through ‘minor adaptations’ to existing practices using greening, water sensitive urban design, passive design and building materials.
• When considered early, the layout of streets and buildings, retention of existing native vegetation and integration of greenery, water, passive cooling and cool materials can create ‘cool and comfortable places to live for our communities’.

The draft Urban Heat Policy for Land Use Planning is proposed to apply statewide to all development and land use planning decisions for urban areas including:

• strategic planning;
• precinct and master planning;
• planning proposals;
• major projects;
• local planning;
• planning controls; and
• development applications.

The draft document says that — despite the statewide application — planning responses should be ‘proportionate and place-based’, recognising that ‘heat impacts are unevenly distributed across the state’.  For example:

• geographically, areas such as Western Sydney and the Far West and Central West regions will experience greater increases in average temperatures and the number of hot days, compared to coastal areas that are likely to experience a smaller but still notable temperature increase.
• certain people and groups are more vulnerable to heat impacts due to physical characteristics that increase their risk to heat-related illness (such as underlying health conditions or age), and socio-economic circumstances that limit their capacity to respond to higher temperatures.

The draft Urban Heat Policy for Land Use Planning sets out the following principles to be applied to build resilience to urban heat:

• Consider the urban heat context of the land use planning decision or proposed development (including considering future climate and demographic data for the local area, community vulnerability to urban heat, the lifetime of the planning decision and built form in the context of climate change).
• Incorporate planning and design measures in development to support community adaptation to increased heat (including designing urban structure to retain and integrate existing natural assets and enhance passive cooling, incorporating greening and water into new development for cooling, and minimising heat absorbent materials and surfaces).
• Design buildings and public spaces to support wellbeing during heatwaves and hot days (this may include providing adequate shading along active transport routes and designing cool refuges in homes and public buildings that are accessible to the community, such as libraries and community centres).

The Urban Heat Policy for Land Use Planning would be given statutory effect — for development applications — by the Climate Change and Natural Hazards SEPP.

The explanation of intended effects says that urban heat provisions in the Climate Change and Natural Hazards SEPP would be ‘flexible and outcomes-based’ and could require consent authorities to consider whether a proposed development incorporates planning and design measures to support cooling.  It says that the provisions ‘would elevate and coordinate these measures to address urban heat alongside those other environmental considerations’.

The proposal flags the potential for:

• triggers for provisions which may be determined according to the size and value of development, or types of development (eg subdivisions, hospitals, schools, aged care facilities etc); and
• heat risk assessments and/or hazard mapping in conjunction with urban land use zones.

It appears that these provisions may make it more challenging/costly to pursue development consent, by:

• requiring additional assessment documents;
• erecting outright hurdles; and/or
• by creating an expectation of design measures that may undermine project feasibility.

This may impact on a wide range of new development, but seniors housing developments may be at greater risk under these provisions, relative to other development types.

Bush fire

The Climate Change and Natural Hazards SEPP will include objectives to ‘complement and support compliance with the relevant Bush Fire Protection Planning guide’.  This could require consent authorities to make decisions as follows:

• Avoid inappropriate developments in high-risk bush fire locations or circumstances, in particular development of a higher vulnerability such as for a ‘special fire protection purpose’ (eg seniors housing, a manufactured home estate or caravan park).
• Ensure areas identified for population growth and development are planned and designed to improve resilience and minimise the risk of bush fires to life and property.
• Plan for the impact of changing climate conditions on bush fire behaviour in areas identified for population growth and development.
• Ensure development includes adequate evacuation capacity and capability for existing and future communities in the event of a bush fire.
• Consider bush fire risk in a landscape context and identify and consider the cumulative impacts of bush fire risk for existing and future communities.
• Consider whether development in high-risk bush fire locations or circumstances avoids or mitigates bush fire impacts on property and environment.

The introduction of some of these matters for consideration at a development application stage would seem to undermine the zoning of the land (which generally assumes that some of these matters have been considered at a strategic land use planning stage).

Additionally, other matters listed above are already dealt with in Planning for Bushfire Protection 2019 (which is flagged for updating).  It seems duplicative to now also require such matters to be addressed under the new Climate Change and Natural Hazards SEPP.

Coastal hazards

According to the explanation of intended effects, nine councils have a coastal risk planning clause in their local environmental plans, and 48 councils have other coastal related provisions.

It appears that some rationalisation of these provisions is proposed.  The extent is unclear.  It may be that new provisions of the Climate Change and Natural Hazards SEPP will replace these existing provisions, or work in conjunction with some refined version of them.

The Resilience and Hazards SEPP currently provides for, but does not make great use of, mapping of ‘coastal vulnerability areas’.  The explanation of intended effects proposes that local council mapping on this subject might be rolled-into expanded mapping under the Climate Change and Natural Hazards SEPP.

Flooding

The explanation of intended effects proposes to move the current standard flooding clause in local environmental plans (clause 5.21) into the new Climate Change and Natural Hazards SEPP.  In making this change, the clause would be ‘updated’.  In this regard, a change relating to ‘shelter-in-place’ is proposed (‘in line with the Department’s Shelter-in-place guideline for flash flooding’).

The actual legal wording is not disclosed.  It is unclear whether this change will support the use of shelter-in-place or make it more difficult to put that option forward in development applications.

There is also a proposal to move the existing ‘special flood considerations’ clause that appears in some local environmental plans (as clause 5.22) into the Climate Change and Natural Hazards SEPP.

The explanation of intended effects invites local councils (who are not one of the existing 42 local councils who are subject to this clause) to identify if they would like to opt-in to clause 5.22.

It is proposed to ‘update’ the clause to:

• standardise the sensitive and hazardous land uses to which it applies; and
• make changes relating to risk-based decision making, coincident flood and coastal hazard impacts, consideration of shelter-in-place and other evacuation related issues.

Again, the actual legal wording is not disclosed.  It is unclear whether this change will make it more difficult to secure development consent or make it easier.

There is also a proposal for the SEPP to give direct effect to local council flood planning maps, but not to incorporate these maps into the digital statutory maps maintained by the NSW Government.  This seems like a retrograde step.

Housing SEPP changes

The explanation of intended effects flags changes to the State Environmental Planning Policy (Housing) 2021 (the Housing SEPP).

The actual legal wording is not disclosed, nor is a clear statement of their substance made.

Rather, it is said that these changes will:

• ‘ensure consistency’ in bush fire, flood and coastal hazard considerations under the ‘diverse housing’ provisions;
• affect land-based exclusions for manufactured home estates and low and mid rise development as complying development on land affected by coastal hazards;
• affect the list of ‘environmentally sensitive land’ on which seniors housing development is not able to be carried out under the seniors housing provisions of the Housing SEPP; and
• introduce consideration of flood prone land to housing for seniors, people with a disability and group homes (similar to bush fire prone land considerations).

Some of this is likely to make it more difficult to pursue some developments, but some provisions may be beneficial.  The vagueness of the proposals means that the effect is unclear.

Savings and transitional provisions

The explanation of intended effects says that there will be savings and transitional provisions, but it does not explain what they would say.

This means it is unclear if development applications that are pending (when the new Climate Change and Natural Hazards SEPP is finalised) will be subject to some of the new provisions.

Bottom line

The proposals are unusually vague.  We normally expect to see a more precise description of proposals in this type of exhibition process.

We can say that some of the proposed changes are likely to make securing approval for some development applications more difficult. We cannot say for sure that anything will be made easier.

Taken at face value, the proposed changes do not seem to sit well with the Government’s current push to boost housing supply.  We hope to be pleasantly surprised when the legal text is released.