Issue No. 110
March 2017 new planner
the journal of the New South Wales planning profession
Infrastructure funding Development Contributions I Social Infrastructure Value Capture I Voluntary Planning Agreements Strategic and Statutory Planning Urban Design and Heritage Retail and Economic Planning Planning Advice Expert Evidence and Court Appeals Development Applications Call DFP Planning on 02 9980 6933 or visit Planning Proposals/Rezonings www.dfpplanning.com.au for more information.
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2 | MARCH 2017 | newplanner CONTENTS
This issue
New Planner is the journal of the New South Wales (NSW) planning profession. The Planning Institute of Australia (PIA) publishes New Planner in March, June, September Editorial 4 and December each year. The Journal provides a forum for news, opinion and the exchange of ideas on urban and regional planning in NSW and abroad. President’s message 5
CONTACT From the Minister 7 PIA NSW Suite 404, Level 4, 32 York St, Sydney NSW 2000 Transformation: The role of value capture to transform 8 T: 02 8904 1011 E: [email protected] New Planner Unlocking School facilities 10 E: [email protected] W: www.planning.org.au/news-archive/new-planner-nsw Local Government 12 CONTRIBUTIONS The Editors welcome contributions to New Planner in the Sydney’s Bennelong Bridge: Pioneering value ‘sharing’ 14 form of articles, opinion pieces, letters, reviews and news items. Please download the contributor guidelines from: Healthy Built Environments 16 www.planning.org.au/news-archive/new-planner-nsw Regional Planning 17 NEW PLANNER EDITORIAL COMMITTEE Managing Editor Value sharing for affordable housing 18 Alice Strömstedt MPIA, Architectus Associate Editors NSW Young Planners 20 Camille Lattouf MPIA, Architectus (Lead Editor, March 2017 issue) Funding affordable rental housing: What are the options? 22 Laura Wynne PIA Student, UTS Shona Porter PIA (Graduate), City of Canterbury-Bankstown A fairer way of delivering local infrastructure in the new Sydney 24 Elle Clouston MPIA, HillPDA Philip Graus MPIA, Cox Richardson Fairness and efficiency in infrastructure funding: A more 26 Benjamin Cohen PIA (Assoc.), Hassell sustainable value capture model Andrew Connor MPIA CPP, Waverley Council Development Contributions, Value Capture and Voluntary 28 SUBSCRIPTIONS Planning Agreements New Planner is only available for PIA members. To become a member contact: [email protected] or 02 8904 1011 Planning Perspectives 30 COVER IMAGE Render of Sutherland to Cronulla Planner Tech 31 Active Transport Link (Source: Architectus) Snippets 32
The Inbox 33
PIA Voluntary Planning Agreements Position Statement 34
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ISSN 1324-8669 PP a233-867-00015 newplanner | MARCH 2017 | 3 GUEST EDITORIAL Value capture Lifting the shroud
Joe Langley MPIA, Technical Director – Infrastructure Delivery, AECOM
For value capture disciples like me, our time in search of our Holy Professor Bill Randolph argues that affordable housing is vital economic infrastructure that Grail has been long, tedious and strewn with non-believers. The can be supported by Inclusionary Zoning, a six (not twelve!) true believers I’ve selected for this issue bring a form of value capture that progressive local cross-section of perspectives from academia, government and and global cities are using. the private sector that will help lift the shroud of mystery from Billbergia’s Rick Graf describes how this proven city-shaping infrastructure funding method. smart developers are taking the initiative to prove that well-designed value capture mechanisms can deliver major transport infrastructure while supporting profitable uch of the confusion around the view that the present local government private sector development. idea of value capture in Australia infrastructure funding system in NSW has can be put down to Australia’s been distorted by artificial restrictions At the metropolitan level, City of M natural rejection of conformity. and poorly targeted funding mechanisms. Parramatta General Manager Greg Dyer What other country would change rail gauges Capping of local government rates (since describes the multi-billion community because of an imaginary line on a map? 1977) and Section 94 contributions (since infrastructure tab needed to equip 2010) has forced councils to be “creative Value capture is a funding method that Parramatta for its role as one of three and innovative” in their search for ways identifies and hypothecates some portion dominant urban centres in Global Sydney. to meet their communities’ needs. In this of the value created by public investments, Even with value capture, Greg believes environment, nearly every source of revenue allowing public agencies to recoup a portion Federal and NSW government agencies will has been rebadged as “value capture” in the of their investments from direct and indirect need to consider other metropolitan-wide scramble to meet contemporary expectations beneficiaries in proportion to the benefits funding sources, such as road user charges for facilities and services. Rather than they receive. Potential beneficiaries include broadening value capture, Greg advocates and hypothecating stamp duties where both public agencies and the private sector fixing existing contributions schemes and significant value uplift has occurred. organisations. Importantly, the hypothecated funds should be dedicated to help pay for removing the distortions on funding sources. Professor Ed Blakely tackles the role of specific infrastructure investments that At the Federal and state levels, the elephant value capture in helping to fund mega produce these benefits. in the room is stamp duty. Adrian Dwyer of projects along Australia’s east coast. Professor Blakely proposes a Sydney- Pat Fensham of SGS Economics and Infrastructure Australia points out that stamp duty distorts the housing market, increases Parramatta-Canberra high speed rail link Planning helps us through the maze of funded in part by land value uplift, which value capture definitions by explaining that housing costs, restricts housing supply and would help release pent up demand for there are four different types of funding acts as a deterrent to homeowners who affordable housing, fund railway stations contributions, but only one that is a true wish to downsize. However, I suspect few and enhance job growth from the core of value capture method. The well spring of observers would agree that stamp duty pure value capture is actually drawn from captures value as it is currently applied. Canberra to the heart of Parramatta. increases in land value generated “wholly The benefits of land tax, on the other hand, Value capture funding mechanisms solve independently of any investment by the land are “wide-reaching, with positive impacts funding gaps not fully addressed by current owner or developer”. “It is reasonable”, Pat on housing availability and affordability, contribution schemes. Drawing upon the tells us, “that a share of the uplift in land collective wisdom of our panel of specialists, value be extracted to fund public benefits, transport network efficiency, infrastructure funding sustainability and long-term land- Australian value capture programs should including infrastructure”. Pat’s piece shows be guided by the following key principles; us how the uplift in land value is the result use planning”. Adrian makes the case for the of public sector land use policy changes, not Australian Government to provide incentives • Funds transformation infrastructure extracted from the fingernails of squealing to the states and territories to get on board that exceeds the capacity of traditional property owners and land speculators. with this long overdue reform. funding sources. Properly designed and implemented value The role of value capture • Is based on an agreed infrastructure list. capture mechanisms don’t reduce housing affordability or increase development costs. The problem with current funding • Focuses on precinct-based planning. mechanisms in NSW isn’t that we don’t • Requires private sector participation So what’s wrong with current funding have enough of them, it’s that the ones arrangements? in decision-making, investment and we do have don’t work well. Our authors delivery. There is legitimate concern by both advocates provide compelling cases for using value and opponents that value capture methods capture mechanisms to fund long-term, • Hypothecates funds captured into could result in double taxation of property. transformation infrastructure not already dedicated accounts. Greg New of GLN Planning shares the covered by local contribution schemes. • Includes sunset clauses with an end date n 4 | MARCH 2017 | newplanner EDITORIAL
NSW PIA PRESIDENT’S MESSAGE
Infrastructure provision in NSW
Jenny Rudolph MPIA, Director Elton Consulting, PIA NSW President
Planning for growth and land use planning across NSW • To understand and adjust mechanisms to ensure that appropriate development is should be integrated with infrastructure provision, whether its still motivated. state, local or community infrastructure. The principle of what • To ensure that all development type of infrastructure, who pays, and the equitable payment contributions funding regimes are of infrastructure is a vexed issue in NSW. This New Planner integrated and work together with no double dipping, and clear local and state issue provides some views to advocate and influence policy infrastructure delivery. related to the provision of infrastructure in NSW. • To consider relaxing rate pegging for local government to facilitate more funding for local communities. lanners acknowledge that the Voluntary Planning Agreements (VPAs) • To avoid over reliance on value capture - advocate that non-developer contributions infrastructure and associated are becoming more common, with funding means pay fair share. funding is a key component of any councils having tighter funding with P project. Planners are interested in rate pegging. Councils however need PIAs role should be to provide direction to infrastructure funding as it enables better the social infrastructure funding to be Local and State Government, rather than planning outcomes and delivery to occur. provided earlier than planned to meet wait for the broader industry to outline what Adequate infrastructure underpins the amenity community needs. VPAs however provide they want. PIA NSW needs to debate these of our town centres and neighbourhoods, less certainty and transparency for issues and quickly; as planners we need to n enables sustainable transport and access to existing communities. PIA NSW made advocate our position to government jobs and supports a socially inclusive state. a submission to the State Government Jenny Rudolph is a Director at Elton What crosses my mind however is whether regarding voluntary planning agreements Consulting and the current NSW PIA infrastructure funding mechanisms are advocating for further transparent and President. Jenny is a registered planner with becoming too complex? consistent local contributions development over 25 year experience working in local, guidelines, so to provide certainty to the state and private sector in South Africa and What type of infrastructure is really the industry, Councils and the community (see Australia. Jenny has experience in strategic, key issue? page 34 of this New Planner issue for PIA’s statutory and infrastructure planning in Much of the state significant infrastructure, VPA policy statement). renewal and green field development. such as Pacific Highway or hospitals, is state funded, and necessary for the productivity I believe the announcement of guidelines for of the state. This critical infrastructure is VPAs by the State Government in December important from a planning perceptive, but 2016 can provide principles to assist really, the real infrastructure concern is the all parties. The State Government also, provision and funding of roads, education and supported by many, recently introduced an visual impact assessment local community infrastructure. Funding and affordable housing levy applicable to sites to strategic urban design provision of affordable housing is also being be rezoned. The principle of “value capture” advice considered as part of key infrastructure. is seen as the infrastructure funding mechanism in this respect. How value How is this key infrastructure typically capture is calculated and whom the money is funded? provided to (local or state) are controversial The most common funding mechanism elements being worked through. is local development contributions, or a state infrastructure levy. Each has its What should the debate on infrastructure own purpose and test for reasonableness funding include? and nexus. Developers commonly opt All Planners should begin the debate and to construct the local development together quickly advocate to government: contribution facility, to ensure it is • To provide simpler funding mechanisms built in line with housing development, with clear and transparent guidelines. rather than pay local contributions. The IPART Guidelines for local infrastructure • To provide a transparent means of provide costs and approach to costing quantifying uplift. infrastructure, however they are applied • To ensure an efficient and fair mechanism envisageconsulting.com.au differently by regional and urban Councils. of extracting the value uplift. newplanner | MARCH 2017 | 5 6 | MARCH 2017 | newplanner REVIEW
FROM THE MINISTER
Infrastructure is booming
The Hon Rob Stokes, NSW Minister for Planning
Over the next four years the NSW Government will spend $73.3 billion on infrastructure. That’s more on investment in building transport infrastructure than either New York or London, and as much on road and rail as the other Australian states combined.
e’re in the midst of one of the Fairer biggest infrastructure booms Under the existing legislation there is no ever seen in Sydney and this ability to levy for special infrastructure W investment is essential to help contributions on complying developments, support the needs of our growing population, as can be done for standard development projected to increase by more than 100,000 applications. Under the proposed changes, people every year until 2036 – 2.1 million this would be corrected by allowing special new residents. infrastructure contributions to be required To help prepare for future growth, the for complying developments. NSW Government will continue to make to the staging of development and any Additionally, there have been concerns raised development which occurs outside of this significant investment in infrastructure about the lack of consistency and the practice across the state. At the same time, there sequence will be required to pay a greater of Councils’ voluntary planning agreements. proportion of infrastructure costs. will be new local infrastructure like schools, At the same time, they do enable the delivery parks and local road upgrades that are of public benefits to the broader community Each SIC will include a schedule of required as a direct result of land releases, where a new development, such as an urban infrastructure projects needed to support subdivisions, new industrial and commercial renewal precinct, new greenfield release growth up until 2036 and contributions facilities. In these instances, developers are area, or mining or resources project, create calculated according to the cost of expected to make a contribution towards the a need or opportunity for infrastructure infrastructure required. In turn, greater cost of this infrastructure. investment. The proposed changes to the collaboration between the NSW Government In 2016 the Government commenced EP&A Act amend powers of the Minister so and Councils on strategic planning and legislative reform to assist with new that they can direct the method of calculation sequencing, will enable more effective delivery infrastructure planning and delivery when it on the development contribution. of infrastructure, as we continue to grow. established the Greater Sydney Commission. Future needs One of the Commission’s aims is to promote This approach ensures a fairer legislative the alignment of Government infrastructure framework that allows for innovative Despite NSW’s record investment, we face decision-making with land use planning. The infrastructure delivery, while at the same significant challenges to fund both new and establishment of the Commission’s statutory time ensuring Councils and developers improved infrastructure as our communities Infrastructure Delivery Committee was an follow appropriate processes, set reasonable continue to grow and our cities and towns important step towards achieving this goal. limits, and improve consistency across evolve. Current conventional methods of different circumstances. infrastructure funding from general taxation In 2017 the Commission’s Infrastructure More efficient or charges from development contributions Delivery Committee will take the lead in may not always be sufficient to meet our preparing infrastructure delivery plans for We also need to look at ways of improving future infrastructure needs. priority growth areas, as well as annual the infrastructure contributions system infrastructure priority lists which identify more broadly. That’s why in high growth The Government is also looking closely at the type of infrastructure needed to support areas designated as priority precincts innovative approaches to infrastructure housing supply and job growth across or priority growth areas in Sydney, the funding over the longer term that better metropolitan Sydney. Hunter or the Illawarra, the Department recognise how public investment in infrastructure benefits individuals and groups In January this year, the NSW Government of Planning and Environment is preparing in the community. These options will also also released a series of targeted Special Infrastructure Contributions (SIC) help to establish the sustainable, efficient, amendments to the Environmental Planning determinations for regional infrastructure. and fair infrastructure funding arrangements and Assessment Act 1979 for public These SICs will help provide funding towards we need to support NSW’s growth into the consultation. Part of the proposals included the cost of infrastructure that enables and future and for which our recent legislative changes that aim to make the existing supports growth. This would include regional reforms lay the groundwork n contributions system toward infrastructure infrastructure in the transport, health, funding more efficient and transparent to education and justice sectors, as well as for * Rob Stokes was the Minister of Planning enable fairer sharing of costs and benefits open spaces. Importantly, the delivery of at the time of publication and has since been where development occurs. infrastructure and services will be aligned appointed as the Minister of Education. newplanner | MARCH 2017 | 7 FEATURE ARTICLE
Transformation The role of value capture to transform
Professor Edward J Blakely, Professor of Urban Policy, University of Sydney
Value capture should be focused on transformational Much like the Melbourne Docklands and Barangaroo, the Hudson Bay Yards project infrastructure that is beyond the nature and capacity of existing is using the space above obsolete freight infrastructure funding arrangements. and railyards to create new development opportunities. This land is rezoned, covered with a building platform, re-valued for ost of what you read about value In New York, the Hudson Bay Yards project its highest and best future use, and sold capture focuses primarily on will alter the city’s landscape on the to developers. A portion of the resulting local infrastructure and housing. west side using these and other funding increase in value is ring-fenced and captured While these are important and in innovations. This transformational urban through the sale of development rights, new M infrastructure funding arrangements, creative fact the best-known and most widely used renewal project, a quarter of the size of forms of value capture, they are not the Manhattan, could only be achieved by tax deferrals and other incentives. These sources pay back loans and bonds over 20 most important uses of this valuable tool. applying value capture strategies. This to 30 years to pay for core infrastructure and We seldom think of how those magnificent megaproject is being realised by building public domain improvements. This, too, is a rail systems in Japan are paid for. Nor do over the rail yards that once brought goods form of value capture. we focus on the many railway bridges and from the southern half of the United States tunnels in Europe that are truly remarkable to New York City. At one time, the rail What could value capture mean for us? in size, scale and impact. However, if it were yards fed the docklands along New York Metropolitan Sydney will not be able to not for the use of value capture, these large harbor before the riverfront become largely achieve its ambitious long-term objectives transformational pieces of infrastructure idle, disused space over recent decades. with singular, piecemeal projects paid from would not exist. Today, the areas above and surrounding the State’s traditional general revenue the railyards abutting the Hudson River Japan is the best case in point. Japan’s sources. It requires new funding and are being reshaped with a new skyline attractive, integrated train stations are financing arrangements between local, state and integrated transit hub near New York financed by capturing the value around and federal agencies. That’s the reason for City’s epicentre. Like the redevelopment of these interchanges, connecting city the Western Sydney City Deal. While we the Highline, a former elevated freight line networks and large trade terminals with the know little more than an airport is at its transformed into a linear park, the Hudson nation’s high-speed rail network. Without core, we should also imagine a much more Bay Yards will become a truly remarkable well-defined transformative set of projects value capture, this expansive, state-of-the- and magnetic feature for the city. associated with the new West Sydney Airport art infrastructure would not be in place. Major office, retail and hotel complexes above the stations feed and finance these magnificent railway stations. Similarly, the Hong Kong rail system is in fact a value capture program that provides world-class transportation as a key by-product of major real estate projects. We tend to think of value capture as solely the uplift associated with zoning and density changes along transport routes. This is not the most ambitious version of value capture. The more dramatic city-shaping, transformational aspects of value capture arise from building and operating major airport, bus and train terminals, major shopping centres and entertainment complexes. In some instances, these high density centres are funded directly by capturing some portion of the increases in property value and tax revenues to build and maintain these facilities. Figure 1: Hudson Bay Yards (Source: Author) 8 | MARCH 2017 | newplanner FEATURE
that might be funded and financed through a value capture model. Let me suggest at least one project that might be substantially organized around value capture principles. Canberra-Western Sydney-Parramatta high speed rail There is an obvious need for a high-speed rail route for the region and the nation between Sydney and Canberra, so linking the intellectual, political and financial capitals of Canberra, Parramatta and Sydney seems like a no-brainer. This could be funded in large measure by value capture initiatives along the route. Value capture would be achieved by creating a value capture corridor for the full length of the line of 250 – 400 metres on each side of the rail line where property uplift from rezoning would be levied, thus gaining some portion—perhaps up to 30 percent—of the gross uplifted land value, plus a portion of the increased value of the developed property. These funds would be re-invested along the corridor to build railway stations and other amenities ranging from bushland protection to parks and community facilities. The rezoning and awakening of this corridor would be a game changer for the entire Sydney basin. It would reduce population pressures on Sydney by allowing for more moderate density along the new rail route. At the same time, it would enhance job growth by creating an innovation belt stretching from the core of Canberra to the heart of Parramatta. If Parramatta is in turn linked by metro or other high-speed systems to central Sydney, this new complex would make the region’s economic systems enormously more powerful, making Parramatta an epicentre like Pudong in Shanghai. Value capture is the key for this deal. Figure 2: New high speed+high value link Canberra-Badgerys Creek-Paramatta (Source: AECOM, 2017) Other mega-value capture opportunities Several value capture mega projects are In addition, Innovation Precinct value capture Dr. Edward J. Blakely is an Australian citizen already being openly or quietly pushed, such schemes are being promoted in every major who has held many posts both in Australia as a string of reinvigorated regional centres capital city to supplement the funding of and the United States. He was most recently, from Melbourne to Brisbane, with each centre sports arenas and entertainment complexes Honorary Professor of Urban Policy at the emerging as a value capture node similar across the nation. Townsville, Launceston and University of Sydney. He chaired the Sydney to those in Japan created by its high speed Newcastle illustrate opportunities for sports, Metropolitan Plan and is Greater Sydney rail network. Several high speed rail lines education and entertainment value capture Commissioner for West Central which are being proposed as strings of pearls from precincts. Value capture is the new funding includes Greater Parramatta. Dr. Blakely Sydney and Melbourne, with value capture tool that could be accelerating development in has held academic positions in teaching, as a base funding strategy. In the Melbourne these places by reinforcing state and federal research, academic administration, and - Brisbane corridor, various forms of value financing. Some form of large scale, multi- economic development policy for more capture are possible to provide the funding year value capture is the only means available than forty years. He is a leading scholar and base for new cities of various scales as an to reach the future without penalising practitioner internationally in the fields of answer to the housing and transport crisis. government finances in the present n planning and economic development.
Rural and Environmental Planning Consultants Ian Sinclair - Principal Consultant
PO Box 1858, Bowral NSW 2576 T: 02 4861 4983 F: 02 4861 6778 [email protected] www.ruralplanning.com.auw newplanner | MARCH 2017 | 9 FEATURE ARTICLE
Unlocking school facilities to achieve efficient provision of social infrastructure
Camille Lattouf MPIA, Associate, Architectus Matt Kelly PIA (Assoc), Urban Planner, Architectus
In NSW metropolitan areas, many schools occupy valuable recreation and open space. A combination of factors is contributing to this value uplift, and well placed sites—in many cases, close to transport including increased borrowing capacity, infrastructure, centres and amenities. With recent increases strong population growth, fixed inner city in density and property prices, the provision of open space in supply and slow response of unlocking 6 existing urban areas is becoming an increasing challenge for land. Coupled with the rising costs of land are the high annual costs of managing authorities. In addition to this challenge is the economic cost social infrastructure resources, a condition of providing social infrastructure such as parks, swimming associated with the community’s expectations pools, libraries, and community centres. Broadening the of high quality open space, recreation opportunities and social infrastructure. The community use of school facilities offers the opportunity to amount of money spent by local councils relieve pressure on existing social infrastructure and produce on recreation and leisure infrastructure is economic efficiencies for government and school systems. markedly increasing, highlighting the need to review how social infrastructure is funded and provided. The average spending per capita within NSW increased from $61 in 2004/05 to ver the next two decades Sydney’s degradation of facilities through overuse. $83 in 2008/09.7 Broadening the use of school population is projected to grow by Adequate size and quality of open space is facilities brings the potential to use existing 1 an additional 1.74 million people. elevated as a critical urban objective due to infrastructure more efficiently and reduce OTo accommodate this growth it is the decline in private open space and the economic pressure of local government and forecast that 700,000 to 800,000 new dwellings reduced capacity to pursue active leisure at school systems alike. are required.2 A similar phenomenon is home.5 New approaches to how open space expected for other major centres and capital and social infrastructure is provided and Schools provide untapped resources which cities throughout the country. The impact managed is necessary during this period of have the potential to add significant value of such growth is a reduction in adequate growth. Unlocking school facilities to achieve to the communities around them. Firstly, quantum of open space and other social efficient provision of social infrastructure schools are out of operation prior to student infrastructure per resident.3 Research shows offers a possible solution. arrival times and following afternoon that under provision is greatest in existing extracurricular activities. Further, schools In addition to the growing scarcity of adequate higher density areas that have been subject are generally closed for up to 12 weeks open space and general saturation of social to increased urban consolidation. Reasons of the year, a significant period that could infrastructure are rising land values. Land for under provision have been attributed be unlocked for community use. Facilities values in established and urban fringe areas to inapt Section 94 plans and a lack of within schools, such as multipurpose are high and rising, placing substantial local government revenue to maintain new halls, gymnasiums, sports fields, technical pressure on the availability of land for open space.4 Coupled with this issue is the learning spaces and flexible arts and creative
A practice with over 35 Michael Harrison, Director Urban Design & Urban Planning years of experience creating [email protected] award winning solutions in urban design, urban planning Jane Freeman, Senior Associate Urban Planning Urban Planning Urban Design and architecture. [email protected] Architecture Interior Architecture
Jane Fielding, Senior Associate Urban Planning Adelaide [email protected] Auckland Brisbane Christchurch Deena Ridenour, Senior Associate Melbourne Urban Design Sydney [email protected]
Greg Burgon, Senior Associate Level 18, MLC Centre 19 Martin Place Urban Design Sydney NSW 2000 [email protected] T +61 2 8252 8400
10 | MARCH 2017 | newplanner FEATURE article or or eation | MARCH 2017 | 11 | MARCH 2017 | 11 ation, 2009, Community is an Associate and Urban is an Urban Planner at planner new NSW Department of Planning, 2014, A Plan f NSW Department of Planning, 2014, A Plan f Searl Searl NSW Go Lo NSW Department of Planning, 2010, Recr NSW Department of Educ Growing Sydney Growing Sydney Growing in Provision Open Space Inadequacy of Local 29:02, 201-208 and Research, Urban Policy Sydney, in Provision Open Space Inadequacy of Local 29:02, 201-208 and Research, Urban Policy Sydney, Living, 2011, Open Spaces the 54th Shann to Address Policy, and Monetary Memorial Lecture Local Planning Guidelines for and Open Space Government Use of School Facilities e, G.,2011,UrbanConsolidationandthe e, G.,2011,UrbanConsolidationandthe LandValues 2015,NationalWealth, P., we, Active Councilfor Premier’s vernment: community building. localised socio-economic development and design focus on adaptability and resilience. Planning. Camille has a strong interest in for disadvantaged communities, and a and Culture Change and Bachelor of producing equitable infrastructure outcomes has a Master of Development Studies Matt has a passion for social planning and Lebanese Film Festival in Australia. Camille and Bachelor of Design in Architecture. Planner at Architectus and directs the Architectus. Matt has a Master of Planning Lattouf Camille Matthew Kelly Kelly Matthew Endnotes 1 2 3 4 5 6 7 8 e considered in and engaged e considered tem of efficiently coordinating coordinating of efficiently tem vernment leadership and coordination and coordination leadership vernment funding of school facilities is required. The is required. funding of school facilities could be coordination efficiencies in such and government local to both significant for value better for schools, and allow of Section 94 Contributions, schoolmoney n grants and government Schools ar Go A sys as part of the strategic planning process. planning process. as part of the strategic school systems the varying between (public, Catholic and independent) in the for frameworks integrated creating use of schools by the public, coordinating and and risk, booking systems insurance the management of such facilities.
and school grants and funding, whilst also and funding, whilst and school grants maximising the efficiency of school land. across grow to As the population continues and many Area Metropolitan the Sydney further cities and towns, of our regional we how to should be given consideration grants and Government utilise contributions and infrastructure local for efficiently more maximise the use of school can we how and open space. facilities Conclusion and recommendations the use of schools is maximised, ensure To more become facilities and land as particularly significant experiencing in areas sought after it is recommended: population growth, 1. 2. 3. Figure 2: St Michaels Grammar School, The Gipson Commons (Source: Architectus) Whilst these guidelines Whilst 8 more efficient use of Section 94 Contributions 94 Section of use efficient more facilities (by councils and schools) and lead to and schools) and lead councils (by facilities area. This can help avoid duplication of duplication help avoid This can area. framework within each local government within each local framework community facilities and open space facilities community cooperate and be integrated into the broader the broader into and be integrated cooperate government and individual schools to government perspective, there is opportunity for local local is opportunity for there perspective, From a maintenance and cost burden burden and cost a maintenance From funds and maintenance of facilities. funds and maintenance booking systems, and the coordination of and the coordination booking systems, communities manage risk and insurances, manage risk and insurances, communities policy should guide the way schools and the School Associations, is required. Such a is required. School Associations, Catholic Education Offices and Independent Offices Catholic Education major school administrations such as the major school administrations of Education and representatives of other and representatives of Education Planning and Environment, the Department Planning and Environment, local government, the Department of government, local working group of representatives from from of representatives group working framework, implemented through a joint through implemented framework, is ad hoc and discretionary. An integrated An integrated is ad hoc and discretionary. serve a great purpose, their application purpose, their application a great serve by the public. guidelines for state schools on their use state guidelines for The NSW Department of Education provides provides The NSW Department of Education planning practice. a need for engagement with schools in a need for of schools by the community, indicating indicating of schools by the community, processes for obtaining consent of the use consent obtaining for processes of understanding of the permissibility and of the permissibility of understanding infrastructure and there is a general lack is a general and there infrastructure planners consider schools as public consider planners In urban planning practice seldom do In urban planning practice potential cost burden on schools. burden cost potential guidelines, insurances and risk, and the guidelines, insurances planning practice, integrated school use integrated planning practice, use, predominantly with respect to urban to with respect use, predominantly present a barrier to their broader public their broader a barrier to present schools, a number of hurdles currently currently schools, a number of hurdles Despite the potential, untapped value of value untapped the potential, Despite facilities to service local communities. local service to facilities a unique opportunity to provide high quality provide a unique opportunity to of schools across cities and towns, there is there cities and towns, of schools across existing public facilities. Given the spread the spread Given public facilities. existing spaces, provide the potential to supplement supplement to the potential provide spaces, Figure 1: Kew Primary School (Source: Architectus) FEATURE ajority of the projected population growth population growth ajority of the projected m the from of Parramatta, west will occur: Sydney Western through regions north-west directly, Stated centres. south-west the to not are if these areas will fail Sydney mix of a sustainable in delivering successful and economic accommodation residential which with all the elements activity, together Infrastructure communities. real create on a delivered that success, to is the key by unaffected basis and with certainty timely cycle. political not infrastructure more need we Of course, also growth—we with future cope to just significant deal with an existing to have Sydney Western backlog. infrastructure in many areas: underserviced is already together schools, public transport roads, facilities. with a shameful lack of cultural in excess requires The City of Parramatta infrastructure—a of $1b of community funding the traditional way beyond task This reality Government. Local for sources Sydney all western across is replicated council for requirement and the total LGAs no would Sydney in western infrastructure billion dollars. several doubt total Who should pay? polycentric The benefits of a successful living in by everyone city will be shared funding models must Therefore, Sydney. of the burden which spread be found Sydney western for infrastructure creating Some all of Sydney. across equitably and required are conversations difficult will be needed. leadership political strong is not the complete capture value Whilst in the mix. belongs it certainly answer, National for Era New ‘A report The PIA’s for case City Planning’ made a compelling and transparent fair rational, establishing from value capturing for structures highlighted, As the report development. across collaboration needs be better there It is, then, pleasing of government. all levels acknowledge Government see the Federal to of its release this with the November to capture paper on using value discussion infrastructure. more help deliver need to move closer to where the where to closer move need to conversation by asking ourselves—what by asking ourselves—what conversation firstly to be delivered must infrastructure a halt—and grinding to the city from keep needed that what’s beyond then determine a modern functioning metropolis deliver to and work who live in which the people thrive. within it can projects, transport scale The usual large utilities with schools, hospitals, together be significant will obviously and universities, should the but so too on the list, items our make to required infrastructure ‘softer’ parks and green everyone: for city liveable hubs, child paths, community bike spaces, key housing for affordable centres, care as a as well and the disadvantaged, workers facilities. of cultural spread broader be must of government levels All three of and costing included in the preparation in government of local and the role the list, create needed to the infrastructure providing and resilience social coherence, liveability, be more must diversity, cultural successful in the process. acknowledged directly approach is a danger that the current There funding, and infrastructure infrastructure to pursues of government each level whereby a piecemeal agenda, will produce its own in which the result and uncoordinated with will be the community, loser inevitable provide to being unable government local assets. level community critical cities model The three envisions Commission Sydney The Greater as a city based on the Sydney Global dominant urban model of three polycentric as CBD, Parramatta the eastern centres: as a city and Badgerys Creek the central that This recognises aerotropolis. western activity of economic concentration continued nable. is not sustai seaboard on the eastern Jobs
planner CEO, City of Parramatta Council CEO, City of Parramatta Dyer, Greg Value capture Value puzzle large of a very One piece LOCAL GOVERNMENT LOCAL new rowth forecasts show that show forecasts rowth population will increase Sydney’s the over rates at near-exponential with the number 30 years, next
approach is needed. Let’s start the start is needed. Let’s approach on the size of the funding pie, the opposite on the size of the funding pie, the opposite projects on a piece-meal basis dependent on a piece-meal projects of funding mechanisms and developing of funding mechanisms and developing than being constrained by an existing suite suite by an existing than being constrained is required as the starting point. Rather as the starting is required A requisite infrastructure inventory listing listing inventory infrastructure A requisite The first step: Defining the problem problem Defining the step: The first funding required. funding required. consider the enormous scale of the total of the total the enormous scale consider however these conversations are yet to fully fully to yet are these conversations however need for new and different funding sources, funding sources, and different new need for There has been some recognition of the has been some recognition There funding task that Sydney faces. that Sydney funding task additional revenues, given the mammoth given additional revenues, will assist, they cannot provide sufficient provide cannot they will assist, it. While new mechanisms of value capture capture mechanisms of value new it. While mix of funding options—will simply not cut mix of funding options—will simply previously. Business as usual—the standard as usual—the standard Business previously. be different from anything we’ve done anything we’ve from be different and the solutions adopted must therefore therefore must and the solutions adopted been faced before. The approach taken taken The approach before. been faced The scale of what’s needed has never needed has never of what’s The scale government will be required. will be required. government the required infrastructure by all levels of by all levels infrastructure the required coordinated approach to the building of to approach coordinated vibrant, wonderful place to live, then a live, to place wonderful vibrant, competitive city and continues to be a to city and continues competitive its reputation as an internationally- its reputation ensure that Sydney retains (and improves) (and improves) retains that Sydney ensure a daily basis is significant. If we want to we want If basis is significant. a daily greater than 7 million people function on function than 7 million people greater infrastructure required to make a city of a city of make to required infrastructure Clearly, the task of building the the task Clearly, European settlement. European same number as over the first 200 years of years 200 the first same number as over Sydney region growing in that time by the growing region Sydney of people who live and work within the and work who live of people
G infrastructure. infrastructure. unprecedented level of planning and massive provision of provision of planning and massive level unprecedented promise of incredible opportunity, but demand an of incredible promise Projections of Sydney’s future population growth present present population growth future of Sydney’s Projections 12 | MARCH 2017 | REVIEW
Other funding mechanisms are required our roads as a motorist travelling from solution. A coordinated approach is required To finance Sydney’s massive future Wahroonga to the Sydney CBD, who has a which looks at new and innovative funding infrastructure requirements we need a suite of public transport options? mechanisms that reflect the importance not only of large-scale traditional infrastructure mature debate about smarter, innovative Road usage charges could also help ensure projects, but of the local, community-level funding strategies that are more broadly optimum utilisation of our road network by based. We need to encourage a mix of amenities to make our city liveable for easing congestion. The Federal Government everyone in the decades to come n funding mechanisms on top of developer has noted a growing momentum for road contributions and value capture. Public- charging and investment reform and Greg Dyer is CEO of Parramatta City private partnerships can help pay for such reform could help fund significant Council. Greg graduated with degrees in road and rail projects where strong infrastructure programmes. economics and law from the University and predictable revenues are forecast. of Sydney. He has previously worked However, PPPs can only deliver a portion Other methods of achieving recurrent in accounting at KPMG and finance at of the total funding required. long term funding include ‘ring fencing’ or Australian Consolidated Press. He was hypothecated stamp duties over a 20-year Finance Director of Murdoch Magazines, In Portland, Oregon, for example, a new period on properties which significantly and CFO at publicly listed APN News and funding mechanism is on trial which benefit from the uplift in value as a result Media. Subsequent roles in the property includes a broadly-based tax on vehicle of new infrastructure. A percentage of their sector included country head (CFO) mileage. The OreGo program is a per-mile stamp duty could be used to finance the of Mulpha Australia Ltd, a Malaysian- road-usage charge for drivers, currently infrastructure they benefit from. set at 1.5 cents a mile. based property company acquiring, Summary developing and managing a range of We should certainly also look at road Local Government funding mechanisms property and lifestyle investments access pricing for Sydney. A broad-based including Sanctuary Cove in Queensland, road access charge would help to pay for will not be sufficient to create a vibrant and liveable central city for Global Sydney. the Norwest Business Park, hotels and public transport infrastructure, provided integrated residential and commercial The infrastructure load is substantial and it has equity at its core. After all, why developments. Consolidating this will need to be carried by all three levels should a motorist travelling from Rooty experience, Greg moved on to become of government. Hill to Blacktown in Western Sydney—who Finance Director with Top 50 ASX-listed has limited public transport options—be Value capture, even if well designed and property company Mirvac Group, before facing the same taxes and charges to use implemented, can only provide part of the his current position at Parramatta.
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BartierBartier Perry Perry isis proudlyproudly sponsoringsponsoring the the PlanningPlanning InstituteInstitute of Australia Australia NSW NSW Division’sDivision’s ToolboxToolbox Series 20152014 Newcastle Office: P: + 61 2 4926 1388 Gunnedah Office: P: + 61 2 6742 0166 Sydney Office: P: + 61 2 9436 4210 www.bartier.com.au Website: www.monteathpowys.com.au Level 10, 77 Castlereagh Street Sydney FEATURE ARTICLE
Sydney’s Bennelong Bridge Pioneering ‘value sharing’
Rick Graf, Development Director, Billbergia Group
Unlocking high-density development potential, building In turn, this privately-funded public transport initiative would need a mechanism transport infrastructure and connecting waterfront to repay the private investment. It would communities, but without controversy—sounds impossible, also have to establish a means to harvest particularly in Sydney. In May 2016, the opening of Billbergia’s the increase in residential density enabled privately funded Bennelong Bridge across Homebush Bay was by the increase in transport capacity created by the bridge. It would require the increase unanimously celebrated by the community and welcomed by in value to be ‘shared’. We put forward a both government and opposition parties, and is an example of planning proposal to NSW Planning for successful private-sector application of value capture. approval to rezone the private 25ha under a merit-based new State DCP assessment that permitted 1,300 additional dwellings—a 20% increase on the peninsula. s Sydney’s growth sprawled west Billbergia Group brought together an alliance 70 years ago, waterfront land of neighbouring private landowners at the With no established government mechanism frequently housed factories and beginning of 2010 to increase housing output for value capture or value sharing, we took on A warehouses rather than homes. in their area. Billbergia, Sekisui House, City the front-end risk to establish the planning, The bold decision in 1988 to plan for the Freeholds and Homebush Bay Holdings scope, design, and cost of delivering the 2000 Olympic Games on a former industrial together held more than 25ha of industrial project. We engaged with the communities to precinct at Homebush Bay established a land at Wentworth Point. Together, we agreed understand their aspirations for the project toehold for urban redevelopment in what to fund and deliver what government couldn’t and established an ongoing reference group has now become the geographic heart of or wouldn’t—a bridge to connect with the so they could share the journey. Concurrently, Global Sydney. Rhodes community, linking the Sydney we navigated the requirements of 26 Olympic Park Authority (SOPA) ferry wharf government agencies including the two local The adjacent waterfront peninsulas of Rhodes with the Rhodes rail station, and providing councils, one at either end of the bridge. and Wentworth Point (formerly Homebush Bay buses a through route to destinations across West) were ideally positioned for conversion the network. The resulting 3-year negotiations led to the from industrial to residential, but higher adoption of a Voluntary Planning Agreement density and better transport were needed to The bridge would be gifted to government on (VPA), as the legal mechanism for the ‘value make the economics work. A bridge linking completion. It would reduce travel distance sharing’ exchange. Initially, SOPA stepped the peninsulas was proposed by Billbergia between the communities from 8km to less up to be the VPA party, but in 2013 passed as early as 2002, but it wasn’t a priority for than 400m, and from a 30-minute drive to a that role to RMS to finalise the terms of government, who were focused elsewhere. 30-second bus trip or a 7-minute walk. receiving the project on completion. In the face of Sydney’s continued failure to But as the agencies kept telling us, ‘it’s Billbergia’s approach to the VPA meet state housing targets by more than half, never been done before, so it can’t happen…’ negotiations for value sharing was one of collaboration, as with many innovative public/private partnering projects in other jurisdictions. However, not all government agencies embrace innovation equally. To suggest that flexibility is not some agencies’ strength is a profound understatement. Their officials’ need for conformity to precedent is born of a bureaucratic history that only trusts in previous successful methods of project delivery—think of that line in Baz Luhrmann’s movie Strictly Ballroom: ‘no new steps!’… However, the good news is that the deal got done, and the project is a great success, despite the painful learning curve. And in five years from now when the additional Figure 1: Bennelong Bridge with new residential construction (Wheeler Studios, May 2016) homes have been delivered, the private 14 | MARCH 2017 | newplanner FEATURE article
Figure 2: Aerial View: Wentworth Point, Rhodes and Bennelong Bridge (Billbergia, 2016) landowners will know if they have earned infrastructure, to ensure that growing slow to take up the task of pursuing the their money back through the sales of the communities have access to essential obvious benefits. And trying to do a one-off additional housing stock. facilities early in the development cycle. deal demonstrates the need for a successful Community centres, libraries, parklands, precedent or template to follow. In the meantime, RMS and the two sports centres, child care centres and communities have received a $63 million even a 20-year free community shuttle bus As a public sector initiative, state asset at zero cost, and RMS have also received services have or will become zero-cost governments seem attracted to the idea, an upfront cash contribution to maintain the community and council assets with a value but terrified to adopt and announce bridge for the first 40 years of its life. over $200 million. In exchange for providing a particular model for value capture/ sharing, fearing potential backlash from The two communities are now connected, this social infrastructure, the developer property industry groups to punish them for the buses are running (TfNSW will shortly receives increased floor space allowances attempted larceny or ‘value theft’. double the existing services, such has been on a value sharing formula, which in the positive response to the bridge), and turn permits additional housing stock to Also, never overlook the interests of State thousands of pedestrians and cyclists use the improve affordability. Further VPAs are Treasury officials who desperately cling also being negotiated to provide affordable bridge for local trips as an alternative to the to the concept that any funds generated housing for essential workers in Rhodes private car. Cars are banned on the bridge. As by value capture must go to consolidated and Wentworth Point. a ‘walkable community’, Rhodes/Wentworth revenue and run the policy gauntlet to Point will, by 2023, be a new ‘city-within- The fundamental premise of all of these see where they might be spent—treasury a-city’. 50,000 people will live within a 1km ‘value sharing’ examples is that the officials everywhere hate hypothecation. radius of the centre of the bridge, more than revenue generated from each deal must be half the area is water, and more than 35% of hypothecated to the funding and delivery For NSW, analysing how to take advantage the land is open space and parklands. of the specific project—not consolidated of innovation for public benefit, my revenue. They are all private-sector initiated recommendation has always been ‘when in Value sharing via VPAs with local with specific public sector benefits. doubt, try something’. councils—including Canada Bay, Auburn and Parramatta—has also been utilised Without a pre-existing structure for ‘value A pilot project just might unlock a funding by Billbergia to provide other social capture/sharing’, state governments are formula for equitably sharing the values created by transformational transport and affordable housing projects – just like Bennelong Bridge unlocked the development potential of Rhodes and Wentworth Point. Affordable housing and local transport projects are two of the new cabinet’s policy priorities—collaboration with industry can deliver both n Rick Graf has delivered major public and private projects in the USA, Hong Kong, Singapore and throughout Australia over the past 40 years, earning numerous international awards. For six years he represented the four Wentworth Point Landowners in the development and Figure 3: Bennelong Bridge – view to Rhodes (Wheeler Studios, May 2016) delivery of Bennelong Bridge. newplanner | MARCH 2017 | 15 HEALTHY BUILT ENVIRONMENTS
Health infrastructure is what planners do Susan Thompson FPIA CPP, Professor in Planning, Associate Director (City Wellbeing), City Futures Research Centre, UNSW Sydney and 2015 Sidney Luker Medallist Peter McCue, Director Sport Development, NSW Office of Sport
When we think about health infrastructure we generally focus on involving students from the built environment and health. They research different aspects hospitals, and medical centres – the facilities that are essential for of the GreenWay, experiencing complex, getting us through illness and accidents, making us well again. It’s real-world, urban sustainability and health somewhat ironic that the major focus of the ‘health’ sector is sick issues in holistic and integrated ways. Over care, rather than preventing illness in the first place. the last few years, students have put a raft of different issues under the microscope, making recommendations about light rail accessibility, pedestrian safety, disabled o it’s not too much of a stretch to four adjoining local councils, bringing local access, lighting, and shared walking and declare that what many planners do government professionals from disparate cycling paths. The projects are presented to is health infrastructure! Providing disciplinary backgrounds together to work GreenWay council officers and accompanying the spaces and places that collaboratively with the community and posters displayed at the annual GreenWay S 2 support good health and wellbeing as part intermittently, State Government. The Art Exhibition. of everyday life. This is the infrastructure GreenWay is still a work in progress expected that helps to keep people physically active, to be completed in the next four years. Although an example of urban infrastructure, socially connected to each other, and able The further 3.2 kilometres will be financed many of the features of the GreenWay and to access fresh, nutritious and culturally using $20 million of funding committed by the activities that occur along its length and appropriate food in environmentally local and State Governments. The green immediate vicinity have relevance for regional sustainable ways. As regular readers of corridor follows the route of Sydney’s newest locations. The GreenWay demonstrates our column are well aware, such behaviour completed light rail service from Rozelle how green corridors, with shared cycling builds the foundations for good health, to Dulwich Hill (converted from the former and walking paths, can encourage much 5 reducing the risk factors for the chronic freight rail line)3, integrating cycling, walking more than just physical activity. Community diseases that plague modern society. and public transport. It is a significant members from different generations, socio- community hub for the arts and bushcare, economic backgrounds and cultures are To begin our column for this year on a and is connected by significant recreational connected in a sustainable environmental positive and inspiring note, we present facilities including outdoor gyms, sporting setting, which is supportive of their physical the GreenWay – a fabulous piece of fields, children’s playgrounds, a dog park and mental health. green infrastructure for healthy and with café, and picnic areas. environmentally sustainable living. Recently We are honoured to be writing the Healthy identified in the Central Sydney District Plan The GreenWay serves as a local outdoor Built Environments column for the eighth as the number one priority for Sydney’s classroom modelling urban sustainability for year in a row! In 2017 our focus will be on Green Grid1 the GreenWay connects two school and university students. An extensive case studies of good practice for healthy built of Sydney’s most important waterways – educational program of resources, developed environments – we want to explore this in both the Parramatta and Cooks Rivers – via a for primary schools, is now recommended urban and regional settings and we need your 5km light rail, active transport and urban as best practice for geography studies by help. Please send case study suggestions (big environmental corridor in the city’s Inner the NSW Department of Education.4 UNSW and small, associated with practical actions, West. It was originally an initiative involving and UTS run multi-disciplinary classes professional and community sponsored, as well as policy related initiatives). We are especially interested in less well-resourced areas to see what is occurring there – examples of creative and innovative practice to inspire others! n Endnotes 1 See: http://www.greater.sydney/central-district 2 See: http://www.greenway.org.au/ 3 See: http://sydneylightrail.transport.nsw.gov.au/ 4 See: http://www.greenway.org.au/arts-and- community/schools 5 See: http://www.thenatureofcities. com/2014/10/05/do-urban-green-corridors- work-it-depends-on-what-we-want-them-to- do-what-ecological-andor-social-functions- The GreenWay comprises different types of shared paths – this one is part of a former can-we-realistically-expect-green-corridors- road bridge (Source: Author) to-perform-in-cities-what-attributes-defi/ 16 | MARCH 2017 | newplanner FEATUREREVIEW
REGIONAL PLANNING The importance of a governance framework & education
Karen Forsyth, Development Contributions Officer, Port Stephens Council
Developer Contributions are an essential tool used by infrastructure project officers. In response, we established a clear process for DA government to fund infrastructure. As with any tool, its referrals to the Contributions Officer and effectiveness is dependent upon an understanding of the the introduction of a process for managing context (i.e. legislative framework) and the knowledge of its S94 referrals when the Contributions users (i.e. education). Officer is on leave. In addition, fact sheets were prepared to assist staff and provide explanations of hortly after accepting the role of The internal working team went part the differences between Section 94 and Development Contributions Officer of the way to the effective delivery 94A plans. Reporting mechanisms were at Port Stephens Council in 2013, of the Port Stephens Development developed in order to inform the Section Sit became apparent to me that Contributions Plan, however, gaps still 94 team and management in relation to the Section 94 Plan in itself was only as existed. As a consequence, I initiated current and projected income and the effective as the governance framework that the implementation of a governance DA referral system. Registers were also it operated within and the knowledge of the framework. This was achieved by created to track funding approvals and any users. The intent of the Plan was not being undertaking the following actions: S.94 Plan amendments in order to provide achieved within the existing governance an easy way to access specific information. Roadmaps framework and the Plan and legislative Governance context was not clearly understood by users. It was clear that there was a need for process improvement, so attention was given to what Following the finalisation of the Internal working team aspects of the Plan were working, what was framework, an Interactive Internal Tool Council had previously established an not working and why. A framework was was developed that allows staff to easily internal working team, which included then developed to identify targets to assist access all the relevant documentation in the General Manager, Group Managers, management in understanding the role one place. This tool provides staff with a the Development Contributions Officer of developer contributions. These targets link to legislation, regulations, Council’s and members of the Strategic Planning, included the implementation of Roadmaps, Section 94 plans, management directives, Facilities and Services and Finance teams. which identify a program of works/projects, planning agreements and governance The ‘S94 Team’ meets on a monthly basis who is managing them and the timeframe for framework. and is responsible for tasks such as: completion. Education • Ensuring that the S94 Plan complies Process improvement The final stage of the process with the legislative framework; It became clear that there was a lack improvement was to undertake education • Determining requests for funding; of clear and precise processes for the and training sessions for all staff members • Providing technical input, process application of the S94 Plan, in particularly who utilise Developer Contributions in improvements and governance of funding. by development assessment officers and their daily work. The development of the framework has closed identified gaps in the process and has provided Councillors, the Organisation and the Community with a greater understanding of the important role developer contributions play in funding infrastructure n Karen Forsyth has worked in local government for the past 6 years and previously worked in the legal sector for 18 years. Ensuring people understand Developer Contributions through the governance framework continues to motivate Karen to ensure Developer Contributions are delivered in accordance Birubi Surf Club, Anna Bay NSW with the required legislation and regulations. newplanner | MARCH 2017 | 17 FEATURE ARTICLE Value sharing for affordable housing
Bill Randolph MPIA, Director, City Futures Research Centre, UNSW
The recent insertion of Inclusionary Zoning in the draft as affordable housing (i.e. priced below market) is simply another way of ensuring District Pans for Metropolitan Sydney marks a turning point in that part of the value gain achieved debates—and hopefully policies—on the possibility of accessing through rezoning is used to support lower some of the value generated by property development to cost housing outcomes. generate new affordable housing in New South Wales. However, the emergence of IZ for affordable housing as a further possible value sharing component raises additional issues. Not surprisingly, development o date, several Sydney councils though a spot rezoning or simply by being industry lobby groups have hit back have adopted or are actively in the right place at the right time. As a claiming that IZ will impact on housing considering adopting firm result, a remorseless process of up-zoning costs and supply.2 But they are willing inclusionary zoning (IZ) targets for is reconfiguring our urban space and, in T to negotiate: ‘We’ll sign up for IZ, but the process, creating substantial value. affordable housing in their local planning only if you give us additional density to In addition, major new public investment arrangements. The Inner West Council’s compensate’ is their response. In other in infrastructure can also generate draft Affordable Housing Policy, released words, if you want affordable housing, you substantial financial benefit for land in December 2016, incudes a well-argued are going to have to provide more value owners through better accessibility and 15 – 30% IZ target for new residential uplift to pay for it. development1. This beats the draft District amenity. The key issues are, therefore, how much Plans’ proposed 5-10% IZ target range by The question that arises from this is a value is created, how much should be some margin. simple one: given that this value is created fairly shared between public and private by the decision of a public planning IZ is, in reality, just another form of value stakeholders, and whether affordable authority or from public investment, capture—or ‘value sharing’, as the more housing should be included in the shouldn’t some of that value accrue to the sanitised version of the process is now calculation. being termed. public purse? Of course, value sharing in one form or another has been around for Taking this last issue first, in fact, there’s Developers have been fully attuned to many years: land taxes and rates, Section a very good and longstanding case for the process of value uplift for decades, 94 development contributions, special affordable housing to be seen as key of course. The stroke of a pen from development levies and voluntary planning economic infrastructure. As such, it a planning authority can result in an agreements are all forms of value sharing. should be treated in the same way as the immediate substantial private gain by any The requirement for a developer to factor other infrastructure that benefit from land owner. These changes can be effected in a proportion of a new development value sharing mechanisms. The housing
18 | MARCH 2017 | newplanner FEATURE . AHURI Housing Draft Affordable | MARCH 2017 | 19 | MARCH 2017 | 19 Proposed levies in Homes for Londoners: http://www.yoursayinnerwest. http://www.yoursayinnerwest. planner new Media Release, 21 November 2016. 21 November Media Release, joined UNSW in August 2004, setting Inner West Council 2016, Inner West L., R., Crommelin, den Nouwelant, Van of London 2016, Mayor Metro Sydney Plan could increase housing affordability, central city economic productivity
costs. Housing Policy. Draft Affordable Housing and Viability and the lower income labour market. Urban Task Force 2016, Force Urban Task
com.au/affordable-housing-policy-on-public- 20/12/2016. Accessed exhibition. Supplementary Planning Guidance 2016 Final Report No. 261. Melbourne: AHURI. Greater London Assembly. London Assembly. Greater Herath, S. and Randolph, B. 2016, Herath,
and private sectors . academic, government, non-government housing and urban policy issues in the 40 years’ experience as a researcher on academic urban research group. Bill has 2005. The Centre is Australia’s leading up the City Futures Research Centre in 2 3 4 Endnotes Endnotes 1 an approach needs to be incorporated in be incorporated needs to an approach a fair allow Plans to District the revised through generated of the value proportion be to approval of development the granting infrastructure public essential for retained housing is a of which affordable provision, component. key created Capturing some of the value for IZ provisions mandatory through both housing is therefore affordable can all we While feasible. and justifiable sharing is not a ‘magic that value agree a rich pudding pudding’, it is nevertheless n distribution equitable that needs more Bill This 4 subsidy—i.e. without proposes that all new developments need developments that all new proposes ‘genuinely 35% achieve they how show to homes affordable’ derived entirely through a value sharing a value through entirely derived get a speedy do, they If they arrangement. of valuation decision. If not, then a team the developers’ over tease will experts really see if they to assessments feasibility amount the required provide to afford can’t if are homes. The chances of affordable rejected. will be the proposal can’t, they the heart of the goes to This approach The debate sharing argument. value pay developers should be about the price build on, and how want to they the land for uplift is deemed much of the resulting rather than about profit, ‘reasonable’ enacted, Once density. demanding more to down land prices force IZ will act to needed leeway the feasibility provide homes. Moreover, the affordable for expose to should be required developers public scrutiny if they to their feasibilities ensure to planning approval obtain want to of understanding is a transparent there is being delivered much value how just This develop. to the permission through any ensuing negotiation inform would should reasonably what proportion as to housing. Such affordable for be shared growing community backlash against the backlash against community growing get effectively to of developers practices housing the affordable out of providing the new under the London Plan, required Sadiq Khan, has drawn London Mayor, Homes Program. up an Affordable 3 across that city, and spurred on by a that city, and spurred across similar investor fuelled ‘dash to density’ ‘dash to fuelled similar investor practice—and in policy. Faced with a Faced in policy. practice—and example of how this has played out in out this has played of how example fore. London provides a more advanced advanced a more London provides fore. these kinds of issues have come to the to come have these kinds of issues Sydney is not the only place where where place is not the only Sydney needed infrastructure. its role in helping to pay for this much pay for in helping to its role productive city. Value sharing should play Value city. productive of where they live in the city. live they of where and well-functioning a modern, for rents for low-income workers regardless regardless workers low-income for rents infrastructure as essential be considered market imposes unacceptably unaffordable unaffordable imposes unacceptably market housing should Affordable growth. overall to target investors, and the private rental rental and the private investors, target to on drag that act as a productivity of low ignores these people, being more inclined being more these people, ignores areas and indeed may create outcomes price. Yet our housing industry completely completely our housing industry Yet price. sub-optimum labour market to leads homes in the right places at an affordable at an affordable homes in the right places housing simply suburbs with the cheapest of the workforce. They also need decent also need decent They of the workforce. the outer to poor Displacing the working incomes, are now a structural feature feature a structural now are incomes, insecure, part-time and essentially limited limited part-time and essentially insecure, working poor—the ‘precariat’—on low, low, poor—the ‘precariat’—on working of this demand. The growing sector of the sector of this demand. The growing housing waiting list are just a small part just are housing waiting list The 60,000+ households on the NSW public The 60,000+ households on the NSW public either affordable or appropriate housing. or appropriate either affordable on lower incomes who struggle to get into get into to who struggle incomes on lower majority, does not work at all well for those for at all well majority, does not work market, however well it might work for the for it might work well however market, Source: Author NSW YOUNG PLANNERS
Can social infrastructure be cash cows for Local Government?
Yi Ho PIA (Assoc), Strategic Planner - Urban Design, North Sydney Council
Community centres enrich lives and develop harmonious Scenario 2: What else we can do. societies within our cities. Sadly, these facilities are The foundations of innovation and economic growth are largely influenced by expensive for cash strapped Local Governments to collaboration, creativity, and the availability maintain, and as such, investment in these critical or the exchange of information. As such, facilities has been minimal. Are there other ways in which the Federal Government and each of the we can increase investment in these facilities? State Governments have developed policies for which to embrace the technological and social changes happening around the world in order to bring a new era of prosperity to ommunity centres are an important Newer community facilities have seen a Australians. These initiatives include the element of the social infrastructure convergence of previously disassociated National Science and Innovation Agenda, of our cities. They are places programs and functions. For instance, the Innovate NSW, and LaunchVic. Cwhere connections can be made, Docklands Library offers every function an lives enriched, where services can be ordinary library would, but it is by no means These initiatives and the result of their accessed and those who are less fortunate quiet. It is a place where there is the constant products, while largely digitally enabled, are able to feel safe and be supported1. hubbub of conversation and discussion, must be undertaken at physical locations - Social infrastructure, commonly in the where people can mix music and also learn most likely to be located in our larger urban form of community centres are often the how to use the latest technologies such as centres where the value of agglomerated “bread and butter” of Local Government. 3D printing. The trend in developing much economies can be maximised2. Interactions Living in a rapidly evolving world which is more multi purposed and flexible community undertaken at these locations will allow easy undoubtedly fueled by innovation, creativity centres is expected to continue into the future. access to connected services which then and collaboration, as a society, we may need affect the economic development of the area. Funding new community centres not only to look into alternative forms of community Public sector facilitators, developers and requires significant up-front costs (mainly centres which encapsulate yet also provide built environment professionals together funded from section 94 contributions and a complementary function to the existing then play a crucial role in the creation of the rate base), these facilities also require types. I will explore two scenarios: one which the built environment and subsequently, ongoing maintenance, programmatic and HR depicts the status quo for the provision of innovation and economic development. costs. For cash strapped local governments, community centres, and another which apart from a mandate to provide these considers community facilities in a different What if we can rethink the role of community facilities, there is little opportunity to find yet complementary manner. centres so that they do not only serve as additional capacity to fund new ones. gathering places for local community Scenario 1: What we currently do. Community facilities are proud places where residents can gather, access services, connect over topics which interest them and develop their hobbies. They are also places where those who are disadvantaged, less fortunate and those from culturally and linguistically diverse communities can be engaged and integrated into society. These facilities are commonly operated by State and Local Government. For the purposes of this conversation let us focus on facilities operated by Local Government. These community centres are generally located in our urban centres but are also commonly found in our suburbs. Many of these facilities are in need of an upgrade or expansion to meeting the demands from changes in how our society operates as well as population growth. Figure 1:Docklands Library (Source: Yi Ho, 2016) 20 | MARCH 2017 | newplanner REVIEW | MARCH 2017 | 21 | MARCH 2017 | 21 planner new is a Strategic Planner - Urban Designer RDSA Regional Infrastructure Summit 2013, Summit RDSA Regional Infrastructure and in local of social infrastructure Role 2013, SGS development economic regional and Planning, Economics E 2012, The new Moretti, Australia Sydney, Mifflin Harcourt, Houghton of jobs, geography York. New enefit in the provision of a communityof a enefit in the provision
changing environment. and being agile, particularly in our ever “designing” solutions through collaboration Yi believes in challenging the status quo and in Architecture and Business Administration. at North Sydney Council with a background Endnotes 1 2 b space of a co-working in the form centre for the area effects on flow the potential are which Businesses in which it is located. spaces in co-working found commonly are industries) and creative ICT digital, (generally on the local a higher multiplier effect have jobs will be additional where economy, businesses support the growing to created The spaces. within the co-working from part of the local form can effects roll-on stream income existing area’s government out even roll then be used to which can of the local the rest to infrastructure more area government build on then, an opportunity to Is there infrastructure facility community existing economic for the potential maximise to our cities? n for development Yi Ho programs offered on site and for a slightly and for on site offered programs create They audience. target different those who integrate enrich lives, connections, and improve communities diverse from are disadvantaged. of those who are the lives spaces co-working Government, Local For Local be a win-win opportunity. can Planning Voluntary leverage can Government as in such facilities, deliver to Agreements 2 and 3 Precincts of St Leonards the case co-working In the study, Planning Study. been identified as a suitable have spaces Centre for St Leonards type of public benefit at by developers be provided which is to uplift has been given. where locations in the see value to beginning are Developers in the form centres of community provision the potential due to spaces of co-working into overflowing businesses of the growing within the tenancies the other commercial in the future. development specialist be run by can centres Co-working can and desks/spaces party providers third stable a relatively provide out to be rented Local area. government the local for return in the provision which invest Governments themselves also brand of such a facility participants in the economic as active will These facilities of the area. development up-skilling and potential knowledge provide also provide can They populace. the local for to individuals looking for courses ‘taster’ the biggest Perhaps their career. select as a community centre, only with different with different only centre, as a community Co-working spaces serve the same purpose serve spaces Co-working co-working space! co-working research leaders? Sound familiar? Yes! It is a Yes! Sound familiar? leaders? research where people can mingle with industry and with industry mingle can people where there were designated networking sessions networking designated were there technology and digital innovations? What if innovations? and digital technology these places provided courses on the latest courses provided these places and collaborative work spaces? What if spaces? work and collaborative gathering, multi-purposed meeting rooms, gathering, multi-purposed meeting rooms, facilities provided places of impromptu of impromptu places provided facilities which are provided on site. What if these on site. provided which are of the community centres and the programs and the programs centres of the community What would be different is the target market market is the target be different What would and exchange and transfer of knowledge. of knowledge. and transfer and exchange still the same: encouragement of interaction same: encouragement the still ingredients to achieve those objectives are are those objectives achieve to ingredients on effects at the same time. The baseon effects positive cashflows with significant flow- with significant cashflows positive and economic growth. They can produce produce can They growth. and economic can indeed be hubs for creativity, innovation innovation creativity, indeed be hubs for can shifting social needs. Community centres, shifting social needs. Community centres, will need to evolve to cater for continuously continuously for cater to evolve will need to of hybrid library based community centres centres based community of hybrid library As our world increasingly digitises, the norm increasingly As our world and who they cater for needs to change. needs to for cater and who they think about the ways community centre work centre think about the ways community on accelerating economic growth. The way we growth. economic on accelerating community building, having a direct impact direct building, having a community case of community centres can go far beyond go far can centres of community case of social infrastructure, particularly in the particularly of social infrastructure, level or hobby based education? The effects or hobby based education? level associations, or places which only offer basic offer which only or places associations, Figure 2: Fishburners (Source: Fishburners, 2016) Fishburners, 2: Fishburners (Source: Figure
FEATURE ARTICLE Funding affordable rental housing What are the options?
Elle Clouston MPIA, Senior Consultant, HillPDA
Across Federal, State and Local Government, affordable of inclusionary zoning. A target of between 5% - 10% of new floor space would be housing has become a priority on the policy agenda. Effective applied at rezoning stage so that it can be mechanisms for funding affordable housing are still being factored into the development equation. investigated; however, it is becoming increasingly evident that Special infrastructure contribution (SIC) the answer to affordable housing funding needs to be a multi- The SIC levy is implemented by the State layered and collaborative approach. Government under the EP&A Act. The SIC has traditionally been implemented to help fund infrastructure in growth areas. Various he provision of affordable housing opinion on how best to deliver affordable Councils however, are currently exploring has been a long standing challenge housing and what mechanisms should the possibility of leveraging the SIC to fund across Sydney, with the market be utilised. Figure 2 highlights available affordable housing in urban renewal areas. outpacing many purchasers and funding mechanisms that may assist in the T Contributions under the SIC can be in the the rental market becoming increasingly delivery of affordable housing, with these form of monetary or in-kind. Monetary unaffordable. Increased development various mechanisms outlined below. contributions collected would finance demand in infill areas is producing upwards Inclusionary zoning – bonus density various infrastructure projects, with pressure on property values, consequently only part of the contribution directed to pricing low to moderate income households The bonus density provision enables affordable housing. To achieve a greater out of inner city locations. As seen in Figure development to gain additional floor space number of affordable housing outcomes, 1, affordable housing needs to be considered in return for affordable housing. This in Councils should instead encourage the SIC across the full housing continuum, with more practicality, shares the cost of affordable mechanism to be geared towards dwelling innovative financing mechanisms required to housing between the public and private in-kind contributions. support private rental and eventually home sector. The basis of inclusionary zoning ownership. is that land undergoing urban renewal SEPP70 – Affordable Housing would increase in value as a result of SEPP70 offers a mechanism to specific To date, existing provision has struggled to its rezoning and public investment in councils that enables an affordable housing address the growing demand for affordable infrastructure. This mechanism has been contribution to be assigned to developments. housing. Public funding is limited and recently encouraged by the Greater Sydney At present, the City of Sydney, Willoughby the private sector cannot be expected to Commission (GSC) in the District Plans. carry the full burden of affordable housing City Council and the former Leichhardt delivery. Across Federal, State and Local The draft District Plans incorporate Council are the only LGAs listed in SEPP70 Government, there has been a range of affordable rental housing targets as a form as areas in need of affordable housing. Amendments of the EP&A Act to permit the expansion of the SEPP to other LGAs would enable greater application, funding and delivery of affordable housing. Voluntary planning agreement (VPA) A VPA is permitted under s93F of the EPAA and is an agreement entered into between a developer and consent authority either at rezoning or development application stage to procure public benefit, including affordable housing. Additional floorspace is usually granted in return for the public benefit; however the proposal must have planning merit. This approach, while effective, can be ad hoc and opportunistic. It provides limited certainty for affordable housing outcomes and can have the perception that the developer is able to ‘buy’ development uplift Figure 1: Affordable housing on the housing continuum (Source: HillPDA 2017) in return for public benefit.
FEATURE
Section 94 Contributions Conclusion Section 94 contributions are well known Achieving affordable housing targets will by the development industry, however require various levels of reform, subsidy the cap prevents funding to be drawn and support. It is the innovative layering upon for the provision of affordable and consistent application of these housing. If the cap was lifted, Section 94 mechanisms that is required. Future would be an easy mechanism to adapt Local Government housing strategies for the provision of affordable housing should provide clear housing targets and funding. The Greater Sydney Commission incorporate effective guidance around is currently exploring options around contribution mechanisms. This however section 94 contributions and the needs to be supported by a strong policy possibility of lifting the cap. direction from State Government. Work that HillPDA has undertaken has demonstrated Federal grant – National Rental that affordable housing targets need to be Affordability Scheme (NRAS) realistic and supported by robust feasibility In 2008 the Federal Government released testing. The introduction of any affordable the NRAS with the aim to increase the housing contribution needs to be known supply of new affordable rental housing by Figure 2: Funding mechanisms – a Federal, State upfront to afford developers the opportunity and Local Government responsibility (Source: to factor in any additional development providing an annual financial incentive for HillPDA 2017) up to 10 years.1 costs. Ultimately, the best outcome will be achieved by innovatively layering affordable NRAS was made available to 137 housing housing market2. GST exemptions would housing mechanisms, including incentives providers in the form of tax credits (or cash see savings on the cost of construction and subsidies, across Federal, State and if not-for –profit) to build and rent dwelling for many affordable housing developers, Local Government to incentivise private to means tested affordable housing enabling funds to be redirected into investment in affordable housing n tenants. Despite its success in delivering financing more projects.3 up to 38,000 NRAS properties, the program Elle Clouston is a Senior Consultant at Bond finance HillPDA. Elle specialises in strategic was discontinued in 2014. In order to attract larger investment planning with a particular interest in Tax incentives in affordable housing, the Federal planning policy, affordable housing, urban There are numerous tax related incentives Government has been exploring renewal and property portfolio advisory. that could assist in attracting investors to opportunities to enable super funds and Endnotes fund affordable housing. These include: private investment to invest in affordable 1 See: https://www.dss.gov.au/our- • targeted land tax and stamp duty housing nationally. Last year saw the responsibilities/housing-support/programmes- release of the Australian Governments’ services/national-rental-affordability-scheme concessions to investors and housing 2 Berry, M., Whitehead, C., Williams, P., Yates, J. providers; Affordable Housing Working Group: (2004) Financing affordable housing: a critical comparative review of the United Kingdom • tax credits for equity investment in low Issues Paper in January 2016Environmental and consequently the recommendation to and Australia, AHURI Final Report No. 72, income rental housing development; Australian Housing and Urban Research and proceed with the design of theResources bond Institute Limited, Melbourne, https://www. aggregator model in DecemberEnvironmental 2016. ahuri.edu.au/research/final-reports/72. 3 • GST exemptions of construction Under the supervision of a specialist NSW Federation of Housing Association inc. components used in developing Management2009, Submission to the Commonwealth financing intermediary, theResources model would Government’s review of Australia’s Future Tax affordable housing. allow housing providers to aggregate System, NSW, Australia The tax credits scheme for low income their debt financing requirements,ManagementERM is one of4 theLawson, world’s J., Milligan, leading V. and Yates, providers J. (2012) of HousingEnvironmental Supply Bonds—a suitable instrument rental housing, incentivises dwellingsEnvironmental therefore assisting in obtainingenvironmental, funding to social channel andinvestment planning towards affordable consulting being rented under long term leases and at a better price and longerERMservices. tenure is than one We of have thehousing over Resources world’s in 100Australia? off leading ices, AHURI in providers Final40 countries Report No. of consequently encourages more private what would be normally be available to 188, Australian Housing and Urban Research environmental,and employ over socialInstitute 3,000 Limited, and staff. planningMelbourne, In NSW, http://www.ahuri. consulting our key investment to flow into the affordableResources individuals.4 services.planning Wecontacts haveedu.au/research/final-reports/188. over Managementare: 100 off ices in 40 countries Management and employ over 3,000 staff. In NSW, our key planning contacts ERMare: is one of the world’s leading providers of ERM is one of theEnvironmental world’s leading providerswww.erm.com of environmental, social and planning consulting environmental, social and planning consulting services. We have over 100 off ices in 40 countries services. We have Resourcesover 100 off ices in 40 countrieswww.erm.com and employ over 3,000 staff. In NSW, our key Sydney T: 02 8584 8888 and employ overManagement 3,000 staff. In NSW, our key planning contacts are: Environmentalplanning contacts are: Environmental SydneyNewcastle T:T: 02 02 8584 4903 8888 5500 Resources ERM is one of the world’s leading providers www.erm.com of Resources NewcastleNorth Coast T:T: 02 02 4903 6584 5500 7155 www.erm.comenvironmental, social and planning consulting ManagementManagement services. We have over 100 off ices in 40 countries NorthCanberra Coast T:T: 02 02 6584 6253 7155 6888 and employ over 3,000 staff. InSydney NSW, our key T: 02 8584 8888 ERMERM is is one one of of the the world’s world’sSydney leading leading providers providersplanning of of contacts T:are: 02 8584 8888 Canberra Newcastle T: 02 6253 6888 T: 02 4903 5500 environmental,environmental, social social and and planning planning consulting consulting services. We have over 100 Newcastleoff ices in 40 countries T: 02 4903 5500 services. We have over 100 off ices in 40 countries North Coast T: 02 6584 7155 and employ over 3,000 staff. In NSW, our key and employ over 3,000 staff.North In Coast NSW, our key www.erm.comT: 02 6584 7155 planningplanning contactscontacts are:are: Canberra T: 02 6253 6888 www.erm.comThe World’s Leading Sustainability Consultancy Canberra Sydney T: 02 6253 6888 T: 02 8584 8888 www.erm.comThe World’s Leading Sustainability new plannerConsultancy | MARCH 2017 | 23 www.erm.comwww.erm.com Newcastle T: 02 4903 5500
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www.erm.comwww.erm.comTheThe World’sWorld’s LeadingLeading SustainabilitySustainability ConsultancyConsultancy FEATURE ARTICLE A fairer way of delivering local infrastructure in the new Sydney
Greg New BTP RPIA, GLN Planning Pty Ltd
There have been many NSW councils, particularly in Sydney, expensive it is to service greenfield areas with essential infrastructure1. The first that have initiated ‘value capture’ schemes on rezonings and necessary step is a costed and prioritised DAs to help fund local infrastructure. These schemes have infrastructure list. This list can then allow for coincided with planning announcements and decisions that, an adult discussion to take place about what infrastructure is important and why, and how combined with the broader boom in Sydney land prices, have much should developers pay. seen an explosion in the prices being paid for development sites. Here are some of my ideas about the scope of the infrastructure plan: • Priority Growth Area (PGA) coverage; ome Councils have sought to areas is a hugely expensive business. capture 50% of the value uplift Pretending that we can provide the city • Greater Sydney Commission created by favourable zoning of the future within the current capped (GSC) articulates what is essential S decisions to help fund the revenue straightjacket is just plain foolish. infrastructure for renewal areas, to be Council’s infrastructure projects and reviewed every 5 years; We need to reset to an infrastructure funding programs. Councils have used discretionary and delivery system based on the principles • Costs, priorities and timing details all development contributions mechanisms of strategic planning, fair cost, nexus and the detailed; (i.e. VPAs) to capture a portion of the value fair sharing cost of between users. • Benchmarks set for certain costs set by uplift. These value capture payments IPART (e.g. contingencies); are usually on top of payments made by What does a fair and equitable local the developer under the traditional and infrastructure funding scheme look like? • The plan is a ‘live’ document, with mandatory mechanisms such as section 94. major site rezonings automatically The funding of the local infrastructure triggering a review and update of the These ad hoc, largely unregulated that will be generated by development infrastructure plan at the LGA level arrangements* are opportunistic and I argue in Sydney’s urban renewal areas should (or the extra infrastructure needs can are the result of a head-in-the-sand attitude be based on the principles of clarity, instead be dealt with via a VPA); and transparency, balance and certainty. at the State Government level. The capping • Structure plans should not be of traditional revenue sources for local To achieve the principles, the scheme should released until a broad assessment infrastructure – particularly rate capping have 3 essential and interrelated elements: of PGA infrastructure needs, costs (since 1977) and section 94 caps (since A comprehensive infrastructure plan and indicative contribution rates are 2010) – has forced councils to be ‘creative’ determined. and ‘innovative’ in their quest to provide the Too often the debate about value capture increase in infrastructure capacity that is and contributions focuses solely on the A funding and delivery strategy with a mix needed by the ambitious growth plans set contribution rate and the developer’s burden, of sources and mechanisms out by the State Government. rather than what the contributions are for. Urban renewal areas often crossover IPART has made a valuable contribution LGA boundaries, yet local infrastructure But the ad hoc schemes that do not rely on in recent years in clearly showing how an overall infrastructure plan, and attempt contributions are managed by individual to negotiate contributions on a site by site councils. An even bigger issue is that basis, are neither creative or innovative. the extent to which developers should They are tools used to bridge the funding fund infrastructure remains contestable. gap created by the State-imposed revenue Developers will be very reluctant to give any caps on councils. There is fertile ground for ground on the section 94 cap, and there will inequity and corruption to flourish in these be flow-on negative development feasibility effects if the cap was to be removed outright. schemes. They carry at least the perception, Infrastructure Determine if not the reality, that planning decisions plan funding mix These issues aren’t easy to resolve, but the may be bought and sold. Their apparent following ideas, I think, establish the right value only lasts while land values continue direction we need to follow: growing, but they will be seen as a curse • The funding and delivery strategy should when the economic cycle turns south. be at the Priority Growth Area (PGA) Retrofitting local infrastructure like road Contributions plan level, ideally managed by the GSC. The and intersection upgrades, drainage fall-back option is for each council to systems, parks, public domain works and manage its own funding scheme with community buildings in existing urban GSC oversight and IPART guidance; 24 | MARCH 2017 | newplanner FEATURE
• Recognition that infrastructure delivery contributions plan would be prepared. Like in powers to take charge of collected occurs at the site level (through an LEP, this plan would simply implement funds and implement the infrastructure works conditions of consent), at an earlier strategic decisions. This is a schemes where councils fail in their area-wide level (through nexus-based radical but needed departure from current responsibility of timely infrastructure developer contributions), and at an practice where councils go straight to provision. intergenerational level (through PGA- preparing the contributions plan without specific special rates and State grants); first deciding on trade-offs concerning The integrated infrastructure scheme described above would remove the article • A 1:1:1 (contributions : special rates : works priorities and funding mix. uncertainty about how infrastructure grants) relationship can be a starting • PGA level; in a renewal area is funded and point for the funding mix; • Nexus based charges within the delivered. With clear specification of the • Funding mix discussed and developed previously-decided funding mix infrastructure, developers and residents with community; framework; will know what they’re getting and when, • A better understanding of the inputs • Clear guidance on how the fair backed up by a sustainable funding plan that make a development feasible. developer charges were determined; that has been worked through with the My experience is that feasibility is • Clear implementation: I.e. timeframe community n highly reflective of the purchase price of scheme, land affected, development and the speculation appetite of the * It must be said that a few councils have area- affected guidelines, payment based, more transparent schemes that link current owner / developer, rather than mechanisms, phase-in arrangements value capture contributions to bonus floor space infrastructure contributions per se; from old scheme etc.; approvals. Examples are to be found applying • No arbitrary contributions caps. Power to development in the Green Square area, and • Partnership culture – ‘works in kind’ the Macquarie Park corridor. Parramatta City should be given to councils to set (WIK) explicitly encouraged. Guidance on Council is currently developing an area-wide their own mix of revenue sources and how developers can easily participate – scheme for its CBD. developer charges; e.g. WIK credit trading scheme Greg New is a town planning consultant • State Government / GSC to work • VPAs still used to provide more flexible specialising in infrastructure contributions with councils to ensure a reasonable delivery, meet unanticipated demands etc. and planning agreements. He recently lead balance between State and local a team that prepared study that evaluated Conclusion infrastructure charges; value sharing options for development in • Infrastructure plans refined, honed and To complete the loop, it is essential to the Parramatta CBD. reworked to reflect the limited funding track the progress and adjust the scheme realities. over time. Discipline can be achieved by Endnote implementing sunset dates for reviews 1 See the reviews of Blacktown, The Hills and Local infrastructure contributions plan of the infrastructure plan, funding plan Wollongong LGA contributions plans on the IPART website: https://www.ipart.nsw.gov. Once the infrastructure list is refined and and contributions plan. As a trade-off for au/Home/Industries/Local-Government/S94- the funding mix decided, a contributions relaxing or removing revenue caps, the Contributions-Plans/Current-and-completed- plan similar in scope to a section 94 State Government could look at step- assessment-of-plans
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newplanner | MARCH 2017 | 25 FEATURE ARTICLE
Fairness and efficiency in infrastructure funding: a more sustainable value capture model
Adrian Dwyer, Infrastructure Australia
Our population is growing and our economy is changing. Stamp duties also have a distortionary As the Australian Infrastructure Audit1 and the Australian impact on housing markets. As a tax on Infrastructure Plan2 showed, these changes present transactions, a stamp duty can reduce housing market liquidity by increasing challenges for governments. Our infrastructure must barriers and reducing incentives for moving be transformed to support Australians’ needs in the to housing that best meets a household’s 21st century, and we must find a way to pay for this needs. Those looking to downsize or move transformation. out of inner urban areas are discouraged from doing so by the considerable one-off impost. Consequently, stamp duties make it n this search for additional dollars, Mechanisms based on proximity (for harder for those wishing to move closer value capture is often raised as a example, betterment levies) may be to employment opportunities to find solution. Value capture can help inaccurate and unfair. Rather than proximity, appropriate housing, and increase the Ito stretch public funding further it is accessibility that matters most to costs of available properties by restricting to deliver more of the infrastructure locals. And far from a simple measure of supply – in addition to the range of other Australians need. It can also help to make distance from infrastructure, accessibility is factors influencing housing affordability. the infrastructure funding mix fairer, by influenced by many natural and built local For businesses, this reduces the pool of seeking more from those who benefit most and network features, including station talent from which they can hire, since it from new infrastructure, and reducing the entrances and exits, noise or pollution, as limits the eligible part of the workforce burden on other taxpayers. well as the quality and frequency of services within commuting distance of their offices. For first homebuyers, stamp duty As Infrastructure Australia argued in provided by the infrastructure itself. represents another barrier to market entry, a recent reform paper, value capture Mechanisms based on property prices (for on top of fast-rising capital costs, that must presents great opportunities for example, stamp duties, capital gains tax be paid for through savings. governments – however caution is and some betterment levies) are subject 3 required. Governments need to understand to volatile market forces and may provide Overcoming the issues caused by stamp what value capture can and cannot do. unreliable revenue to governments. duties and creating a sustainable source Each mechanism for capturing value A variety of local and wider economic of funding for infrastructure is becoming comes with benefits, risks and challenges factors can influence the impact a project increasingly critical for governments. While for the governments seeking to implement has on local property prices. These pose recent strong property price growth has them, and the communities in which they considerable challenges for forecasting seen burgeoning stamp duty revenues, are used. at a project’s outset, and could lead a weakening property market could Value capture presents clear benefits, but governments to capture more than what substantially reduce the value that could be also comes with risks and challenges is fair or efficient from properties around captured from local properties. Value capture is a powerful tool infrastructure developments, or cause a Australia’s population is ageing, and a for governments to raise funds for shortfall in forecast project revenue. generation of Australians aged between infrastructure. That is why Infrastructure Stamp duties can capture value, but at 55 and 70, the vast majority of whom own Australia have argued for routine what cost? their homes,4 will retire over coming years. consideration of value capture as part of Governments must act now to ensure that Stamp duties, currently levied by all all infrastructure project development housing with access to jobs is affordable state and territory governments across processes. and accessible for younger generations the country are one the most inefficient of workers who will increasingly bear the But value capture cannot simply be about and blunt forms of value capture used burden of supporting the broader population. collecting as much revenue as possible. in Australia. As a one-off charge, stamp Poorly designed or implemented value duties may collect part of any uplift in A broad-based land tax provides an capture runs the risk of taking more than a value from corresponding infrastructure efficient and sustainable approach to fair share, unnecessarily increasing project investments. However, stamp duties are value capture financing and administration costs, or not a true form of value capture because The most efficient approach to capturing introducing inefficiencies in the housing, the charge does not reflect the net uplift value already exists. Land tax applies employment and investment markets. since the property was last sold. across each state and territory except the 26 | MARCH 2017 | newplanner FEATTURE | MARCH 2017 | 27 | MARCH 2017 | 27 tralia’s future tax system: system: tax future tralia’s tralia’s future tax system: system: tax future tralia’s planner new Bur Henry, K. (2009) Aus at: http:// available the Treasurer, Report to taxreview.treasury.gov.au/ Dal Infr Infr Infr Reserv Henry, K. (2009) Aus (2015) Transport Regional Economics uplift, available and land value infrastructure at: https://bitre.gov.au/publications/2015/ is_069.aspx and state growth boosts approach land tax at: https://grattan.edu.au/ budgets, available news/following-the-act-land-tax-approach- boosts-growth-and-state-budgets/ infrastructure audit, available at: http:// audit, available infrastructure infrastructureaustralia.gov.au/policy- publications/publications/Australian- Infrastructure-Audit.aspx at: http:// plan, available infrastructure infrastructureaustralia.gov.au/policy- publications/publications/Australian- Infrastructure-Plan.aspx capture value on making Advice value: at: http:// available in Australia, work infrastructureaustralia.gov.au/policy- publications/publications/Capturing-Value.aspx at: http://www.rba. available rates, ownership gov.au/publications/submissions/housing-and- housing-finance/inquiry-into-home-ownership/ home-ownership-rates.html at: http:// available the Treasurer, Report to taxreview.treasury.gov.au/ and Transport eau ofInfrastructure, ACT the B.(2016)Following J.&Coates, ey, (2015)Australian Australia astructure (2016)Australian Australia astructure (2016)Capturing Australia astructure (2015)Home e BankofAustralia 6 7 8 1 2 3 4 5 Endnotes Endnotes Now is the time for other states to to other states is the time for Now be a role could There get on board. to Government the Australian for and these states to incentives provide a long-term and initiate territories, a broad-based towards transition other beneficiary alongside land tax, The impact and pays funding streams. of this reform burden administrative by broadening be streamlined could and aligning charges state-based cycles. rates payments with property alongside this reform By introducing such of inefficient charges the removal an have duties, governments as stamp raise we how improve opportunity to and other infrastructure funding for pay way to a better and provide services, support needed to the infrastructure for and change n growth Australia’s at Director Adrian Dwyer is Executive with responsibility Australia Infrastructure policy and the organisations lead to on activities – including as lead research Plan. Infrastructure the Australian Adrian has held senior policy and executive with sector in the public and private roles market on infrastructure a particular focus joining Infrastructure Prior to reform. at he was Head of Policy Australia, Australia. Partnerships Infrastructure 7
8 5 and the Henry Tax Review. and the Henry Tax 6 barriers to mobility. mobility. to barriers property market liquidity and reducing reducing liquidity and market property private investment in buildings, improving in buildings, improving investment private while also providing greater incentives for for incentives greater also providing while and stable land tax revenue stream, revenue land tax and stable revenues from duties to a more reliable reliable a more duties to from revenues to reduce the volatility of government of government the volatility reduce to The effect of this reform process has been has been process of this reform The effect Economics, land tax. phasing in a broad-based while Infrastructure, Transport and Regional Transport Infrastructure, taxes, transaction property out residential reform is supported by the Bureau of by the Bureau is supported reform period of phasing a 20-year commenced long-term land-use planning. Land tax land-use planning. Land tax long-term Government In 2012, the ACT the ACT. infrastructure funding sustainability and funding sustainability infrastructure underway in is already This approach affordability, transport network efficiency, network transport affordability, positive impacts on housing availability and impacts on housing availability positive land tax reform are wide-reaching, with wide-reaching, are reform land tax land value uplift. The potential benefits of uplift. The potential land value fairer, more efficient way of capturing efficient way of more fairer, such as stamp duties, could provide a provide duties, could such as stamp value of the land tax base by 60%. of the land tax value of other inefficient charges the removal to This exemption alone reduces the total the total reduces alone This exemption in addition system, the land tax Broadening including on owner-occupied properties. properties. including on owner-occupied system includes significant exemptions, exemptions, includes significant system Northern Territory. However, the present the present However, Northern Territory. Sydney Harbour Bridge (Source: Infrastructure Australia) Infrastructure (Source: Harbour Bridge Sydney FEATURE ARTICLE
Development Contributions, Value Capture and Voluntary Planning Agreements
Patrick Fensham MPIA, Partner and Principal, SGS Economics and Planning
In the recent flurry of reports on value capture (from Development contributions as user charges Infrastructure Victoria, the Commonwealth Government and 1 These are payments required of Infrastructure Australia , amongst others) there has been little developers to help fund planned attempt to distinguish contributions for infrastructure based on infrastructure which will be used by value capture from other types of development contributions. A the development in question. The main greater understanding of the different ‘frames’ of development principle is that developers should contribute according to their expected contributions can also inform a more coherent approach to share of the benefits that come from Voluntary Planning Agreements, which are increasingly used in using the items in question. NSW as a means of capturing the increase in land value created In Queensland, NSW and Victoria, by the granting or promise of additional development rights. approval authorities are required to prepare a Contributions Plan which must identify the area subject to the charges, Types of Development Contributions There are essentially four types of the works that will be charged for and the amount that will be charged per It is important to distinguish between the development contribution: user pays dwelling or equivalent demand unit. In all different forms of development contribution. charges; impact mitigation levies; value these jurisdictions there has been some This is of more than academic significance, capture or value sharing arrangements; slippage from this direct user pays rigour as the principles governing the fairness and and inclusionary requirements. applicability of any given type of contribution with the recent ‘capping’ of charges. Figure 1 highlights the conceptual can vary considerably, with major Development contributions as impact distinction between the types of implications for how such levies should fees be implemented (and their acceptability to development contributions and each is Whereas user charges for infrastructure those responsible for payment). discussed in more detail below. apply to planned infrastructure, impact fees may apply when a development creates unanticipated or unplanned Inclusionary demands on local infrastructure as a User pays requirements Impact Value capture result of its particular design or timing. contributions for off- / development mitigation levies exactions site infrastructure standards The ruling principle for splitting costs (cash in lieu) is the ‘polluter or exacerbator pays’ principle, that is, those who cause the APPORTIONMENT PRINCIPLE cost impact are 100 percent responsible for paying that cost. This would apply even Proponents are if the unplanned additional investments Proponents are responsible for Proponents must required to share in local infrastructure subsequently 100% of the cost meet certain Proponents pay part of the uplift provide opportunities/ benefits for other of making good development according to share in land value developments. Unlike user charges, unanticipated off- standards on site or of usage of planned occasioned by re- side effects, including pay for these to be impact fees cannot, by definition, be pre- infrastructure zoning or granting of infrastructure satisfied off-site. determined. They must be worked out on a a development impacts case by case basis.
EXAMPLE Development contributions as inclusionary requirements Parking Inclusionary requirements are about Make good requirements DCPs for various The Growth Area ensuring that successive developments conditions on and cash in lieu infrastructure items, Infrastructure meet community expectations in relation development schemes Open space including open space Charge approvals requirements and to liveability, efficiency and sustainability. cash in lieu schemes Parking and open space requirements, or their cash-in-lieu equivalents for off-site Figure 1 :Types of development contributions (Source: SGS Economics and Planning, 2016) provision, are examples. 28 | MARCH 2017 | newplanner FEATURE , Using Value Capturing Value Capture – | MARCH 2017 | 29 | MARCH 2017 | 29 is a highly experienced , Discussion Paper, see http:// Paper, , Discussion ealth of Australia (2016) ealth of Australia , see http://infrastructureaustralia. planner new astructure Victoria (2016) Victoria astructure Options, Challenges and Opportunities for Victoria Value: Advice on making value capture work in Capture to Help Deliver Major Land Transport Australia Infrastructure Roles for the Australian ructure Australia (2016) Australia ructure Infrast gov.au/policy-publications/publications/ Capturing-Value.aspx Infr investment.infrastructure.gov.au/whatis/Value- Capture-Discussion-Paper.pdf Government Commonw see http://www.infrastructurevictoria.com.au/sites/ default/files/images/IV18%20Value%20Capture%20 Options_Final%20web_v2.pdf
President’s Award for Planning Excellence. 2015 NSW Planning Institute of Australia Economics and Planning. Pat received the Urban Policy and Governance at SGS Australia. Pat is the National Leader for internationally and in all states of urban planner who has worked 1 Endnotes Endnotes
somewhat akin to the ACT approach. approach. the ACT akin to somewhat privileges the monopoly Recognising of additional the granting to attaching rights such a system development ‘purchase’ to proponents might require floorspace for licences development in planning provided that already above would fees’ The ‘licence instruments. unimproved be based on pre-scheduled types, floorspace different for land values some allow to perhaps ‘discounted’ captured be privately to betterment for incentive is a positive so that there development. used are as VPAs so long However, or sharing in NSW capture value for are such contributions it is important other types of the three from distinguished capture Value contributions. development should be in VPAs based contributions change based on the anticipated explicitly with the above (consistent in land value of the provision arising from approach) rights. n development enhanced Fensham Patrick rents’—is reflected in an increased land in an increased reflected rents’—is other things equal, example, For value. apartment a multi-storey for land approved than otherwise more building will be worth rise a low for land designated equivalent building. industrial 2 highlights some of these Figure zoning and post the pre It shows concepts. values’. ‘development the the site in developing be interested To pay the base to be able has to developer the land, and meet construction for price including a margin costs and development for accounting and risk, after profit for revenues. or rent sale future likely the zone and a change to After including all costs, controls, development and ‘impact mitigation’ any ‘user pays’, contributions, ‘inclusionary’ development will rise expectation, as the profit as well and denser development as a higher value All other things being equal is constructed. also be expected of the land can the value of the special development rise, because to in increase and prospective potential amenities and infrastructure to access of occupiers future to being granted the through that land by the community in land This increase process. development independently wholly is generated value or by the land owner of any investment the profit from (and is separate developer on construction by the developer received outlays). It is reasonable and other cost be of the uplift in value that a share fund public benefits, including to extracted infrastructure. with the struck typically are VPAs provision make to proponent development capture. sharing or value value for Conclusion more and provide be preferable It would and an explicit to if NSW moved certainty capture, of value system comprehensive Figure 2: Value uplift created through rezoning for higher value uses (Source: SGS Economics and Planning, 2016) special opportunities—so-called ‘monopoly ‘monopoly special opportunities—so-called particular land owners. The value of these The value particular land owners. special development opportunities for opportunities for special development However, the rationing of rights also creates of rights also creates the rationing However, restrictions on development rights. on development restrictions for all’ which would result if there were no were if there result which would all’ for appropriate planning, rather than a ‘free than a ‘free planning, rather appropriate allows or understands because it is part of because or understands allows development rights which the community rights which the community development owners. This represents a ‘rationing’ of a ‘rationing’ This represents owners. which are not available to all land to not available which are granted additional development rights development additional granted increased, the land owner is effectively is effectively the land owner increased, rezoned or has its development potential potential or has its development rezoned When a particular parcel of land is When a particular parcel planning agreements Calculating value uplift for voluntary voluntary uplift for value Calculating contributions based on value capture. based on value contributions used to make provision for development development for provision make used to development proponents are increasingly increasingly are proponents development Planning Agreements (VPAs) with (VPAs) Planning Agreements available to local government, Voluntary Voluntary government, local to available in the absence of formal mechanisms of formal in the absence explicitly linked to land value. In NSW, land value. to linked explicitly betterment regimes, though neither is regimes, betterment in NSW are both quasi-value capture or capture both quasi-value in NSW are Victoria and Special Infrastructure Charges Charges and Special Infrastructure Victoria Area Infrastructure Contributions in Infrastructure Area of additional development rights. Growth rights. Growth of additional development of the value uplift following the granting the granting uplift following of the value includes a ‘lease variation charge’ for 75% for charge’ variation includes a ‘lease the ACT where the leasehold land system land system the leasehold where the ACT for in Australian jurisdictions, apart from jurisdictions, apart from in Australian for concept, though is not explicitly provided provided is not explicitly though concept, ‘betterment’ is a well-established planning planning is a well-established ‘betterment’ The idea of levying part of this so-called part of this so-called The idea of levying land use. allows for a higher value or more intensive intensive or more a higher value for allows rezoning or development approval which approval or development rezoning from an infrastructure investment, site site investment, an infrastructure from the unimproved land value that follows that follows land value the unimproved contributions capture part of the uplift in capture contributions ‘Value sharing’ or value capture capture sharing’ or value ‘Value sharing or value capture arrangements capture sharing or value Development contributions as value value as contributions Development PLANNING PERSPECTIVES
National infrastructure
Steve O’Connor FPIA CPP, PIA NSW Board Director, Member NSW Planning & Assessment Commission, Partner KDC Pty Ltd
In the June 2013 edition of New Planner, I wrote an article “As Greater Sydney grows, we need to more efficiently align land use planning and which had quotes from the newly released White Paper on infrastructure investment. This is one of our Planning Reform. One of these quotes from page 7 of the key objectives.” 1 White Paper was “Infrastructure is fundamental to support Further down the same page the following growth, productivity and ultimately our standard of living.” It commitment is made: might be worth reflecting on what has been happening in terms “We will also develop an Annual Infrastructure Priority List for the NSW Government to of national infrastructure spending given the importance of inform decision making on infrastructure infrastructure to the national economy. provision at a State, district and local level.” On infrastructure funding the draft Central District Plan has this to say: Australian infrastructure spending few years and this is before any additional “We will continue to work across government National infrastructure spending between spending to stimulate the US economy as on the amount, mechanism and purpose of 3 1987 and 2014 is shown graphically below. outlined by President Trump . Australia’s value sharing to create a more consistent There was a distinct rise in spending which projected infrastructure spend is therefore approach to capturing value for public began around 2004. As the Figure shows, comparably well below that of the USA. benefit, complementary with other existing public sector spending on engineering The Australian Reserve Bank has been urging mechanisms.” infrastructure such as roads, bridges, the Commonwealth Government to take Conclusion drains, railways and electricity increased advantage of record low interest rates and Since at least 2013 when the White Paper significantly between 2004 and 2010. borrow to build large scale income producing was published, there seems to have been During this period the Global Economic infrastructure. Australia has one of the lowest a realisation by the State Government Crisis (GFC) hit the Australian economy public sector debt ratios in the developed that infrastructure planning and land use and governments responded by injecting world. However, neither side of politics has planning needed to be better aligned. funding in infrastructure provision to shown any appetite for such a proposal. stimulate the economy. The current approach to infrastructure Draft Central District Plan planning and funding being pursued by the Unfortunately, this level of spending has The Greater Sydney Commission (GSC) GSC appears to be to prepare an Annual declined in recent years and has returned to Infrastructure Priority List to inform decision around 1.5% of Gross Domestic Product2 (GDP). released six draft District Plans late in 2016 for public consultation. In order to making and to create a more consistent Australia compared to the USA ascertain what direction infrastructure approach to capturing value for public The USA’s economy is the largest in the planning and funding is headed I have benefit associated with major infrastructure world and about 15 times bigger than the looked at the draft Central District Plan. investment. Australian economy. The USA is planning This Plan has a section on Planning for Land Whether this approach will achieve the 4 to spend about 36 times as much as Use and Infrastructure at page 17 which desired result of better aligning infrastructure Australia on infrastructure over the next commences with the following statement. planning and land use planning, whilst also providing additional funds for infrastructure projects, will be played out over the next few years as the GSC seeks to implement the District Plans. While these reforms do not rely on legislative change (unlike many of the White Paper reforms) the GSC will need to invest heavily in organisational cultural change with partner agencies if the reforms are to be successful n Endnotes 1 Department of Planning 2013, A New Planning System for NSW White Paper, Sydney. 2 Infrastructure Australia 2016, Analysis of ABS data from 2015, Canberra. 3 Andrew Robertson 2016, Donald Trump’s Busi- ness Plan May Put Australia Under Pressure, Business Report for Analysis. 4 Greater Sydney Commission 2016, Draft Central Source: Infrastructure Australia analysis of Australian Bureau of Statistics (2015) data District Plan, Co-Creating a Greater Sydney, Sydney. 30 | MARCH 2017 | newplanner REVIEW
PLANNER TECH
Virtual reality Game or game changer?
Steve Fox, Manager, BIM Consulting
In the architecture, planning, engineering and construction arena, vendors who have collated terrestrial, airborne, and mobile photography and digital technology is firmly established and has positively impacted transitioned it into 3D model geometry. This the way we design, review and deliver projects. Virtual reality or VR ‘reality capture’ survey process provides a surface mesh that is accurate to three as it’s more affectionately known is an emerging digital technology hundred millimetres. A great example of this which claims to transform our professional world even further. is seen in Google Earth Pro where design proposals can be overlayed within the Google Earth landscapes. And as recently as November 2016, Google has released a ost of us have had an immersive Free movement VR parallel 3D landscape in their Google Earth 3D experience, whether it be with When designers create fully virtualised 3D VR application. This opens the door to a new a View-Master, a 3D stereoscopic environments with their 3D modelling tools era where urban designers and architects Mfilm or perhaps even a VR game. we can utilise gaming engine applications with can frame their designs in real world context The games and entertainment industry is appropriate headset apparatus to move around and view it in an immersive VR surrounding. constantly striving to give us a deeper more these virtual environments. Sophisticated The future immersive experience. Other industries applications even allow us to interact with the VR technology will continue to develop and too are rapidly deploying VR technology to objects within the environment. improve the way their products and services designers will continue to model and use are delivered. Developers of VR applications Augmented reality whatever game changing tools they can find are responding to the visual sensibilities Digital enthusiasts aspire to overlay a to validate their designs. The challenge facing planning and regulatory institutions will be of consumers, and anyone that has virtualised 3D environment over the real their ability to keep up with the change and experienced a good VR application knows world. Think of Pokémon Go or Snapchat to show their willingness to accept new VR how realistic it can feel. So what are the viewed through a pair of digital glasses, mediums as valid communication tools. This benefits that VR offers architecture, urban and instead of viewing Pikachu you are is made more difficult because technology design, and planning? experiencing a design proposal. shifts so fast that new products can become Design communication How does it work? redundant within months n Traditional 2D design communication The success of free movement VR is Steve has gained 13 years’ professional with plans and elevations, and artistic dependent on 3D models and the technology experience working as an architect, holding renderings can give us a good picture of a to view them. Designers typically utilise 3D several positions as BIM Manager for multi- design proposal overlayed in the context modelling or Building Information Modelling disciplinary design studios in Sydney and of its surroundings. And while many of us (BIM) in the preparation of their design London. His current role as a digital leader can piece together 2D information, there proposals. 3D survey data in the form of ensures projects are created to a high quality are many of us that have difficulty picturing site terrain and building envelopes is now in the virtual environment, translating to high what a proposal will truly look and feel commercially available from designated quality in the built environment. like. 2D communication fails to deliver a fundamental human sense: a sense of space. So when designers are given an additional tool like VR to communicate their ideas, we all have a better chance to experience and interact with their idea, allowing us to respond in a more meaningful and timely way. What types of VR exist? There are a variety of ways we can experience VR. 360° static position VR A 360° static position photo can be viewed in VR with some basic stereoscopic glasses. So too a 360° image of a design proposal can be viewed with the same glasses. When the two are blended in a 360° photomontage then a very successful experience is created. Figure 1: Image of user immersed in Google Earth VR application (Source: BIM Consulting) newplanner | MARCH 2017 | 31 NATIONAL & INTERNATIONAL NEWS
Snippets
David Winterbottom LFPIA
What’s in a name? There is a fashion in what streets are called. According to the Ancestry family history website, a century ago the most frequent names included the word ‘Church’ and ‘Street’; these days the most popular are ‘Green’ and ‘Close’. And names do matter. A few years ago a survey by statistics expert Dr Geoff Ellis found that homes in roads with risqué names such as The Knob and Cock-A- Dobby sell for around 20% less than similar homes in nearby sensibly-named streets. Paul Burall, TCPA Oct 2016 Trees and pollution Amazon’s pop-up shop City trees, popularly thought to remove pollutants and improve urban life, may also increase the amount of foul air that people media and from passers-by. Milking the diverse shopping experience that is multi- breathe says the National Institute for Health opportunity to exhibit the merits of people- channel retailing. led placemaking, QYP used 600 milk and Care Excellence in new draft guidance Amazon’s Pop-up stores will become an crates, to produce an udderly remarkable for local government to combat air pollution. interactive experience, hoping to alter the street-side oasis. The annual worldwide Leaves and branches slow air currents, course of the retail experience for the user. event saw 24 teams transform parking causing pollutants to settle. They may also Source: Amazon spaces across Brisbane into temporary act as sinks for particulates and chemicals Peter Jones, Daphne Comfort and David public parks and other creative spaces for that may have direct or indirect effects in Hillier TCPA December 2016 air quality. Air quality [under trees] may people to visit and enjoy. Source: Brisbane Transport & well-being deteriorate at street level near vehicles. It is City 16 September 2016 not always true that trees reduce air pollution. Mathew Leman, Queensland Planner, Many transport professionals too often Their effect is dependent on factors including Summer 2016 consider that their objectives have been species, canopy density, time of year and wind Pop-up shops met if a place can be accessed by bus, rail, direction. Ventilation [on streets] will vary walking, cycling and by car, irrespective of The announcement in September 2016 that according to the size, distribution and species convenience or practicality and with little Amazon, the world’s largest e-retailer, is to of tree and their position, thought given to the true accessibility of open a network of some 100 pop-up shops National Institute for Health and Care communities. While economic benefits in shopping malls in the US would certainly Excellence, 2016 remain a key driver in transport scheme seem to suggest that pop-up retailing will appraisal, health benefits should now be The crate wall of parking become a permanent feature within the retail considered much more holistically. Park(ing) Day: it’s not a new phenomenon, mix. In July 2016 eBay announced that it was This is not just about more active travel but with rising pressures on public space, exploring the possibility of opening pop-up leading to a healthier workforce in a it is an important one. Park(ing) Day, which shops within Sainsbury’s stores in the UK physical sense, with less absenteeism due is now in its 11th year, provides people – the rationale was again on linking online to ill-health and hence better productivity, all over the world with the opportunity and physical retailing in a way that gives but also, even more so, about the mental to reclaim a small slice of public space customers an opportunity to experience well-being of employees, residents and (namely on-street car parks) for public products at first hand. communities. The role that transport plays in enjoyment. By transforming car parks In a similar vein, although at a much smaller mental health is very much in the public eye, into public parklets, Brisbane Park(ing) scale, pop-up retailers at street craft with reports on the levels of stress created by Day 2016 aimed to inspire a more vibrant, fayres often showcase their products and lengthy commutes and a national campaign creative and sociable city - a vision which offer customers their website details as a to combat loneliness that has identified the Queensland Young Planners (QYP) central part of their marketing strategy. As transport and mobility as key tools. For the achieved through their park, titled “It’s a growing numbers of customers are looking elderly or housebound, access to transport planner’s game, build your own parklet”. for innovative interactive experiences, so and therefore social and community The intention of QYP’s parklet was to invite pop-up shops may become an increasingly engagement, can make the difference in public input regarding its design, which important in retail marketing strategies. As averting depression. was altered throughout the day, according such, pop-up shops might contribute more Scott Witchalls, Bob Pinkett and Dawn to recommendations canvased on social and more to the seamless and increasingly Wylie, TCPA, November 2016 32 | MARCH 2017 | newplanner NEWS
INDUSTRY NEWS
The inbox
Elle Clouston MPIA, Senior Consultant, HillPDA
It seems like 2017 has begun similarly to how 2016 ended, Urbis also welcomes a number of new starters with Evelyn Fox Koob, Neala busy! At the end of 2016 we saw a rush of plans released Gautam, Nives Matosin and Lucy Barkl by the State government and at the start of 2017 we were joining the Economic and Social Advisory presented with the Planning Reform announcement. Here is team. Mary Knaggs, Senior Consultant and Gavin Patton, Research Assistant on the what else has been happening across the industry. Heritage team and Richard Barry joining the Planning team as a Consultant.
he Planning Reform, announced on also announced a number of promotions Finally, we congratulate Jim Colman on the the 9th January, will see proposed including Nick Bucktin, Oscar Stanish, Ivan release of his new book The House That amendments to the Environmental Ip and Rachael Nesbitt to Associates; Felicia Jack Built – Jack Mundey, Green Bans Hero. Planning and Assessment Act Sugiaman and Edell Jiaze Lu to Senior Urban Bob Carr and Clover Moore launched Jim’s T book on Jack Mundey in September last 1979 to target delays in Development Designers and Matt Kelly to Urban Planner. Application (DA) processing by councils, year at a full-house event at Sydney’s Trades As the Hunter Development Corporation while also enhancing community confidence Hall. – The book was published in August by takes on the expanded role of in the planning system. Other proposed New South Press: see www.housejackbuilt. implementing the 20 year Hunter Regional changes include levelling the playing field com.au for details. Mundey was honoured Plan and co-ordinating the delivery of for the assessment of major projects by by an Honorary Fellowship of PIA in 2002 infrastructure, Michael Cassel has been ending transitional arrangements under ‘for his significant contribution to planning appointed as the new Chief Executive the controversial Part 3A development in Australia’. After the famous green bans to lead the team. The Greater Sydney assessment, with the intent to prevent the of the 1970s, Mundey’s career led to major Commission will also be benefiting misuse of modifications. It will be interesting reforms in planning and heritage law. It’s a from the wisdom of their new recruits, to see how this reform attempt plays out. great read about a great Australian! n Halvard Dalheim, previously Department New Planner is on Linkedin and Twitter. With a new Premier being announced in of Planning and Environment, and Greg We always welcome staff updates, January, also came a new Minster for Woodhams, previously Willoughby Council. Planning. A cabinet reshuffle has seen announcements and other news you HillPDA welcomes Brent Winter, previously Anthony Roberts take over the role from would like to share. Send us an email to at PWC, to further strengthen the the Hon. Rob Stokes, after nearly three [email protected] and follow us companies economic advisory and business very successful years as Minister and on Linkedin and Twitter. case capability and Leslie Stein who Assistant Minister for Planning. will join the team in March as the Senior There have also been a number of big Advisor of Governance and Policy. changes and movements across the industry. Elton Consulting announces that Rob In November 2016, JBA, Planisphere and Bennett, previously at Lend Lease, has Buckley Vann announced that the three joined the team as a Director, along with businesses would merge to become a Cheramie Marsden as an Associate single company offering urban development Director. Sophie Butcher, previously at APP, services through their offices in Sydney, is now working as a Senior Consultant. Melbourne and Brisbane. The merger has Urbis has also had a busy start to the year, been completed and the new company offers announcing a number of new starters and an expanded range of services including promotions. Congratulations to Poppy planning, urban economics, community and Wise who has been promoted to Director of stakeholder engagement and urban design. Economics and Social Advisory, along with The company also announced Michael Rowe Guillermo Umana promoted to Consultant. and Paul Robilliard as new Directors. In the Heritage team, Alexandria Barnier Architectus has announced an expansion, has been promoted to Senior Consultant with a second studio opening at Wynyard. and Alicia Vickers to Consultant. The New starters include Paris Arkinstall, from Planning team has seen a lot of movement NSW Land and Housing Corporation, Katrina with Audrey Chee stepping into an Burley from NSW Department of Planning Associate Director position, Christophe and Environment, Taylar Vernon from Charkos and Meadhbh Nolan promoted to Liverpool Council and Sam Fallon from a Senior Consultants and Naomi Weber and Sydney architectural practice. The company Emma Fitzgerald to Consultants. newplanner | MARCH 2017 | 33 PIA POSITION STATEMENT Voluntary Planning Agreements Achieving a planning benefit
John Brockhoff MPIA, Principal Policy Officer, PIA NSW
Voluntary Planning Agreements (VPAs) are an important or in conjunction with Contributions Plans especially in relation to major development means of allocating the communities’ share of uplift in on sites under single ownership. S93F land value from planning decisions towards the funding formalised the statutory basis for the of infrastructure. PIA has advocated for revised guidelines long-standing practice of negotiating dealing with probity and practice - making it clear that agreements with developers during the development and rezoning process. development rights are not for sale. When instigated at the rezoning stage, VPAs can be used to fund early infrastructure PIA advocates VPA best practice The funds or works are not required to which creates the capacity for new development. This was considered beneficial To ensure that Voluntary Planning have a direct nexus with the proposal but to councils who were not able to allocate Agreements (VPAs) are neither abused should be related. They must achieve an the funds for infrastructure required at that nor overregulated, the Planning Institute outcome other than the facilitation of a period to support new development. of Australia (PIA) has advocated ‘best development and deliver a planning benefit. practice’ principles1 for the fair and effective VPAs are based in land economics. VPAs use of this source of funding for public provide an opportunity for the community The misuse of VPAs does infrastructure and services. The NSW to share in part of the uplift in land not provide certainty for Department of Planning and Environment value accruing to a developer from has responded with a revised draft Planning communities, nor does it infrastructure investment, rezoning or dispel the perception of Circular, Practice Note and Ministerial development approval which allows a 2 Direction. The proposed reforms provide more intense and higher value use of potential for corruption in a basis for continued practice, but some the land. Lindsay Taylor suggests that the planning process. aspects have the potential to limit the scope the ‘unearned’ component of the uplift is of VPAs to capture uplift for community use conceptually community property.3 in funding infrastructure and achieving a “Since their formal introduction in 2005, VPAs planning benefit. VPAs are one of several forms of have delivered public benefits in the form of development contributions which are open space, transport facilities, affordable arguably separate and additive. Wellman housing, sports fields and their embellishment, When instigated at the and Spiller consider that VPA should be community centres and libraries. rezoning stage, VPAs considered distinct from any obligation can be used to fund early for proponents to contribute towards Reasons for reform shared off-site infrastructure (user infrastructure which pays contributions), impact mitigation PIA is concerned that despite the checks and creates the capacity for measures (consent conditions) or other balances prescribed in legislation, VPAs may new development. inclusionary requirements (eg. affordable be used in a manner which is contrary to good housing or parking).4 and transparent planning practice. This could lead to a general discrediting of planning and Evolution of VPAs possibly to more onerous restrictions being “ imposed by State Government as has been the What are VPAs? Prior to the EP&A Act amendments of reaction previously (viz S94 caps). Voluntary Planning Agreements are 2005 which introduced a fixed rate levy, legal documents created under the s94 Contributions Plans had been viewed In infill areas where outdated planning controls Environmental Planning and Assessment by both councils and the development may be in place and land values are higher, Act 1979 (EP&A Act) between developers industry as onerous, rigid and unable to there is a motivation to enter into VPAs to and councils or state agencies for adequately deal with the uncertainties obtain floor space or height uplifts variations the provision of funds or works by the of development - especially in infill using Clause 4.6 of the Standard Instrument developer for infrastructure or other public situations. Developers could not readily Local Environmental Plan. This is creating goods typically negotiated at the time of negotiate for facilities and infrastructure the perception that floor space uplifts could rezoning (Section 93F EP&A Act). VPAs to meet the needs of their proposals. In be ‘bought’ through VPAs notwithstanding the can only happen if a developer voluntarily addition, s94 could only be applied via merits of the proposal. Anecdotal evidence initiates or agrees with the negotiated conditions of development consent. VPAs suggests that it is both possible and probable content of an agreement. became more common as a substitute for that VPAs are being used in this way. 34 | MARCH 2017 | newplanner PIA POSITION STATEMENT
The potential PIA recommends revision of a high standard of probity. PIA is pleased considerations that distort planning that its advocacy is reflected in the renewed infrastructure costs outcomes Practice Notes and a Planning Circular should be predictable The draft Practice Note also proposes new that have been recently exhibited by the so that they can be used considerations requiring Planning Authorities Department of Planning and Environment. to have regard to ‘a developer’s entitlement in early development PIA is seeking the rephrasing of several to a share of development profit’. These feasibility calculations. considerations to ensure the final Practice considerations remove the opportunity for Note contributes to VPAs achieving their councils to justify inclusions exclusively on the balanced objectives in the public interest. basis that they are capturing the community’s “The misuse of VPAs does not provide share of unearned uplift from a change in certainty for communities, nor does it PIA also observes that meeting the standards dispel the perception of potential for development standards. They also seek to set out in the Practice Note would place corruption in the planning process. PIA avoid the perception that developers are being resourcing demands on some councils to recognised the value of the Department’s allocated unjustifiably high costs to achieve improve their VPA policies. The Department 2005 Planning Agreement Practice Note 5 a planning benefit. These considerations should consider offering support and training and strongly advocated for an update are inconsistent with the adopted policy as well as making tools such as the Urban based on best practice principles set out in principles that agreements are voluntary and Feasibility Model available n their 2016 position paper including: are negotiating towards a mutually beneficial outcome in the public interest. Endnotes • Improving the transparency of the 1 Department of Planning and Environment The planning profession should (2016) (See: http://www.planning.nsw.gov. process by publicly exposing the au/Policy-and-Legislation/Infrastructure/ reasons and basis for VPAs using an acknowledge that VPAs remain an Improving-Voluntary-Planning-Agreements). acceptability test - premised on the established means for the community to 2 Taylor, L (2016) Value Capture through overall merit of the proposal rather capture their fair share of the uplift in land Voluntary Planning Agreements Pt 2 (See: value resulting from a decision to change the www.lindsaytaylorlawyers.com.au/in_focus/ than the potential for a financial index.php/2016/06/value-capture-through- outcome. standards for the development of a parcel voluntary-planning-agreements-part-2-key- • Strengthening principles for councils of land . The community are represented by issues-examples-of-some-local-council- their council who are guided to invest their practices/#.V5w3Zfl961s). on the circumstances for entering into 3 Wellman K and Spiller M (2012) Urban VPAs to achieve a planning benefit share in funding or works for infrastructure infrastructure: finance and management, Wiley. linked to the proposal and set out in or services related to the proposal which 4 Wellman K and Spiller M (2012) Urban an adopted plan (integrated with their delivers the public planning benefit. infrastructure: finance and management, Wiley. Contributions Plan and Community 5 Department of Infrastructure Planning and The potential infrastructure costs should Planning processes). Natural Resources (2005) Development be predictable so that they can be used in Contributions Practice Notes July 2005 • Independent planning assessment of early development feasibility calculations. (Planning Agreements). the value and benefit of the agreement A situation where anticipated VPA (and its consistency with Council’s John Brockhoff is Principal Policy Officer at PIA infrastructure costs are not included (on NSW and nationally. He is a strategic planner adopted VPA policy) by an independent the expectation that they may be avoided) panel to highlight: and policy advisor in infrastructure planning could impact feasibility analysis and inflate and governance. John has led the technical o probity; the initial purchase price for land with flow development of Sydney’s Metropolitan Strategy o quantification of the community on effects distorting subsequent feasibility and the NSW Integrating land use and benefit; analysis. transport policy package. o ensuring that the overall project delivers a desired planning Conclusion outcome; and VPAs can be a fair and effective tool to o valuation advice to maintain deliver community benefits where they are transparency. based on accepted planning principles and
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