04 November 2016
The announcement by NSW Planning Minister, Rob Stokes, that the government is concerned about the development industry ‘being held to ransom’ by some councils over Voluntary Planning Agreements and has now issued a Practice Note on this is excellent news.”
“The Urban Taskforce has raised for some time the increasing practice of Sydney council’s to use ‘Voluntary’ Planning Agreements (VPAs) to raise funds for infrastructure by trading in floor space,” says Urban Taskforce CEO, Chris Johnson. “Our belief is that councils were operating outside of the Department of Planning’s guidelines and that the planning rules were being waived in favour of generating income.”
“As the minister has identified that VPAs have often been used to hold the development industry to ‘ransom’ there should be a review of recent and pending VPAs to ensure that they are fair to the industry. The Urban Taskforce raised the problem a year ago so there could be many VPAs that need to be assessed for fairness. It is certainly good to see that the minister has now responded to industry concerns and developed a new fairer and rigorous approach.”
The Draft Practice Note states that planning authorities participating in planning agreements should follow these principles:
• Planning agreements must be governed by the fundamental principle that planning decisions may not be bought or sold
• Planning authorities should not allow planning agreements to improperly fetter the exercise of statutory functions;
• Planning authorities should not use planning agreements as a means of revenue raising, to overcome spending limitations, or for other improper purposes;
• Planning authorities must ensure public benefits relate to the particular development.
“The Department’s Draft Practice Note also acknowledges the misuse of planning agreements, including planning authorities (such as a council) taking advantage of an imbalance of bargaining power between the council and the developer in order to extract unreasonable public benefits under a planning agreements. This has been widespread throughout the Sydney metropolitan area, with many councils demanding huge upfront payments of millions of dollars, with no statutory requirement that this money is spent on local infrastructure or services.”
“The Urban Taskforce supports the principle of Voluntary Planning Agreements for specific sites where there is a clear win -win to the developer and the community. We also support the use in precincts that require urban renewal of a Special Infrastructure Contribution (SIC) as long as this is known well before the developer purchases the land for development, and the cost of the SIC is reasonable.”
