Government rules for council amalgamations stop planning proposals for a year

The NSW Government has issued guidelines to councils subject to merger proposals that effectively prevent progressing of most rezoning proposals that involve voluntary planning agreements, says the Urban Taskforce.

“On the 18th December the Office of Local Government issued guidelines to councils that are the subject of merger proposals that prohibit councils receiving an amount greater than $250,000,” says Urban Taskforce CEO, Chris Johnson. “A number of councils are now putting on hold proposed rezoning’s that involve Voluntary Planning Agreements that result in the council receiving an amount greater than $250,000. The effect of this guideline is that many development projects across Sydney will be stopped for over a year until the amalgamation process is completed. This will also result in the delay of thousands of housing approvals, during a time when property prices are sky high and the market desperately needs additional supply. The real losers in this situation will be home buyers.’

“The very day the Office of Local Government issued the restrictions on receiving funds the Department of Planning closed down for two weeks leaving the property industry with a confused understanding of government’s intent.”

“The Urban Taskforce has seen letters from Sydney Councils that say ‘Council would not be able to enter into the VPA’ as a result of circular issued by the NSW Government.”

“The reason many development proposals in NSW are negotiating Voluntary Planning Agreements is that the state government is driving new strategic plans that support growth particularly near railway stations. As local council LEPs have not yet incorporated the government’s vision the only recourse applicants have is to submit a planning proposal which often includes a VPA. The state government having encouraged the property industry to make proposals in line with their vision has now cancelled the mechanism that enables a project to proceed.”

“The Urban Taskforce is very concerned that the state government’s amalgamation agenda could put a hold on development for over a year just at the point where the current confidence is slowing down. The effect of restricting the planning processes in councils will be to slow down the production of new housing just when it needs to be supported.”

“The NSW Government must urgently ensure that housing supply is not restricted as a result of council amalgamations. This guideline must be revised, in consultation with the property industry, urgently.’’

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Letter from DoPE
Letter from OLG