Major Reforms To NSW Planning Laws Commence Today, 1 July 2009!

After nearly two years of political wrangling and grandstanding, and amid ambitious talk of creating "the best planning system in Australia", 1 July 2009 sees the commencement of arguably the most significant round of NSW planning system reforms in decades.

The key reform areas that commence today are:

• Joint Regional Planning Panels (JRPPs) will now replace councils in determining moderately significant development applications (DAs) in NSW
• Changes to the Major Projects State Planning Policy (SEPP)
• Changes to rezoning processes, which will potentially enable rezoning to proceed quickly, whether or not a local council supports the proposed rezoning.

The following is a broad overview of the key planning reforms that commence today.

Joint Regional Planning panels

JRPPs are being established to determine and advise upon certain DAs lodged on or after 1 July. They are panels consisting of five members. Only 2 members will be representatives of the relevant local council, and 3 members will be selected by the State Government (including the Chair, who has the casting vote) through an Expression of Interest process that is now nearly complete.

There will be six panels covering most "regions" of NSW, but in a disappointing turn of events, the Government has excluded the entire City of Sydney Local Government Area from the JRPP process.

Government publications tell us that JRPPs have been set up to deal with "regionally significant development". This may have been the intention in November 2007 when the process began, as JRPPs were expected to deal with DAs where the cost of the development would be more than $50 Million. However the actual threshold released in the amended Major Projects State Policy (SEPP) this week is now far lower, with the JRPPs to make decisions on the following categories of development:

• Developments costing more than $10 million which are not 'Major Projects' under part 3A of the Environmental Planning and Assessment Act (Act)
• Developments costing more than $5 million that are for public and private infrastructure, such as child care centres, churches, places of worship, community facilities, educational facilities, health services facilities, and the like
• Subdivisions over 250 lots
• Certain coastal development and specified 'designated development', which can be explained further upon request
• Section 96 modification applications to the types of developments listed above.

It can be seen therefore that many developments (for example, moderate residential flat developments) will fall within the "regionally significant" category, and will be determined by JRPPs.

The DA process will see these "regional" DAs still lodged with local councils in the ordinary way, and initially "assessed" by council staff. This simply means that council staff will provide a report and recommendation to the JRPP. However in an interesting recent twist, the regulations released this week enable the JRPPs to obtain their own independent assessment reports or advice as they see fit (to be paid for by councils), in addition to any assessment report prepared by a council. This should see these DAs further depoliticised. The decision whether to approve a DA would then be made by the JRPP after having considered all such information, this would generally be at an open meeting where relevant stakeholders may make submissions to the JRPP.

The Department of Planning has released detailed draft operational guidelines for the JRPPs, which we can advise further upon, on request.

Changes to the Major Projects SEPP

Many large scale developers would be aware that the major Projects SEPP lists the types of development that are to be determined by the Minister for Planning, rather than councils, and that it includes a discretionary category for "residential, commercial or retail projects" costing more than $50 million that the Minister determines "are important in achieving State or regional planning objectives".

This meant that developers of large developments costing $50 Million or more could make a case as to why their DA was sufficiently important that it should be determined by the Minister, rather than the local Council.

However clause 13 of the major Projects SEPP has now been amended, effective 1 July 2009, to raise the threshold to $100 Million.

Developments between $50 Million and $100 Million will now generally be automatically determined by the JRPPs rather than the Minister, unless the Minister decides otherwise and amends the major Projects SEPP to "call in" the development.

Changes to rezoning processes (plan making)

In previous updates, Gadens Lawyers have reported on the new "gateway" system that would be introduced to enable rezoning applications and other broader amendments to council planning instruments (local environmental plans) to be assessed quickly by the State Government, and to receive a preliminary "gateway" approval or refusal within 3 to 4 months. However details on the "gateway" system have been scarce.

This system has commenced today, 1 July 2009.

The fast-tracking of rezoning applications seems to be good news indeed for landowners and developers, particularly when it is considered that:

1. The Planning Minister recently announced that spot rezonings (applying to single sites or single development areas) would be encouraged (add link to our recent update on spot rezonings)
2. Councils under the previous system generally had an ability to veto a rezoning proposal entirely, with no right of appeal to the proponent
3. Where rezoning applications proceeded, the average time to process them was often extraordinarily long – usually a number of years.

The key issue that appears to now arise is whether councils will still be able to prevent a rezoning proposal from even proceeding to a gateway assessment. What is the Council's role, and where the Council is against the proposal, is that the end of the proposal?

While advice should always be sought on a case by case basis, the general answer is that although the "planning proposal" (rezoning application) would generally need the initial support of the local council in order to proceed further, the new legislation and regulations do make provision for proposal to be dealt with by a "relevant planning authority" other than the Council, albeit in limited circumstances. New section 54 of the Act states that the Minister may appoint the Director General or any other prescribed person or body – which includes the new JRPPs – to process the rezoning proposals in certain circumstances, such as where:

• The proposal is of state or regional planning significance, in the Minister's opinion
• The JRPP has recommended that the rezoning should proceed (the Minister may seek the JRPP's advice on planning matters, as discussed above); or, interestingly
• A council has, in the Minister's opinion, failed to carry out its obligations (in assessing the proposal) "in a satisfactory manner".

It can be seen that the Minister has a great deal of discretion as to whether to allow a council to handle and decide upon the rezoning proposal, and even where a council does so, there is effectively a right of review for the proponent to the Minister where the council has failed to handle the matter satisfactorily.

The real question now is what appetite the Minister has for allowing rezoning applications to proceed against the wishes of the relevant local council. The Minister is likely to be tested on this very soon.

In terms of the process that now applies, once a proponent has prepared a proposal and provided it to the "relevant planning authority" (whether it be the council or another body), a decision is then made on whether the proposal shall be forwarded to the Minister to progress. This is the "gateway" decision, and is made promptly and before any community consultation takes place. The proposal is then assessed by the Department of Planning and a decision is made by the Minister or her delegate. The Minister's Department has been at pains recently to explain that a "gateway" decision is not binding and does not amount to an in-principle approval. How could it when no public consultation has yet occurred? The Minister is obligated legally to consider public comments. However we suggest that where a proposal has already been given a "gateway" approval by the Minister, it would be reasonable to expect that the Minister would ordinarily proceed to give a final approval rather than subsequently reject the very same proposal.

Applicants should carefully consider how they craft their "planning proposal", to increase the prospects of having the proposal proceed from the initial "relevant planning authority" through to the Minister for gateway assessment. Draft guidelines have recently been released, and further advice ought to be obtained on a case by case basis.

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