Australia: New faster rezoning process to be introduced in NSW? Proposed changes to local planning laws

In the first significant reform of the planning system since the repeal of Part 3A last year, the NSW Planning and Infrastructure Minister, Brad Hazzard, has released proposals to tackle flaws in the rezoning process.

Mr Hazzard has declared that the many steps in making and changing new local environmental plans (LEPs) are currently "slow, wrapped in red tape and there's no guarantee for proponents to get a fair hearing".

Demands by local government for more autonomy from the Department of Planning and Infrastructure are to be met with less Departmental involvement in the final stages of preparing amendments to LEPs.

On the other side of the fence, demands by property developers and property owners for a right to appeal when councils block spot rezonings are to be addressed with a new "review" process, under the watchful eye of the Department and its Minister.

More autonomy for Councils

At present, each change to an LEP requires involvement by the Department at two distinct points.

Firstly, quite early in the process, the Department is asked to make a 'gateway determination' in response to a proposed rezoning (called a 'planning proposal') submitted by a council. (This is usually because a developer or landowner has convinced the Council to support the rezoning.)

Secondly, once a proposal has been subject to community consultation, the Department liaises with the Parliamentary Counsel (lawyers employed by the Department of Premier and Cabinet) on the legal drafting of the LEP changes, and either the Department, or the Minister, makes a final decision as to whether the rezoning will proceed.

The government is now proposing to radically cut the Department's involvement after the gateway determination for the great majority of LEP changes.

In particular, it will mean that spot rezonings that are either:

• consistent with an endorsed strategy; or
• consistent with surrounding zones; or
• in accordance with broader government policy; or
• cover matters that will not have any significant impact on the environment or adjoining land,

will normally be exhibited and finalised by the council alone, once the gateway determination is made by the Department.

This will be welcomed by developers and property owners whose spot rezonings have had council support, but nonetheless have become bogged down in bureaucratic inertia.

However, key choke points in the system will remain. In particular, a planning proposal will still need to be prepared by a council, the Department will still need to issue a gateway determination and Parliamentary Counsel will still draft all LEP changes.

The main risk is the potential for LEP changes that reduce the development capacity of land. This can occur through:

• changes to the list of permitted land uses in a zone;
• changes to site specific development controls;
• the imposition of new development standards;
• the imposition of new zones objectives; and
• changes to maps of riparian corridors, flood prone land, acid sulphate soils, foreshore areas, ANEF contours, etc.

Under the proposed new rules, any and all of these changes could easily be approved by the Department in a gateway determination and delegated down to a council for community consultation and finalisation.

If a council is the initiator of the planning proposal, it is unlikely that it will fully disclose a reduction in development potential to the Department when it seeks a gateway determination (noting that the gateway determination is made before community consultation).

If developers or property owners only then find out about the change when the proposals are publicly exhibited, they may object, but council will have the power to finalise (what might effectively be) a downzoning without the need for any further Departmental approval.

Hopefully this is just an oversight, and the government will amend its proposals to address this issue before the proposed new process is introduced.

Reviews

Gadens frequently works with developers and property owners whose requests for spot rezoning of land are ignored, arbitrarily rejected or delayed without any good reason.

Some other jurisdictions deal with this by allowing development applications to be lodged and assessed on their merits (and where necessary appealed), even when a particular land use is not envisaged in a planning scheme. There have been many calls for such a system in NSW.

It is important to understand that the proposed review process is not such a system.

The proposed system is to be introduced without any changes to legislation or over-arching environmental planning instruments. It is to be based entirely on an administrative protocol adopted by the Minister. It will not be law.

Two new kinds of review are proposed. A 'pre-gateway review' and a 'gateway review'.

A 'pre-gateway review' is the one that will attract the most interest from developers and property owners.

If a proponent has requested that a council prepare a planning proposal (ie. a document proposing a rezoning), and either:

• the council decides not to prepare a planning proposal; or
• the council has not made a decision after 60 days of receiving the request,

the proponent may, within 40 days, 'ask' for a review by a joint regional planning panel.

However, the request will be given through the Department of Planning and Infrastructure. The Department will screen all requests, and only provide them to a joint regional planning panel if the proposed rezoning meets each of the following criteria:

• The development will either utilise existing capacity in infrastructure networks (subject to the agreement of service providers) or the necessary 'essential infrastructure' can be provided 'out of sequence' subject to 'cost recovery' and the agreement of essential service providers.
• The development will be adequately 'integrated' with existing public transport networks in a 'timely manner' to ensure that there is not an 'undue reliance' on private vehicle trips.
• The development is 'likely' to be supported by agreement from key environmental agencies, that 'appropriate' environmental management outcomes can be achieved.
• The development will not 'detrimentally impact' on the viability of identified centres in endorsed regional and/or sub-regional strategies.
• The development is consistent with, or supports the outcomes and actions of, one or more of the following:
  • an endorsed local strategy;
  • the relevant regional strategy;
  • other relevant regional or state strategic plans or polices.

These criteria are highly subjective and discretionary. It will be difficult to anticipate in advance how value-laden requirements such as 'appropriate', 'timely manner', 'undue reliance' and 'detrimentally impact' will be applied, or how 'likely' it is that environmental agencies will support the proposal. On the other hand, proponents will be pleased that there is a smorgasbord of policy documents that they can demonstrate compliance with and (at least in theory) only one of those has to be satisfied.

Nonetheless, the criteria makes it difficult to pursue most greenfield development or out-of-centre retail development through this process. The criteria favours infill development, particularly if the LEP change required is a simple adjustment of mapped boundaries, land use controls or permitted land uses.

There is no right of appeal against a Departmental decision to screen a proposed rezoning out of the review process, based on non-compliance with the above criteria (although limited judicial review in the Land and Environment Court might be available in certain circumstances).

If the rezoning proposal survives the Department's screening process, it will be referred to a joint regional planning panel (in the City of Sydney this will be the Planning Assessment Commission). The Department will supply a report and additional submissions will be provided by the council and proponent. The panel, including its two council representatives, will provide 'independent' advice to the Minister.

If the advice is negative, the proposal will go no further. If it is positive, the Minister will then either accept the advice or reject it. If the Minister accepts the advice he or she may appoint the Department (instead of council) to progress the rezoning.

There is also a mechanism for a gateway review which allows a council or a proponent to seek a review when the Department makes a gateway determination that either:

• a planning proposal should not proceed or should be resubmitted; or
• a planning proposal should be supported, but with changes that are unacceptable.

These requests for review will go to the Department. The Department will prepare a report for the Minister or Director-General, who may then ask the Planning Assessment Commission for advice. The Minister or Director-General is only obliged to seek the advice of the Commission if they wish to leave open the option of altering the gateway determination. While it is not expressly stated, it is clear that the Minister and Director-General have the discretion to decide that there will be no review by the Planning Assessment Commission and the gateway determination will stand unchanged.

Once the Commission has formulated its advice, the matter will be returned to the Director-General or the Minister for a final decision.

This proposed 'review' regime will bear little relationship to the current system of development application appeals in the Land and Environment Court. Many will see this as positive. However, the downside is the system remains under very tight political and bureaucratic control. It is highly likely that, at times, proponents will be subjected to adverse decisions without an opportunity to even present to decision-makers.

Nonetheless, most will probably accept that the new protocol is superior to the status-quo.

One final issue to watch is the definition of 'proponent'. Unlike development applications, there is no requirement for landowner's consent. If this is not addressed, we can expect that objectors will pursue proposals to downzone other people's land under these rules. We trust that this is an oversight that will be picked up by the Department before the new system is introduced.

The proposed new rezoning processes are presently on exhibition and public submissions have been invited until 4 May 2012. The details are available here.

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This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.