10-Day Housing And Renovation Approvals Set To Commence This Month!

From 27 February 2009, the NSW Government's new Housing Code will commence, enabling a broad range of new homes and home renovations to be approved in only 10 days, without the need for any DA or council involvement at all. The reforms aim to slash "red tape", provide certainty to landowners, encourage investment in new or renovated homes, and to free up council resources. Coupled with record-low interest rates for homeowners and increased homeowner grants, these reforms may well assist in encouraging landowners to invest in their properties, creating a stimulus for the development industry, at a time when building approvals have now slumped for the sixth consecutive month in a row.

Overview

The new codes (contained within the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (SEPP) and the NSW Housing Code – Guide to Complying Development for Detached Housing) provide a set of clear and reasonably generous design criteria such as allowable heights, building setbacks, landscaped areas and the like. Rather than a council typically taking several months or more to assess whether a DA is acceptable (the average time in metropolitan NSW is 121 days), applicants will instead be able to take their design directly to a private certifier (or to the council, if they wish), who must then adopt a "tick the box" type check on whether the design meets the pre-set criteria within the Code. If it does, a certificate of approval must be issued within 10 days. Importantly, there will be no discretion or subjectivity allowed in the decision. The assessment is purely a factual assessment of whether the design meets the pre-set criteria. Similarly, neighbours will not be given any right or opportunity to object to the application. They will be notified after the approval is issued.

The Government is aiming to achieve a situation in NSW where within four years, 50% of all housing and renovation approvals will be approved under the Code, rather than through a Council DA assessment process. Moreover, although the new Code is reasonably generous, the Government has indicated clearly that it will continue to revise the Code (perhaps biannually) to ensure that this 50% target is met. This means that if the new Code is not effective at enabling homeowners to avoid the DA process, the Code will likely be amended to be more generous to landowners/developers. In good news for developers in NSW, the Government believes that this Code will apply to approximately 80% of all project homes in NSW.

We note however that at this stage, the Code has some limitations in its application, which has caused many councils to boast that the Code will not have much effect in their council areas. In particular, the part of the Code dealing with Complying Development (new homes and significant renovations to homes) only applies at this stage to allotments greater than 450sqm and having a width/frontage of at least 12m. It does not yet assist for smaller or narrower allotments. Similarly these sections of the Code do not apply to Heritage Items or Heritage Conservation Areas, and do not apply in some land zones and to some environmentally sensitive sites/areas. Nevertheless some of these exclusions will likely be captured by subsequent versions of the Code.

At a time when significant economic stimulus is required to encourage investment and to create jobs in NSW, these reforms are gladly welcomed by the building industry and by home owners who want to undertake simple improvements but have baulked at or been discouraged by the seemingly endless red tape imposed by some councils to date.

A Closer Look

The SEPP

The SEPP - which creates categories for both exempt development (where no approval at all is needed) and complying development (where a certificate of approval is needed but no DA is needed) - has State-wide application. It will apply throughout the entire State as of 27 February 2009, subject to a number of specific exemptions as touched upon in this newsletter. The Housing Code is really only a guide to the SEPP. It is the SEPP which has legal force and standing.

Exempt development

To be exempt development, and therefore not require any form of approval (i.e. works can be carried out immediately), the development must:

1. be a type of development identified in Part 2 of the SEPP and comply with the specific standards contained in the SEPP
2. comply with the BCA or if not applicable, be structurally adequate
3. not be carried out on land that contains any Heritage Item.
4. be installed according to the manufacturer's specifications, and
5. not involve the removal or pruning of a tree or other vegetation that requires an approval

Unlike complying development, the exempt provisions apply regardless of the lot size and in a welcome departure from previous provisions, there has been a relaxation on the ability for many of these types of development to occur in conservation areas. One notable exception is cement-rendering of homes, which may not be carried out on homes within a conservation area.

There are 41 types of exempt development listed in the SEPP ranging from balconies, decks, patios, pergolas, terraces and verandahs, to carports and retaining walls. Importantly, each type of exempt development has its own specific development standards that need to be checked and complied with.

Complying development

The complying development provisions are contained in Part 3 of the SEPP. Development that is listed as complying development includes:

• New single storey and two storey dwelling houses on a lot that has an area of at least 450 square metres, and a frontage width of at least 12m, and is in a residential zone (Zones R1 - R4). However the erection of a basement level is not allowed.

• Alterations and additions to an existing single storey or two storey dwelling house or addition of a second storey to an existing single dwelling house, on a lot that has an area of at least 450 square metres, and a frontage width of at least 12m, and is in Zone R1 – R5 or RU1 – RU5 (residential zones as well as some types of rural zones).

• The erection of new ancillary development such as swimming pools or cabanas (or alts and adds to existing ancillary development) on a lot that has an area of at least 450 square metres, and a frontage width of at least 12m, and is in Zone R1 – R5 or RU1 – RU5; and

• The demolition or removal of an existing single storey or two storey dwelling house or ancillary development on a lot that has an area of at least 450 square metres, and a frontage width of at least 12m, and is in Zone R1 – R5 or RU1 – RU5.

The SEPP then sets out specific detailed development standards for complying development under the SEPP. For example:

• at the completion of the development all lots can only have 1 dwelling

• building heights for dwelling houses are limited to 8.5m above existing ground level

• side setbacks depend on the height of the building and the lot size, but would typically be around 2m for a two-storey house on lots up to 900sqm, or more for larger lots.

• front setbacks are to be the same as the average of adjoining homes or, where there are no adjoining homes within 40m, front setbacks are typically to be 4.5m

• landscaped area (permeable area capable of growing plants and grasses) must be 20% for lots up to 600sqm or 25% for lots up to 900 sqm, and a minimum width of 2.5m

• site coverage of the dwelling house and all ancillary development under the complying provisions in the SEPP must not be more than 50% of the area of the lot if the lot has an area between 450 and 900 square metres, but less for larger allotments

• swimming pools must be located behind the setback area from a primary road or in the rear yard and decking/coping must not be more than 600mm above existing ground level (but can be up to 1.4m high if it is of limited width)

• stormwater/drainage can be via a charged system or an inter-allotment system. The ability to utilise a charged system should overcome the bureaucratic policies of many councils who refuse to allow charged systems and instead require owners to spend months or years attempting to obtain drainage easements over neighbouring properties

• the maximum allowable depth of excavation and height of fill are 1m. This will typically make the Code unavailable for sloping sites, and may need to be amended in future

• at least one off-street parking space is to be provided for new homes.

Complying development will not apply in certain specific areas, such as:

• land that comprises a heritage item or a draft heritage item

• land within a heritage conservation area or a draft heritage conservation area

• land that is bushfire prone or a flood control lot, and

• land that is identified as environmentally sensitive land.

Importantly, where a landowner cannot or does not wish to design their house or renovations in a way that is covered by the new Housing Code, the usual DA process is still available, but of course is subject to far more council discretion and neighbour involvement.

Gadens lawyers believe that developer contributions are likely to be payable for complying development under the Code, even though no DA will be required. This scenario is allowed for under s.94EC of the Environmental Planning and Assessment Act.

Summary

These significant reforms to the planning system in NSW should enable many residential-dwelling developments to avoid the need for council approval altogether, by either enabling small development to be carried out immediately (as exempt development) or by enabling a private certifier to issue a complying development certificate within only 10 days for larger projects. This should enable homeowners and housing developers to commence work quickly and cheaply and with a real level of certainty, avoiding expensive and protracted disputes with neighbours and councils. Although the reforms will undoubtedly be unpopular with some affected owners who will be deprived of the ability to object to development proposals, these reforms are considered necessary and sensible, and come at a time when there is urgent need for investment in the building and construction industry in NSW.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.