By Aaron Gadiel, Partner

The release of the first 12 draft ‘local strategic planning statements’ has exposed a major flaw in Sydney’s newest strategic land use planning regime.

In recent weeks, the first draft local strategic planning statements have been published by the following local councils:

• Campbelltown;
• Canada Bay
• Cumberland;
• Fairfield;
• Georges River;
• Ku-ring-gai;
• Liverpool;
• Mosman;
• North Sydney
• Ryde;
• The Hills; and
• Waverley.

The issue in a nutshell

Local councils are preparing 7-year local strategic planning statements before their individual dwelling targets for a new development pipeline are agreed (with the NSW Government).

All twelve draft local strategic planning statements lack any dwelling targets for any new development pipeline in 2021-2026.  (Targeted dwelling production before 2021 is simply based on existing zoned/planned measures.)

In short, it looks as if the 7-year local strategic planning statements will be finalised (and agreed to by the Greater Sydney Commission) without any actual number specifying the size of the new development pipeline each local government area must facilitate for 2021-2026.

Background

Housing targets by 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.

Instead the NSW Government released the current metropolitan plan in March 2018:  the Greater Sydney Region Plan: A Metropolis of Three Cities.

Greater Sydney Region Plan: A Metropolis of Three Cities

Unlike the 2014 A Plan for Growing Sydney, the 2018 (current) A Metropolis of Three Cities does 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 does anticipate that changes to planning controls will be required for new housing supply to be made available in the second planning period: 2021 to 2026.  This requires:

• the preparation of ‘housing strategies’; and
• the development of 6–10 year local government area housing targets.

(2016 is the base year; hence these are targets for 2021 to 2026.)

Unlike past plans, the local government area-specific housing targets are not now to be set unilaterally by the state government.  Instead, A Metropolis of Three Cities says that — between September 2019 and March 2020 — these targets will be agreed between each local council and the Greater Sydney Commission.

The associated housing strategies for each local government area are supposed to:

• outline how housing growth is to be managed;
• identify the right locations for additional housing supply and inform updates of local environmental plans.

Updated local environmental plans that respond to housing strategies are supposed to be ‘submitted’ by March 2021 — or by March 2020 in the case of ‘priority councils where funding has been provided’.  However, no legally binding direction has published to facilitate the enforcement of this timetable (such an order could be made under section 9.1 of the Environmental Planning and Assessment Act 1979).

Additionally, it is unclear whether the ‘submission’ of an updated local environmental plan by March 2020 or 2021 means that:

• it should come into effect by those dates; or
• it should be merely submitted for gateway determination (which might mean that the actual local environmental plan changes may not come into effect for another 1-2 years later, if ever).

To be fair, A Metropolis of Three Cities does set long-range (2016–2036) housing targets for each district.  For example, it says that the ‘Eastern City’ district will deliver 157,500 extra homes in this period.  However, the ‘Eastern City’ comprises nine local government areas: Bayside, Burwood, Canada Bay, City of Sydney, Inner West, Randwick, Strathfield, Waverley and Woollahra.  With such a broad target over such an extended period, it is easy for any individual local council to:

• argue about the share of the planned housing growth that should be attributed to its area; and
• argue that the required growth needs does not need to be in the next update of the local environmental plan (but can be deferred to a later update).

Local government area dwelling targets right now

The last NSW Government-imposed (local government area) dwelling targets for a ‘new pipeline’ of Sydney housing were published in 2008-2009.  Those targets are, of course, well out-of-date.

The current local government area specific dwelling targets are those that were set by the Greater Sydney Commission last year (in its district plans) to reflect the ‘existing development pipeline’.  Accordingly, the (frequently heard) boasts of many local councils that they are presently ‘meeting their targets’ is hardly surprising.

The challenge for the next phase of strategic land use planning is to identify the extent to which individual local councils must contribute to a new development pipeline (resulting in new dwelling completions in the period 2021 to 2026).  For most areas, this will require changes in current zoning and planning controls.

Such targets have not yet been set.  Under A Metropolis of Three Cities the targets will only be set once there is agreement between the Greater Sydney Commission and each local council.

Time is plainly running short, given the extensive lead times involved in:

• carrying out strategic land use planning;
• making changes to planning controls;
• obtaining development consent; and
• completing projects.

Local strategic planning statements

The NSW Government has mandated that each Sydney local council must prepare a local strategic planning statement by 31 March 2020 (with drafts to be placed on exhibition by 1 October 2019).

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 a local environmental plan) will need to address whether the proposal will give effect to the local strategic planning statement.

Each local strategic planning statement must include or identify the following:

• the basis for strategic planning in the area, having regard to economic, social and environmental matters;
• the planning priorities for the area that are consistent with any strategic plan applying to the area;
• the actions required for achieving those planning priorities,
• the basis on which the council is to monitor and report on the implementation of those actions.

The Environmental Planning and Assessment Act 1979 (the EP&A Act) anticipates the statements will have a life of up to seven years (before they are reviewed and updated).

The first draft local strategic planning statements

The first 12 draft local strategic planning statements have recently been placed on public exhibition.  We have briefly looked at each to see how they have dealt with the need to adjust planning controls to permit new housing supply in the period 2021 to 2026.  This is what we have found:

• Campbelltown. The draft statement boasts that the area will meet the district plan’s 6,800 additional ‘existing development pipeline’ target for the period 2016-2021.  The draft statement identifies moderate and high growth dwelling scenarios — an extra 233,150 and 275,000 dwellings respectively by 2036.  No dwelling target is given for 2021 to 2026.  There is an ‘action’ that a future housing strategy will provide the evidence base for Campbelltown City’s 10-year and 20-year housing targets and dwelling mix.
• Canada Bay. The draft statement references a draft housing strategy.  The draft strategy apparently says that 14,450 additional dwellings will be required by 2036.  The draft statement does not refer to the setting of any targets for additional housing supply in the 2021 to 2026 period.
• Cumberland. The draft statement does not make reference to any specific housing targets.  There is an action item to complete studies — to inform locations for housing supply and review planning controls.
• Fairfield. The draft statement says the area’s housing target for the period 2016-2021 ‘will be developed iteratively through Council’s Local Housing Strategy’.  The preparation of the housing strategy is an ‘action’ in the statement.
• Georges River. The draft statement anticipates a future population growth rate nearly half that of the past growth rate (future: 0.9 per cent per annum; past: 1.7 per cent per annum).  The statement says that existing planning controls would already permit an extra 12,000 dwellings. It says that an additional 14,000 dwellings are required to 2036.  Accordingly, it anticipates that planning controls only need to be adjusted to accommodate an extra 2,000 dwellings by 2036.  While a target of 4,450 dwellings for 2021-2016 is set, it would seem that the Council is saying that no change in the local environmental plan is required to achieve this number.  A housing strategy is to be completed in the ‘short to medium term’.  This strategy is to provide ‘housing targets, a hierarchy of residential zones… and … [is to address] housing diversity’.   However, there is a ‘short-term’ action item to ‘[f]acilitate a broader range of housing types across the LGA through rezoning land, including controls for medium density development and investigating the adaptive re-use of large houses’.
• Ku-ring-gai. The draft statement references the 0-5 year dwelling target in the district plan (4,000) dwellings, but observes that this is ‘consistent with delivery potential under existing planning controls’.  Further dwelling targets are not set.  There is an explanation that ‘[e]ach council is … to determine in conjunction with the Greater Sydney Commission, what portion of housing it will contribute to the [district-wide] … target over the 20 year period, 2016 to 2036’.  There is a commitment to a housing strategy that will provide ‘evidential demonstration’ of future housing supply needs in five-year increments from 2016 to 2036.
• Liverpool. The draft statement details a study that says there will be demand for an additional 43,452 dwellings between 2016 and 2036.  The draft statement also says that ‘there is no pressure to zone more land for residential development over the next 20 years’.  It says that ‘Council’s preference is for density to be focused in the City Centre and close to centres with good public transport accessibility’.  No target is set for the period 2016-2021.  That is, there is no immediate urgency for changes to planning controls.
• Mosman. The draft statement says that a local housing strategy will be completed by December 2019.  The strategy is to ‘ensure sufficient housing is delivered to meet community needs and demand’.  There is no reference to the setting of any targets for additional housing supply in the 2021 to 2026 period.
• North Sydney. The draft statement refers to the ‘existing development pipeline’ 0-5 year housing target and affirms that it is on track.  The statement warns against an ‘oversupply of residential capacity’ in St Leonards.  There is an action item to identify a 6-10 year housing target in the future.
• Ryde. The draft statement highlights the ‘existing development pipeline’ target of 7,600 new homes for the period 2016-2021.   The draft statement says this can be met as a result of past amendments to planning controls.  It says a housing strategy will be completed by June 2020.  This strategy would include ‘targets for 5 to 10 years and 10 to 20 years’.  The statement says that residential development is to be encouraged within existing centres that are well serviced by public transport, community infrastructure and open space.
• The Hills. The draft statement refers to the ‘existing development pipeline’ 0-5 year housing target and affirms that it ‘will exceed’ the target.  It says that ‘[w]ithin existing zoned and planned residential land’ an additional 38,000 dwellings will be delivered by 2036 — with a capacity for further 38,100 dwellings beyond 2036.  These numbers are drawn from a draft housing strategy that is being exhibited alongside the draft statement.  A 10-year target is set for 18,500 dwellings and a 20-year target is set for 38,000 dwellings.  The draft statement includes an action item to focus on facilitating dwelling completions in areas already ‘zoned or planning for growth’.
• Waverley. The draft statement explains that the council is preparing a local housing strategy that will identify how the council ‘will manage infill development into the future and how development must be preceded by sufficient infrastructure’.  This strategy would develop a ‘6-10 year’ housing target.

Of the first 12 draft local strategic planning statements, 10 make no commitments on any housing supply target in 2021 to 2026 period.  Each defer that decision indefinitely into the future.  Two draft statements — Georges River and The Hills — commit to a housing target in 2021 to 2026 period.  However, these commitments are made on the basis new plans to provide for additional supply above existing plans are not required.  That is, it is a ‘business as usual’ position.  These numbers appear to have set in isolation — without considering whether other local government areas can achieve the necessary dwelling production to achieve the district-wide goals.

The bottom line

The NSW Government has set-up a process that appears to be flawed.  It is requiring exhibition of draft local strategic planning statements by 1 October 2019, but is giving local councils and the Greater Sydney Commission until up to March 2020 to agree on the target for ‘new pipeline’ housing supply.

While, so far, two local councils have got ahead of the game and proposed actual targets for the next five-year (2021 to 2026) period — their numbers simply reflect the existing development pipeline.  They appear to have been set in isolation — without a holistic assessment of whether other local councils can fulfil the rest of the district-wide requirements.

It is very difficult to see our how the ‘local strategic planning statements’ can be meaningful 7-year documents.  The lack of hard ‘new pipeline’ dwelling targets by which each local council can be judged (and held to account) is likely to be a serious flaw.