Tighter controls on voluntary planning agreements
Speaking to a packed room at a Property Council luncheon last week, NSW Planning Minister Rob Stokes promises to reduce development costs by providing clarity on Voluntary Planning Agreements.
More than 0 members attended the event, during which the Minister (pictured) announced that amendments to the Environmental Planning and Assessment Act would place tighter controls on how VPAs are negotiated.
A mechanism under Section 93F of the Environment Planning and Assessment Act, VPAs are available to councils to secure funding for infrastructure as part of a planning proposal or development application.
Stokes says the Baird Government supports VPAs, but there is growing concern that the development industry is “being held to ransom” by some councils demanding excessive sums without any identifiable infrastructure plans.
“Industry has raised concerns about the lack of consistency and the practice of councils with Voluntary Planning Agreements,” Mr Stokes says.
“In certain circumstances we have a case where assessment processes are being held to ransom, increasing costs for new homes by up to thousands – a cost being borne, in the end, by home buyers.
“Often, the money is used to cross-subsidise other areas of local government, rather than being used for what it’s meant for – local infrastructure,” he says.
The proposed changes would encourage councils and developers to work together from the outset of a development proposal, considering what infrastructure is needed in local areas to support development, and how much it will cost.
Property Council NSW executive director Jane Fitzgerald says VPAs are “an important mechanism to secure the flexible and timely delivery of infrastructure and to unlock the economic value of land.
“However, we need to take care to ensure that planning authorities aren’t incentivised to misuse VPAs and that their misuse is penalised if and when it comes to light.”
“Extra costs arising out of the planning system add to the final price of a house or apartment, worsening the affordability crisis in NSW,” Fitzgerald adds.
She says there should be an expectation that development levies are reasonable, and that VPAs should not be used as a vehicle for excessive charges.
“We must set better disciplines around the scope and type of infrastructure to be funded by development, revive a ‘use it or lose it’ principle for infrastructure contributions, institute clarity and transparency around the process and adopt contemporary solutions such as growth area bonds,” Fitzgerald adds.
A Ministerial direction has been issued to all councils requiring them to prepare a comprehensive VPA policy linked directly to a clear infrastructure plan. The NSW Department of Planning & Environment is now seeking feedback on how to improve the policy framework for VPAs.