By Aaron Gadiel, Partner

Two NSW Government signature policies — ‘local strategic planning statements’ and the ‘low rise medium density housing code’ have been delayed yet again.

The Government formalised the delays last Friday (28 June 2019) by publishing changes to planning regulations and the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008).

The delays are likely to deepen industry scepticism about whether the (much-talked-about) policies will be delivered in a timely and effective way.

Local strategic planning statements

Until last year, there were five layers of statutory land use planning documents in Sydney. These were:

• state environmental planning policies;
• regional strategic plans;
• district plans;
• local environmental plans; and
• development control plans.

Outside of Sydney there were four layers of statutory land use planning documents (the same list as above, but without the district plans).

However — as a result of changes to the law in March 2018 — the state’s planning laws now require an additional layer of planning.  This new type of document is a ‘local strategic planning statement’.  This document must be prepared and adopted by each local council.  It must set out planning priorities and actions within each local council area.

The local strategic planning statement is not a legal document that sets out the formal zoning of land and what is permitted/prohibited in each area.  This role still rests with local environmental plans.

However, any planning proposal (for a change in planning controls) will need to address whether the proposal will give effect to the local strategic planning statement.

Planning Minister Rob Stokes has also expressed a desire that comprehensive strategic planning be completed — with a view to making spot rezonings unnecessary.  Right now, many local council officers and planning panels think that changes to planning controls for individual sites should not be progressed until local strategic planning statements are finalised.

Originally all Sydney local councils were obliged to finalise their local strategic planning statements by 1 July 2019.  However, this timetable began to unravel very quickly.

The government abandoned its original timetable in September last year.   Sydney councils were given an extra five months — until 1 December 2019 — to finalise their statements.  This change was accompanied by a new requirement to exhibit a draft strategy by 1 July 2019. This revised timeline has now also collapsed in a heap.

On Friday last week (28 June 2019) the government amended planning regulations to give Sydney local councils a further four months — until 31 March 2020 —to finalise their local strategic planning statements.

Sydney councils are now only obliged to exhibit their draft local strategic planning statements by 1 October 2019 — a three-month extension on the current date.

All of this will be familiar to people who closely follow land use planning in Sydney and NSW.

There is a long history of mandated timetables for the completion of strategic land use planning being ignored, revised and ultimately discarded.

For example, when the ‘Standard Instrument’ was introduced in 2006, Sydney local councils were each required — between 2008 and 2011 — to complete a new principal local environmental plan that reflected the latest metropolitan strategic plan.  Generally speaking, the mandated timetable was not met.

While the ‘standard instrument’ format local environmental plans were eventually rolled-out across Sydney almost all of them did not give effect to the metropolitan plan.  In general, the necessary ‘strategic reviews’ were generally deferred (and — for most Sydney local councils — not completed).

More recently, in 2016, the NSW Government informed the newly-amalgamated local councils that — after the September 2017 elections — local councils will need to present planning proposals to the newly elected council to harmonise the different comprehensive local environmental plans applying to former council areas.  This did not generally happen.  Amalgamated councils still feature local environmental plans that reflect former council boundaries.

There are two key reasons why local councils have not met past timelines —— and may not even meet the new revised timelines.

Firstly, in Sydney, to faithfully implement the Greater Sydney Region Plan: A Metropolis of Three Cities local councils must make politically contentious decisions.  This may mean providing for extra housing, employment and retail capacity without delivering on a ‘wish list’ of politically attractive infrastructure projects.  Local councils seem to prefer inaction or delay when implementation of the metropolitan plan would aggravate local ratepayers.

Secondly, the NSW government can take action against a local council that fails to exhibit or finalise a local strategic planning statement within the required time.  The government could appoint a planning administrator to take the necessary action.  However, the appointment of a planning administrator is regarded as an extreme step.  Such action is likely to be avoided by the NSW government.  Local councils know this — so they do not perceive there to be any real consequence for their delay or inaction.

If a local strategic planning statement is progressed by a local council, the statement cannot actually be finalised unless the Greater Sydney Commission:

• supports the statement in writing; and
• says that the statement is consistent with the applicable regional and district strategic plans.

In the past, local council strategic planning proposals were frequently not consistent with state-prepared plans.  If the Greater Sydney Commission adopts a rigorous process (as the Department of Planning did when it had an oversight role previously) significant delays can be expected.  The delays would occur between:

• the submission of a proposed local strategic planning statement to the Commission; and
• any approval by the Commission.

Such delays would likely mean that even the new 31 March 2020 delivery date (for Sydney local strategic planning statements) would not be achieved.

If the 31 March 2020 deadline is to be achieved, it would (in my view) only be because either:

• local councils abandon their traditional reluctance to faithfully implement state-level strategic plans; or
• the Greater Sydney Commission adopts a relaxed approach when checking the local strategic planning statements for consistency with state-level strategic plans.

What does all of this mean for development proponents? The latest delay in the finalisation of local strategic planning statements — and the possibility for further delays — simply defers efforts to ensure that planning controls for key locations are reflective of current strategic planning expectations.

‘Low rise medium density housing’ code

The full introduction of the NSW Government’s ‘low rise medium density housing’ regime has been deferred in key local government areas yet again.

The aim of the new regime is to allow one-to-two storey dual occupancies, ‘manor houses’ and terraces to be developed as complying development.  This (in theory) is intended to remove the need to go to a local council to obtain approval.

The new regime also expands the permissibility of small-scale residential flat buildings (two storeys comprising 3-4 dwellings) into some residential zones.  This would also allow development applications to be made for such buildings, in some areas, for the first time.

The state government says that the new regime provides more housing choice to:

• meet different household needs ; and
• improve housing affordability.

Click here for our full article on the subject.

The new regime has applied in the following Sydney local government areas since July last year:

• Waverley;
• Ku-ring-gai;
• North Sydney;
• Blacktown; and
• Fairfield.

Until last week, the ‘Low rise medium density housing code’ was due to come into effect in 49 local government areas from 1 July 2019 (and in the City of Ryde on 1 July 2020).

However, the planning regulations were again changed last Friday (28 June 2019).  The ‘Low rise medium density housing’ regime now applies (from 1 July 2019) in just three additional local government areas: Lane Cove, Armidale Regional and Narromine.  However, it has been deferred for another four months in 46 local government areas (including the great majority of Sydney).  The new date for commencement is 31 October 2019.  (There is no change for the Ryde commencement date.)

The decision to apply the ‘Low rise medium density housing’ code in the Lane Cove local government area is not as significant as it may seem.  On 14 June 2019 the Lane Cove local environmental plan was changed to prohibit ‘multi dwelling housing’ (town houses and terraces) in the ‘R2 Low Density Residential’ zone.  This means that the price of introducing the ‘Low rise medium density housing’ code in Lane Cove has been a general reduction in the availability of land that can be used for medium density housing.

The government says that the further delay of the general introduction of the ‘low rise medium density housing’ regime is necessary to allow for the completion of a review by Professor Roberta Ryan.  However, this is the fourth change to the timeline for the introduction of the ‘Low rise medium density housing code’ since the code was first published.  There is plainly a risk that there could be further delays or other unexpected changes.

In any event, development proponents may not find the ‘low rise medium density housing’ planning regime easy to deal with in the few Sydney local council areas where it fully applies.

Firstly, new townhouses/terraces typically require new vehicle crossovers to be created on the road reserve. This means that before the complying development certificate can be issued a developer will still need to obtain the local council’s consent — under section 138 of the Roads Act 1993 — for the construction of any kerb, crossover or driveway (clause 1.17(1)(e) of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008).

Secondly, the regime introduces a very detailed and extensive system of complying development rules — well beyond anything seen before for any type of complying development in NSW.  For example, in relation to ‘multi dwelling housing (terraces)’, the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 directly sets out a series of development standards organised under 10 categories. However, it also requires that the design of the terraces must be consistent with the relevant design criteria set out in the Medium Density Design Guide.  There are 70 separate design criteria which must then be applied to the design of the development.

Thirdly, any complying development certificate may now be struck down by the Land and Environment Court as invalid if the Court decides that the development does not comply with the development standards (including the relevant design criteria set out in the Medium Density Design Guide).

Finally, local councils retain the power to impose extra requirements on the carrying out of ‘low rise medium density housing’ complying development via their development control plans (section 4.26(1)(b)(ii) of the Environmental Planning and Assessment Act 1979).  Some councils are likely to make use of this power if/when the code comes into effect in their area.