Urban Taskforce | Policy Agenda
Fact sheet: Getting Sydney back on track
26 February 2011
The Metropolitan Strategy sought to deliver 245,500 extra homes for Sydney between 2004 and 2013. According to the report Going Nowhere, the actual number of additional homes for Sydney is likely to be between 160,000 and 180,000 falling short of the 2005 targets by more than 27 per cent.
The 2005 Sydney Metropolitan Strategy has not delivered. The dearth of new homes in Sydney is having a profound social impact.
The failures in Sydneys strategic planning
The development of serviced residential lots promised to be an average of 6,000 to 7,000 a year simply has not eventuated. The Metropolitan Strategy itself warns that such an outcome would put great pressure in Sydneys existing suburbs and character and would potentially further reduce housing affordability.
While the 2005 Metropolitan Strategy was not perfect, it was a reasonable document. Most of the problems with urban planning in Sydney do not lie in the text of the Metropolitan Strategy, but in the failure of the Department of Planning and local councils to properly implement it. Given this, we are concerned that the bulk of the Metropolitan Strategy Review: Sydney Towards 2036 ("the discussion paper") is focused on re-writing the Metropolitan Strategy rather than identifying and responding to the failure in implementation.
Planning for a growing population
Going Nowhere examined the economic costs in some detail. While population growth in NSW was very weak from 2002 to 2006, it was solid in Victoria, averaging 1.3 per cent compared to just 0.7 per cent in NSW. From 2003 to 2009, Victorias economy substantially outperformed NSW with average annual economic growth at 3.3 per cent in Victoria, compared to 1.7 per cent in NSW. Average annual job growth was 2.1 per cent in Victoria, compared to 1.4 per cent in NSW. Of all the states, NSW economic growth per capita was slowest at just 0.8 per cent a year. Population growth tends to encourage per capita economic growth itself.
The social costs of Sydney's artificial constraints in the housing supply were highlighted by the COAG Reform Council in its recent report National Affordable Housing Agreement: Baseline performance report for 2008-09. The report found that, nationally, 37 per cent of low-income renter households were in rental stress”that is, were paying more than 30 per cent of their gross household income in rent. The proportion in NSW was significantly higher, with almost half of all low-income renter households”46 per cent”in rental stress.
According to the report, 28 per cent of homes sold were affordable to moderate-income households. Melbourne had the highest proportion of homes affordable to moderate-income households (39.1 per cent), however in Sydney just 26.4 per cent of homes sold were affordable to moderate-income households. The Going Nowhere report finds that, at the very least, we must get housing supply back to the performance levels of the 1990s to meet the new targets set out as part of the review of the Metropolitan Strategy.
This means we need a minimum annual average supply of about 25,000 extra homes. While this scenario which requires a doubling of the current rate of housing construction - will alleviate housing shortages somewhat, it is a second best outcome. Going Nowhere finds that NSW might recover the share of national overseas migration that has been taken by Queensland by boosting its annual construction of extra homes to 31,000 each year beyond 2015. This is two-and-a-half times the 2009 level of housing construction. The NSW Government targets fall short of this goal.
Integrating land use with transport
In infill locations, the Department of Planning has worked toward short-term targets hidden from the public and the development industry. The Metropolitan Strategy promised 460,000 extra homes within the existing footprint of Sydney by 2031, but the secret targets only allowed for rezoning for 103,000 extra homes in existing areas by 2013. These targets were obtained by the Urban Taskforce through freedom of information laws. If these secret targets had been met a third of the way into the strategy, we would have only 22 per cent of the promised new homes. The really hard rezoning decisions were secretly deferred into the never-never. The internal targets were set so low that there was never going to be enough housing available to keep up with demand. This mistake must not be repeated.
The development of new compact, pedestrian-friendly, mixed-use neighbourhoods in inner and middle ring suburbs should be permitted in any area that is within:
- 400 metres of a transport corridor serviced by high quality public transport (e.g. buses, light rail); or
- 800 metres of a jetty service by a commuter ferry service; or
- 800 metres of a train station.
For instance, every 10 percent increase in population density has been associated with a 6 per cent increase in passenger movements at transit stations. Furthermore, most urban services cannot be provided unless there are a certain number of people that can make them viable. Extensive research on this issue is available and the general consensus is that along with an increase in residential and employment density, mixed land uses around station areas have become accepted practice as a means of increasing usage rates. Its crucial that state environmental planning policies and local environment plans be amended to ensure that, in the vicinity of all public transport services all the land uses that are necessary for a viable, attractive and desirable community centre are permissible. The NSW planning system is inherently reluctant to zone for a mix of uses.
This is now out-of-keeping with international best practice. The original 2006 Standard Instrument sought to break-down the rigid rules that reinforced single-use zoning by restricting such zones, and instead favouring a series of multiple-use zones. This would have delivered more vibrant urban communities and reduced the pressure on Sydneys road system by reducing car travel and providing greater opportunities to locate services close to where people live, work and to where they already travel. We need to see a return to multiple-use zoning if we want to reduce the need for Sydneysiders to use their car.
More jobs in the Sydney Region
Jobs in Western Sydney
In relation to office premises BIS Shrapnel has predicted that, with only moderate amounts of new office supply coming on stream during the early part of next decade, some office tenants will look to business parks with high technology industrial space to satisfy their demand. If permitted, business parks are likely to play a prominent role in the future planning for employment lands. The flexible land use controls that come with business parks, the close proximity of the residential growth centres and new communications infrastructure such as fibre-optic cable can attract technology intensive businesses which require high office content accommodation. The 2005 Metropolitan Strategy only specified broad plans for an additional 3,200 hectares of new employment land, well short of the overall target of 4,000 to 7,500 hectares. The shortfall will need to be met through land releases that are additional to those flagged in the 2005 Metropolitan Strategy itself. In any event the government has only rezoned 2,323 hectares of land towards a Sydney-wide goal of 7,500 hectares of employment land.
Even though the Metropolitan Strategy promised 237,000 extra jobs in Western Sydney, only an extra 40,600 jobs have been created in Western Sydney in the four years since the strategy was produced. The best place for new industrial land is the outer Sydney region. While there is a substantial amount of developable land in the outer region, there is virtually no supply of lots in excess of 10 hectares in established locations around Blacktown, Wetherill Park and Smithfield. While the recent rezonings have ensured medium term supply, the apparently large size of the zoned reserves is misleading. The overwhelming majority of the rezoned land is not serviced and the yield is restricted by topography, environmental sensitivities and overhead electricity lines. Servicing may take as long as four years and state infrastructure charges have been increasing.
NSW Government articulated its agenda for new Sydney industrial lands in the outer region when it released Employment Lands for Sydney: Action Plan (the Action Plan) in March 2007. The document said the Department of Planning will consider the designation of a Western Sydney Employment Lands Investigation Area in the area between the Western Sydney Employment Hub and Badgerys Creek to the north of Elizabeth Drive. A map setting out (in broad terms) the boundaries of the investigation area was also published. In June 2008, in the State Budget the NSW Government announced that it had commenced a new initiative to support the rapid release of 11,000 hectares of employment land known as the Western Sydney Employment Lands Investigation Area that has the potential for $2 billion in employment land development. These plans have not been significantly progressed they should be.
Industrial sites in the inner suburbs
Restrictions on shopfront premises
The current Standard Instrument permits local council to allow only a narrow range of retail and business uses in so-called lower-order centres. The Land Use Table in the Standard Instrument should be amended so that retail premises and business premises are permitted uses in Zone B1 Neighbourhood Centre, Zone R4 High Density Residential and Zone RU5 Village. Many statutory plans do not permit retail premises and/or business premises (other than bulky goods premises, landscape and garden supplies, timber and building supplies) in business development and enterprise corridor zones. These environments function best when people working in these areas have somewhere to go to shop and socialise before work, at lunch time and after work.
Those working in a business development, business park or enterprise corridor zone should be entitled to have lunch in a restaurant, get a haircut or visit a local hotel after work.
A prohibition on retail premises really means that people need to drive further to satisfy their shopping needs. Planning rules should be encouraging behaviour that reduces vehicle kilometres travelled, not reinforcing old-style separations of land use that force people to drive further. The Land Use Table in the Standard Instrument should be amended so that retail premises and business premises are mandatory permitted uses in Zone B5 Business Development, Zone B6 Enterprise Corridor and Zone B7 Business Park. Retail premises and business premises should not be banned in any statutory plan in zones intended for use for employment purposes.
Many industrial zones recently published statutory plans to not permit retail premises or business premises in light industrial zones. Sometimes food and drink premises, landscape and garden supplies, service stations, timber and building supplies are permitted, and occasionally bulky good premises are allowed, but almost always retail premises generally are prohibited. This means large format grocery stores, such as Costco, are prohibited in light industrial areas. Large format business supplies retailers, such as Officeworks, or large format hardware suppliers, such as Bunnings, will often have great difficulty in finding sites. At the very least, bulky goods premises should be added as a permitted use in Zone IN1 General Industrial and Zone IN2 Light Industrial. Costco-style development should also be permitted by allowing retail premises as a permitted use, with an appropriate supporting zone objective.
The use of multi-use zones should be required, to avoid sterilising land in the event that the market does not seek to develop some or all of the land made available and maximise the opportunities for new retail development. Even if a given development is permissible under the land use table in a statutory plan, it can easily be refused if it is inconsistent with the zone objectives. The Standard Instrument creates areas where businesses are unable to be established if they would provide competition to businesses in established centres. The anti-competitive provisions of the NSW Governments Standard Instrument should be removed. Namely:
- in a Business Development Zone retail, office premises and other uses should be permitted, even if it would provide competition to businesses located in established centres; and
- in Enterprise Corridor ; Business Park; General Industrial; and Light Industrial zones retail and other uses should be permitted even if it would provide competition to businesses located in established centres.
In the Standard Instruments Zone B1 Neighbourhood Centre the zone objective is to provide a range of small-scale retail, business and community uses that serve the needs of people who live or work in the surrounding neighbourhood (emphasis added). A subjective phrase such as small-scale should never have appeared in a statutory plan. In the Standard Instruments Zone B1 Neighbourhood Centre the zone objective should be amended to omit the words small scale. Height and/or FSR controls are sufficient to control the bulk and scale of development; a subjective prohibition imposed through use of the words small-scale is inappropriate.
Environmental planning instruments are legal documents prohibiting and permitting activities. They can do nothing to encourage a particular class of development, except when it does so by disadvantaging other forms of development. This is well understood by consent authorities who frequently use the word encourage to signal that a particular form of development might be approved, while other forms of development are likely to find approval difficult. Environmental planning instruments should permit development and indicate the purpose of the zone in the zone objective. However, zone objectives should not be used as a means for favouring certain industries over others, unless it is clearly justified based on amenity issues or infrastructure requirements.
Proposals to introduce different floor space ratio and height requirements for land uses of a similar intensity in the same zone are usually inappropriate. It is difficult to comprehend why development types of a similarly high intensity should be given different floor space ratios in the same locality. The bulk and scale of a building is the same, whether its internal use is residential, commercial, retail or mixed-use. If a planning authority is concerned about the external building form, this can be dealt with by a development control plan, and does not need to regulate the internal use of a building. For example, a residential building can be built in the appearance of a commercial building (see the Regent Place development for example). Similarly, a supermarket can be in a mixed-use development underground, and have no external visual impact.
Density-bonus schemes generally involve local councils "low-balling" development controls for less favoured uses, to ensure that development is steered to the favoured use. The low-balled development control is typically, in substance (taking into market factors and the feasibility of development) a prohibition. If the development of the favoured use is not viable, the site will typically remain undeveloped. We dont have to go far to find examples of this approach. In a report by council officers on the future North Sydney local environmental plan, they said the introduction of a council floor space bonus scheme " may require artificially scaling back controls for the North Sydney Centre to provide the 'space' for bonuses." Environmental planning instruments should not accord different land uses of a similar intensity with different floor space or height entitlements within the same zone.
Growing Sydneys value
Centres and corridors
While you wouldnt know it from reading the Sydney Towards 2036 discussion paper, the Metropolitan Strategy envisaged concentrated commercial, retail and residential development across the centres and corridors of Sydney. It was the clear intent of the Metropolitan Strategy that retail and commercial activity be capable of being located in broad renewal corridors. There are good reasons why the Metropolitan Strategy envisaged commercial and retail activity being spread across centres, enterprise corridors, economic corridors, renewal corridors and in certain cases industrial areas. By ignoring the potential of corridors with excellent transport infrastructure to support commercial and retail development, the Department of Planning is depriving the economy of the benefits of the efficient use of this infrastructure.
Additionally, there is simply not enough land, and there will never be enough land, to provide for Sydneys needs if a centres-only approach is taken. If the NSW Government walks away from the idea of supporting retail and commercial development across centres and corridors it will be handing massive and disproportionate economic power to landowners located in the few centres that are cleared for such development. Strangely, as the NSW Government moves towards abandoning its commitment to renewal and enterprise corridors Melbourne is simultaneously moving in the opposite direction. The Centres and Corridors approach of the Metropolitan Strategy should be retained and actually implemented.
Getting Western Sydney its fair share of jobs
Sydneys role as a Global City
The Urban Taskforce/BIS Shrapnel report Going Nowhere sets out a twelve point plan for reform to:
- introduce new statutory objectives for the planning system, based around the principles of:
- supporting the states economy;
- promoting ecologically sustainable development;
- promoting liveable communities;
- managing impacts on public infrastructure; and
- promoting private investment by respecting property rights;
- impose new rules to limit bureaucratic and political games by ensuring that development meeting pre-determined standards is entitled to approval;
- force consent authorities to deal with matters promptly, within a deemed-to-comply timetable;
- reduce uncertainty by clearly defining the matters that can be considered in the development assessment process;
- ensure that a private property owner is properly compensated for removal of land use rights by the government;
- reduce and reform the highest local council development levies in Australia;
- redesign state infrastructure contribution levies so that economic distortions are reduced and there is greater transparency;
- emulate Victoria by introducing stamp duty concessions for off-the-plan home purchases;
- reform the template being used in the preparation of new local environmental plans - so it genuinely promotes good urban outcomes and reduces over-regulation;
- progress the rezoning of land for development as promised in numerous strategies and give proponents Queensland-style appeal rights when rezoning proposals are unreasonably refused or delayed;
- improve the handling of state and regionally significant projects by improving the expertise of those assessing the applications; and
- remove the ability of bureaucrats and politicians to second guess the market and/or take into account the loss of trade, that might be suffered by existing businesses, as a result of new development.
We also urge the government to closely study the related report Deny Everything which sets out the necessary reforms to the planning system in detail.
Strengthening a City of Cities
The centres typology
Alternatively, you may want a typology to describe the future development potential of a location. This would be based on the quality of local infrastructure (relative to other areas that are candidates for higher density zoning), with regard to possible infrastructure improvements in the future. However, it appears that neither of these approaches has been clearly adopted by the strategy. With respect, we submit that the Department must admit that any classification of centres in a strategy that relates to the future use of centres will be used to guide, both infrastructure planning and zoning for that locality. Otherwise the whole existence of the typology is pointless. The purpose of the typology of centres needs to be clearly spelt out.
The Urban Taskforce has consistently criticised the decision to create a sub-species of strategic centres as specialised centres. For example, St Leonards is a specialised centre because it has the Royal North Shore Hospital. Do developers need the Department of Planning to tell them that health related developments might be a good idea in St Leonards given that the hospital is there? Of course not! Were government officials aware of the presence of the hospital prior to the designation of St Leonards as a specialised centre? We trust they were. Will development that is not health related be discouraged in St Leonards? We hope not, but no-one can be sure, because that would appear to be the only purpose in designating specialised centres.
The specialised centre category should be abolished, and existing specialised centres should be designated as either major centres or regional cities. We have consistently argued for a simpler local centres hierarchy. The existing elaborate hierarchy has been used by planning authorities as an excuse to artificially limit the range of uses and scale of development in so-called ˜lower-order centres. The town centre, the neighbourhood centre and villages should be one and the same category of centre, perhaps titled simply local centre.
Investment and jobs in new and existing centres
As-of-right development for centre and corridor development
- any development proposal that meets the height controls and floorspace ratios set out in a local environmental plan should not be capable of being refused or conditioned on the grounds of height, density or scale; and
- any development proposal that meets any development standards set out in, or under, the State Environmental Planning Policy No 65”Design Quality of Residential Flat Development should not be capable of being refused or conditioned in relation to the issues intended to be addressed by those development standards.
These provisions can be modelled on Part 7 of the State Environmental Planning Policy (Housing for Seniors or People with a Disability) 2004, but should also invoke section 79C(2) of the Act.
Reforming development control plans
This was common practice, in part, because it recognised that development control plans were not particularly robust documents. They had often been prepared without the involvement of developers and therefore often ignored the needs and requirements of the end-users of developed property assets. Consent authorities traditionally felt comfortable in approving development contrary to the provisions of a development control plan when they felt a good case could be made out. However, court decisions now require that a development control plan should be the fundamental element" in, or a "focal point" of decision-making. In fact, as the law stands, if development standards in a DCP are not inconsistent with a local environmental plan, they can effectively prohibit a development - even when the local environmental plan allows an application to be made for the development.
Its worth contrasting the differing approaches between NSW and Queensland. In Queensland, the presence of a code creates a legally enforceable right for a development applicant to insist on the approval of their proposal, provided it satisfies the code (and the applicant is still entitled to a merit assessment in the event that the code is not complied with). In NSW, it is unlikely that any proposal inconsistent with a DCP will get serious consideration, while there is no legal certainty that even proposals that are consistent with a plan will be approved.
- Firslty, the scope of development control plans should be limited to standards that are a necessary response to a limited range of matters.
- Secondly, development control plans should not be proscriptive.
- Thirdly, development control plans should only be one factor for consideration in development assessment and that it should be given no special weight above other factors of consideration.
- Finally, a development applicant should be entitled to argue, that the requirements of a development control plan will adversely impact on the feasibility of a development envisaged by the local environmental plan. If established, the consent authority should be obliged to modify or set aside the requirements of the development control plan. We note that other jurisdictions allow such arguments to be made.
We also note there is a special need to create a state environmental planning policy to reduce the discretion of local councils to effectively block development envisaged by local environmental plans by arbitrarily reducing car parking entitlements. Such a policy should set minimum car parking entitlements for different categories of permitted uses and only permit councils to impose lower car parking entitlements when it is justified by an objective expert traffic study. Of course, such a policy should not preclude an applicant for putting forward a proposal with little or no car parking, where the applicant can demonstrate that such parking is not required (e.g. where public transport is plentiful and the development is unlikely to require or generate traffic).
Meeting changing housing needs
As the demand for higher density housing is largely confined to the inner and middle ring suburbs, it is likely that higher density housing will need to take the form of apartment development and much of this apartment development ultimately needs to be six storeys or more. Of course, the development of apartments will not address the needs of all home buyers and (as the most recent Department of Planning Metropolitan Development Program report observes) there continues to be a very strong unmet demand for detached housing in the new suburbs on the edge of Sydney. Significant emphasis must also be given to supporting the development of greenfield detached housing. A good description of the areas that require apartment development comes from a recently finalised government state environmental planning policy: the State Environmental Planning Policy (Affordable Rental Housing) 2009. In this document the following areas are identified for higher density:
- 800 metres walking distance of a public entrance to a railway station or a wharf from which a Sydney Ferries ferry service operates; or
- 400 metres walking distance of a public entrance to a light rail station or in the case of a light rail station with no entrance, 400 metres walking distance of a platform of the light rail station;
- 400 metres walking distance of a bus stop used by a regular bus service that has at least one bus per hour servicing the bus stop between 06.00 and 18.00 each day from Monday to Friday (both days inclusive).
Balancing land uses on the city fringe
Location of greenfield development
The areas selected for land release, such as Edmondson Park, have not been possible to commercially (i.e. profitably) develop. In the case of Edmondson Park the big cost item is the expensive process of unifying a large number of fragmented five acre sites into a single development site. Other nearby (but slightly further out) precincts, which do not have that cost burden, have not been released, because that would not have been orderly. Should land owners, within or outside the growth centres, present proposals to government for land release/rezoning we would favour assessment of the proposal on its merits. It should not matter whether the land is formally inside or outside the growth centre boundaries.
Food production in the Sydney Basin
Most vegetables produced in NSW come from the Murray and the Murrumbidgee regions, not Sydney. If Sydney farmers are denied the opportunity to sell their land for urban re-development, they may not be able to exit from an unviable business. They may lose the chance to have a dignified retirement. New town planning controls cannot turn an unviable business into a viable one. We do not support new land use controls which will have "a greater focus on the protection of agriculture" in a revised Metropolitan Strategy. We also do not support designating areas for agriculture within the Sydney Basin.
Protection of land on the city fringe
The process of greenfield land release
Where will renewal happen and what will it look and feel like?
Any location which is able to broadly satisfy the suitability criteria (with the exception of the last point) on pages 11-12 of the Draft Centres Policy released in April 2009, should be accepted as a new centre or renewal or economic corridor if a proponent emerges, who is willing to fund the necessary works.
The criteria to be considered would be:
- access to public transport, or the infrastructure capacity to support future public transport;
- good pedestrian access;
- good road access for employees, customers and suppliers and, where necessary, capacity to provide new road infrastructure;
- close proximity to local labour markets with the skills required by business;
- urban design opportunities that create the potential to integrate with surrounding land uses;
- potential to increase the amenity of the local area;
- capacity to contribute to environmental outcomes; and/or
- environmental constraints, such as flooding.
It is not possible to comprehensively identify all possible centres in any strategic planning exercise and nor should the Metropolitan Strategy or any subregional strategy attempt to do so.
- net additions to the housing stock (i.e. excluding new homes that merely replaced demolished stock);
- net additional shopfront floor space;
- net additional commercial office floor space;
- net additional to entertainment facilities floor space;
- net additional industrial and light industrial floor space.
For more information (and source details) please read our fact sheet: