Fact sheet: Supporting Major Projects

26 February 2011

The problems with the existing system of town planning laws are immense and wide-ranging.


The value of expertise
It is a well understood principle that you get good at undertaking difficult tasks by doing a lot of them. Assessing large development applications is a complex activity. Regretfully, most councils will never receive enough of such development applications to become truly proficient at them.


Most local council areas would be lucky to see one application for a new shopping centre in a five year period. A development application for a 300 home $105 million apartment development might only come once a year or less. A $150 million greenfield development of 600 houses will be infrequent and, in high growth areas, several might happen over the space of a couple of years.


If assessments of large applications are consistently left to local councils, they will be rarely done well, because the staff of councils are geared to respond to the small, more frequent applications. Thats why a special group of assessors reporting to a state-level planning authority can add considerable expertise to the development assessment process for large projects.

Why good projects are so often blocked
The problems with the planning system are often reported in terms of the length of time it takes to get planning approvals. This is a problem, but its only part of the problem.


It overlooks the projects that never make it to the application stage, because the development is prohibited for no good reason (or a political reason). These prohibitions are enforced through zoning decisions, which are still largely the domain of councils.


A related issue are the projects that are ostensibly permitted, but made unviable by arbitrary council rules (development standards) and levies. Development standards are commonly set through zoning plans or council policy documents. In many instances, the bar is deliberately set too high by councils representing not-in-my-backyard (NIMBY) resident activists.


The underlying philosophy of the current planning system is collective social control, through local government, over urban development patterns.


If there was a single local council for each metropolitan region, this philosophy might be workable, but no major urban area in Australia has that luxury. The governance of Australia’s top five cities, accounting for 57 per cent of our population, are dominated by a plethora of small borough councils. Each represents only a fraction of the relevant metropolitan area. Sydney has 43 separate councils, Melbourne 31, Perth 30 and Adelaide 19. Brisbane is in the best position with just five councils covering its metropolitan area.


The costs of a large development proposal are usually borne within a small local government area (e.g. traffic impacts, changed views, alerted skylines, need for infrastructure investment by council, etc).


However, the benefits are normally diffused across the metropolitan region (e.g. a better supply of affordable housing, increased ability to walk to and use public transport, less cars on the road overall, etc). In political terms, this creates strong incentives for small local councils to block development, because their electoral constituencies bear the costs, while the benefits are largely enjoyed by voters outside a council area. Most local councils are trying to ensure that some other council area bears the costs of urban renewal, while they free-ride on the benefits.


Consider, for example, the City of Sydney. For every two local residents, five people work in the City of Sydney. A lot more visit it every day. The City of Sydney belongs to many more people than just its existing residents. Inevitably local politicians take a parochial view that suits the interests of those fortunate enough to already live close to Sydneys CBD, in an area rich with public transport.


Every time they successfully oppose a new home, a household is forced to locate farther away from their workplace. That means more congestion on Sydneys roads and less people using public transport. Blocking new homes in the City of Sydney may win votes at council elections, but it is not in the interests of the broader Sydney metropolis.


For the old-style development patterns, where cities only expand outward, the traditional local council controlled planning system was not a major barrier to development. Thats because, once an area was urbanised, the job of a local council was just to manage minor alterations, additions, occasional refurbishments, and the replacement of derelict buildings.


These days, governments are planning for most future housing to be built within the existing urban footprint in South East Queensland its 50 per cent, in Melbourne its 53 per cent, in Sydney its 70 per cent. To some extent this reflects the increased consumer demand for well-located, more compact housing, within walking distance of public transports, shops and services.


That means cities are supposed to be growing up, as well as out.


We will never overcome the NIMBY view that inevitably emerges at a local level unless decision-making on both zoning and development assessment is able to be elevated to a higher level.
Traditionally it was courts and tribunals that helped inject commonsense to overtly political council decision-making (e.g. the Land and Environment Court in NSW). However, these bodies can play a role in development assessment decisions, but their decisions are generally based on existing zoning and development standards.


Where zoning and development standards flow from political action by NIMBY resident groups, the courts have lacked a mandate to intervene and overturn councils. This has left state government to try and sort out the mess.


For example, rules prohibiting apartment development, or only allowing low-rise apartment development, within walking distance of high quality public transport services are, generally speaking, not tenable in Sydney. Ultimately such rules will need to be set aside, as the social costs of not doing so become increasingly apparent.


Similarly, formal and informal urban growth boundaries designed to prevent the outward expansion of key cities such as Sydney or Newcastle generally come under extreme pressure (as we have seen in Melbourne). This is because many members of the community are not truly prepared to give up on the idea of owning a detached house with its own backyard. Urban growth boundaries eventually place intolerable price pressure on that form of housing.


State governments have attempted to overcome politically inspired prohibitions, by assuming greater responsibility for both development assessment and rezoning decisions.


Whether its ˜Part 3A in NSW, ˜priority development projects in Victoria or the work of the Urban Land Development Authority in Queensland, there is clearly a need for state government leadership in the planning process.


However, there has been some resistance to this idea, and many are now seeking less ministerial intervention.


If these policies are carried through, current subdued levels of development activity will slow down dramatically, unless either:

¢ a state government creates a single local government authority for entire metropolitan areas; or
¢ strong independent planning commissions are established to ensure land is rezoned, and only appropriate development standards and affordable levies are imposed, to achieve state government housing, employment and retail development objectives.


Western Australia is often cited as an example of the planning commission model, but the great bulk of Perths expansion has still been outward (greenfield) development.


In truth, there is no model, within Australia, for an independent planning commission, with a mandate to ensure that zoning plans and development rules permit the majority of a citys development within the existing urban footprint. The first state to rely on such a model will be on unchartered territory.


Will such a planning commission stand firm, when it comes under sustained political attack by NIMBY activists in a local community?


State governments need to think very carefully before they abandon their policy responsibilities entirely, because voters will end up holding them responsible if rents are skyrocketing, shopping precincts are congested and well-located jobs are unavailable, due to the poor decisions by independent commissions.


Local councils and certainty

It has been suggested that if the regular planning system had greater ˜certainty we wouldnt need a special stream for state and regionally significant development.


Certainty in a planning system can be a positive or a negative force.


Certainty will be positive for urban communities, if development applicants know they will receive an approval if they can meet clearly defined and reasonable hurdles.


Certainty will have a negative impact on a city if despite strong need for additional housing, workplaces or retail precincts – a potential applicant has certain knowledge that their proposal will be blocked.


More information


For more information (and source details) please read our fact sheet:



Fact Sheet: Supporting Major Projects