How the planning system can help boost a COVID-19 economic recovery in NSW – Real Estate and Construction

How the planning system can help boost a COVID-19 economic recovery in NSW - Real Estate and Construction


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Australia is facing a severe economic downturn. Managing
the economic impacts of the COVID-19 pandemic will require, amongst
other initiatives, cooperation between government and industry. In
this respect, there are various ways that the NSW planning system
could be used to support the economy during and
post-COVID-19.

What has already been done?

The NSW government has taken a number of initial steps to bring
flexibility into the planning system in its COVID-19 response,
including the introduction of measures to ensure retail premises,
home-based industries and businesses can
operate 24 hours a day
, and to allow
supermarkets and other retail outlets in NSW to receive deliveries
24 hours a day
.

Four additional orders have been made as at 3 April 2020,
permitting:

the extended operation of existing retail and home businesses
outside the hours of their development consents;

various changes of use and temporary construction for the
purpose of health service facilities;

the use of existing structures or the construction of temporary
structures for the purpose of temporary workers’ accommodation
at two key power stations;

wider use of food trucks and commercial kitchens for the
purpose of preparing and serving takeaway meals.

These are important initial responses, but further steps can be
taken to support and buffer the economy. In this respect, Minister
Stokes has indicated just this morning that a Planning System
Acceleration Program (Program) has been
established by the NSW Government.

While the precise details of the Program are yet to be revealed,
the Minister has announced that in an effort to sustain the economy
throughout the COVID-19 crisis and to drive economic growth once it
is over, the Program has been designed to:

create opportunities for more than 30,000 construction jobs in
the next six months;

fast-track assessments of State Significant Developments,
rezonings and development applications (DAs), with
more decisions to be made by the Minister if required;

support councils and planning panels to fast-track local and
regionally significant DAs;

introduce a ‘one stop shop’ for industry to progress
projects that may be ‘stuck in the system’;

clear the current backlog of cases stuck in the Land &
Environment Court with additional Acting Commissioners; and

invest $70 million to co-fund vital new community
infrastructure in North West Sydney including roads, drainage and
public parks to unlock plans for the construction of thousands of
new houses.

We are keenly awaiting the release of further information and
the additional planning system reforms promised for the coming
weeks, and will be providing an update on the likely impacts and
effectiveness of any new measures. In the interim, there are also a
number of other opportunities that could be considered in the short
to medium term.

Short term opportunities to expedite approvals of critical
infrastructure

In the short term, expediting the assessment and approval of
critical infrastructure should now be considered.

Expediting critical health and education infrastructure

Already the NSW Government has introduced new legislation to
expedite development during the COVID-19 pandemic. The
COVID-19 Legislation Amendment (Emergency Measures) Act
2020
came into effect on 25 March 2020 and empowers the
NSW Minister for Planning and Public Spaces to authorise
development to be carried out on land by order, without the need
for any approval under the Environmental Planning and
Assessment Act 1979 (EP&A Act) or consent
from any person.1 The effect is that the making of an Order is
taken to be a grant of development consent.

But this power is not unqualified, and the Minister must consult
with the Minister for Health and Medical Research and be reasonably
satisfied that the order is necessary to protect the health, safety
and welfare of members of the public during the COVID-19
pandemic.2

One option for the Government is to consider widening the scope
of this power to allow the Minister to prioritise critical
infrastructure projects that would not otherwise qualify for
expedited approval. This could include health and education
infrastructure projects, such as the development of new hospitals
or new classrooms.

Expediting shovel-ready projects

Another option is to expedite and prioritise shovel-ready
projects that generate employment or will contribute meaningfully
to housing supply. The lead time of large infrastructure projects,
combined with impacts to supply chains, means that the economic
benefits of projects may not be seen for years to come. Identifying
and prioritising shovel-ready projects that will create jobs now is
critical.

The NSW Government and industry can work together to identify
these projects and the Industry Associations are no doubt working
with Government to assist with this process already as suggested by
this morning’s announcements. It is important though that there
are a specific category of developments that are treated as a
‘first priority’ as resources may become an issue if the
NSW Government casts the net too wide. No doubt this will be
considered. A new State Environmental Planning Policy may be
required in order to fast-track approval for these projects, which
may be declared on a site-by-site basis or potentially by category
with appropriate capital expenditure and other thresholds.

An example of how this approach has been used previously is the
Nation Building and Jobs Plan (State Infrastructure Delivery)
Act 2009 No 1 (NSW), which the NSW Government introduced to
give effect to the partnership agreement between the States and the
Federal government during the Global Financial Crisis
(GFC). That Act created the power for certain
Government funded infrastructure projects to effectively be
fast-tracked, by exempting approved projects from all or any
specified development control legislation.

Medium to long-term opportunities for building development

There are also long term opportunities for substantive changes
to the NSW planning system which could help kick-start a
post-COVID-19 economic recovery.

Code assessable development

One such measure would be adopting a form of ‘code
assessment’, like that which applies in Queensland.

The latest and most significant attempt to move towards a broad
code assessment framework in NSW was the partially-deferred Low
Rise Medium Density Housing Code (Medium Density
Code
).

The Medium Density Code, which is expected to come into effect
in a further 45 council areas on 1 July 2020, sets standards for
the approval and construction of dwellings such as terrace houses
and dual occupancies, allowing this development to take place in a
similar fashion to Queensland’s code assessment regime.

The application of code assessment in Brisbane’s planning
scheme provides a good model for the NSW Government to consider for
Sydney. In Brisbane, code assessment is a significant part of the
planning mix of a local area, and Council’s Planning Scheme
contains codes for a number of types of development.

Brisbane’s Planning Scheme has a multiple dwelling code,
similar to the NSW Medium Density Code, but also features codes for
childcare and community centres, retirement and residential care
facilities, and industrial uses such as service stations and
industry. The opportunities for NSW are not just in ensuring good
design outcomes and facilitating the right kind of development, but
ensuring that housing and job-generating projects get off the
ground with less fuss and occur where they are most needed.

Code assessment presents a longer-term opportunity to ensure a
steady pipeline of appropriate development across Sydney and the
state.

Extension of physical commencement timeframe for planning
approvals

Another measure to ensure that the planning system is equipped
to flexibly respond to the impacts of the COVID-19 pandemic is to
extend the lapsing period of development consents.

Under the EP&A Act, development consents can be granted with
a shorter lapsing period than the maximum five years.3 As
the impacts of the COVID-19 pandemic continue, there is a risk that
a shorter period will not be long enough for developers to obtain
finance and physically commence construction work, so as to prevent
the consent lapsing.4

To address this issue, the government could consider introducing
a statutory amendment to the EP&A Act to prevent consent
authorities from reducing the maximum five year lapsing period when
granting development consent for the next 12 months.

While developers can already apply for a one year extension of
their development consent under the EP&A Act, up to the maximum
five year period, a more thorough and simplified approach would be
to legislate that all existing development consents have their
lapsing period automatically extended to the maximum five year
period.

This form of statutory amendment has was previously introduced
in NSW during the GFC to extend the lapsing period of existing
development consents.5

Of course, there are other opportunities that could be
considered, including:

expanding the categories of exempt and complying
development;

expedited rezoning assessments and reviews (this appears to now
be under consideration as of this morning);

expansion of the use and duration of site compatibility
certificates; and

the introduction of statutory timeframes associated with
priority precincts.

All of the above are options that are always on the table, but
may now have more merit in the context of ensuring, for example,
affordable housing and the supply of essential goods and services.
All of the above, of course, requires sufficient State and local
Government resources to facilitate expedited approval timeframes,
whilst simultaneously ensuring appropriate and fulsome assessment
of each proposal. The current disruption to employment in many
sectors may present an unusual opportunity in this regard.

We look forward to updating you on the further announcements
regarding the ways in which the NSW planning system will assist the
economic recovery in NSW.

Footnote

1 Environmental Planning and
Assessment Act 1979,section 10.17.

2 Environmental Planning and Assessment Act
1979,section 10.17(5).

3 Environmental Planning and Assessment Act
1979, section 4.53(2).

4 Environmental Planning and Assessment Act
1979, section 4.53(4).

5 Environmental Planning and Assessment Amendment
(Development Consents) Act 2010.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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