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Rob Carletti

September 2023

The Victorian State Government released its long-anticipated Housing Statement today with an outline of immediate and future (medium term) reforms to the Victorian Planning System.

With housing supply pressures a prominent issue in both the federal and state political arenas, the Housing Statement has been in preparation for some time.

The reforms seek to facilitate the delivery of 80,000 homes per year (including social and affordable housing) and ‘re-focus’ growth to achieve the long held policy goal of 70% of housing growth within established urban areas (through infill development) and 30% within the greenfield growth areas (within the Urban Growth Boundary).

Summary of Announcement

  • The expansion of the eligibility criteria for the Development Facilitation Program (DFP) which will apply to residential projects with a development cost of at least $50M in Metro Melbourne or $15M in Regional Victoria where at least 10% of dwellings are provided as Affordable Housing.
    • The Minster for Planning will be the Responsible Authority for the application.
    • The DFP will commit to making decisions within 4 months from lodgement.
    • Public notice will be required but (similar to the non-government schools provisions) objectors will not have the ability to appeal decisions to VCAT. Applicants will have the ability to appeal DFP’s decision.
    • 90 new planning staff will be employed to assist the DFP process.
  • New planning controls to deliver 60,000 additional homes in an initial 10 activity centres across Metropolitan Melbourne, which includes:
    • Broadmeadows.
    • Camberwell Junction.
    • Chadstone.
    • Epping.
    • Frankston.
    • Moorabbin.
    • Niddrie (Keilor Road).
    • North Essendon.
    • Preston (High St).
    • Ringwood
  • All 44 existing public housing towers will be demolished and redeveloped by 2051. The amount of public housing will increase by 10%, whilst the overall capacity will be tripled (from 10,000 residents within the existing towers to 30,000 residents once redevelopment is complete). The Premier has described this as the ‘largest urban renewal opportunity conducted in Victoria’.
  • The ‘Future Homes Program’ will be expanded from its current trial location in Maribyrnong to General Residential Zone land throughout Victoria. This allows for adoption of three storey ‘pre-vetted’ apartment designs, with applications exempt from third party appeal rights.
  • Commitment to implementing the recommendations of the 2021 Red Tape Commissioner Report – Turning Best Practice into Common Practice.
  • For smaller developments, applications will be streamlined via:
    • Allowing single dwellings on lots less than 300sqm with no overlays access to the ‘VicSmart’ process.
    • Exempting all single dwellings on lots over 300sqm from requiring a planning permit under the zone (overlays will still apply).
    • Exempting ‘granny flats’ from requiring a planning permit up to 60sqm in size.
  • Ramping up spending of the Growth Area Infrastructure Contributions (GAIC) Fund on projects within the growth areas.
  • Efforts will be made to require water corporations to collaborate with developers to streamline approvals.
  • Implementing the recommendations of the 2022 Parliamentary Enquiry into the Better Apartment Design Standards.
  • Implementing ‘deemed to satisfy’ provisions (presumably through a review of the current ResCode provisions).
  • Replacing Plan Melbourne with a ‘Plan for Victoria’ including broader aspirations for 20 minute neighbourhoods.
  • Priority given to the redevelopment of properties with substantial capacity for housing, including:
    • Accelerating the delivery of the Arden Precinct.
    • Releasing 45 government sites for the delivery of 9000 homes (with a minimum 10% of affordable housing to be provided).
    • Exploring opportunities for office buildings to be converted into residential buildings (in conjunction with the Property Council of Victoria).
    • Continuing to have DTP lead delivery and co-ordination of priority precincts (such as Fishermans Bend, Docklands) with additional priority precincts such as East Werribee, Footscray and Sunshine identified.

These measures sit alongside a range of ‘non planning’ reforms, such as an AirBnB levy, rental reforms and taxation reforms which all seek to increase housing supply and facilitate more affordable and social housing in both the sale and rental markets.

The broad key strategies were outlined today. state government has made it clear that further detail on the reforms to the Planning and Environment Act 1987 and the operation of the Victorian Planning System (and Councils) will occur in due course.

Victoria's Housing Statement VC242 Planning Scheme Changes

Our Early Reflections

Tract welcomes the announcements as a positive and substantial step towards ensuring sufficient housing is delivered within Victoria in preferred locations in a timely manner to address the current housing crisis.

We applaud the commitment to engaging with private developers to deliver social and affordable housing, and for recognising that there must be appropriate incentives in place for this to occur.

The reforms are broad-ranging and consider areas outside of the planning system that influence the ability to deliver good planning outcomes that accord with broader strategic planning objectives. Whilst there is a lot to digest in the changes both the Premier and Planning Minister have been clear that there is further work to be done. We offer the following initial thoughts:

Whilst significant changes have been outlined, the process for the development of planning policy in Victoria will remain the same. Council officers will continue to prepare housing policy which, despite the best efforts of planning departments, can be heavily influenced by local Councillors. This has led to zoning regimes which direct housing growth to larger commercial sites, rather than facilitate the ‘missing middle’. It does not appear that this particular issue has been addressed. There is an opportunity for DTP to take a more active role in ensuring policy creates good planning outcomes and encourages more ‘missing middle’ housing in locations where people want to live.

This may also assist in gradually facilitating a cultural shift away from desiring a larger suburban home and land to smaller housing. This could be achieved, for instance, through broadening the use of the Residential Growth Zone (RGZ) across Melbourne’s inner and middle ring, rather than the ‘default’ use of the General Residential Zone (GRZ) which restricts development to a certain height and scale. Alternatively, if the RGZ is not to be applied more broadly, then the GRZ should be reformed to remove the ‘blunt’ mandatory Garden Area and height restrictions, to facilitate the missing middle.

The announcement of the redevelopment of all existing public housing towers by 2051 is a welcome opportunity to provide modern, fit for purpose housing whilst also delivering substantial new housing uplift and creating urban renewal opportunities in well serviced locations. We consider that there is an opportunity for the government to set more ambitious social housing requirements for government owned land, particularly given the appetite to allow for density bonuses.

We welcome the announcement of further changes to apartment standards, such as implementing recommendations of the Parliamentary Enquiry into the Better Apartment Design Standards (BADS), which will further expand the provisions, and utilising ‘Deemed to Satisfy’ provisions for other residential developments, limiting assessment to only areas where variations are sought.

  • This is particularly important, with a recent report prepared by RMIT University (Centre for Urban Research) and the University of Western Australia (Australia Urban Design Research Centre) ‘Designing the High Life’, identifying that only 9% of apartments tested in Melbourne were deemed ‘high policy performance’. This was in comparison to the tested apartments in Sydney, which achieved 86% compliance, and Perth which achieved 53% compliance.

The government has flagged their intent to deliver clear and improved planning controls for 10 Activity Centres around Metropolitan Melbourne. Whilst many of these centres are in need of updated controls, there appears to be little justification for the selection of these specific centres.

For instance:

  • Frankston, Broadmeadows, Ringwood and Epping are all Metropolitan Activity Centres (highest order activity centres) and there we consider that a focus on these centres is warranted. However, we note that draft controls in Frankston are already with the Minister’s office to consider and the controls for Ringwood were only recently adopted following a full Planning Panel process. Is the government looking to start these processes from scratch or retrofit existing or proposed policy?
  • Whilst Niddrie and Essendon North are important centres for the local region it is questionable whether they are capable of delivering substantial housing. In these cases priority may have been better focused on larger centres with rail access and more substantial growth opportunities.
  • No mention has been made of precincts surrounding the Suburban Rail Loop, where government has previously spoken to the opportunity for to higher density transit orientated development.

We see further opportunity to reform the development contribution process to ensure that the contributions paid by developers are targeted to key funding priorities. The haphazard introduction of various developer levies, contributions and taxes has resulted in an inefficient system which would benefit from a more fulsome review.

We encourage the state and federal governments to consider broader taxation reforms to improve housing mobility and ensure that the correct signals are being given to encourage infill development and unlock land in established suburbs for growth.

Our Early Reflections

If you have any questions relating to the amendment, please contact Rob Carletti or your other Tract contacts should you wish to discuss this further.

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