Fixing town planning laws Identifying the problems and proposing solutions Submission by the Urban Taskforce to the Productivity Commission in response to its issues paper: Performance Benchmarking of Australian Business Regulation: Planning, Zoning and Development Assessments September 2010 Contents Executive Summary .................................................................................................................................................... 5 1. Introduction .......................................................................................................................................................... 10 1.1 This submission focuses on NSW ................................................................................................................... 10 1.2 Allan Fels report: Choice Free Zone ............................................................................................................ 14 1.3 Going Nowhere and Deny Everything reports ......................................................................................... 15 1.4 NSW Government’s own reports ................................................................................................................. 18 1.5 Anti-competitive features of the planning system.................................................................................. 19 2. The objectives of the planning system ............................................................................................................ 26 2.1 The current objectives ................................................................................................................................... 26 2.2 Alternative objectives for the Act ............................................................................................................... 32 2.3 The statutory role of the Minister for Planning ........................................................................................... 34 3. The economic test................................................................................................................................................ 36 3.1 Explaining the economic test ..................................................................................................................... 36 3.2 NSW’s proposed Competition SEPP ............................................................................................................ 39 4. Planning strategies ............................................................................................................................................... 49 4.1 Strategies need to be implemented ......................................................................................................... 49 4.2 Integrated Land Use and Transport planning package ......................................................................... 52 4.3 Draft subregional strategies ......................................................................................................................... 63 5. Prescriptive planning controls ............................................................................................................................ 68 5.1 Plenty of prescription, but little certainty ................................................................................................... 68 5.2 Development control plans ......................................................................................................................... 72 5.3 Too many extraneous polices ...................................................................................................................... 74 5.4 Environmental planning instruments ........................................................................................................... 74 5.5 Limiting development to preserve a centres hierarchy ......................................................................... 82 6. Spot rezoning........................................................................................................................................................ 84 6.1 An excess supply of zoned land should be encouraged ..................................................................... 84 6.2 Spot rezoning processes .............................................................................................................................. 85 7. Development assessment .................................................................................................................................. 88 7.1 Predictability and flexibility ........................................................................................................................... 88 7.2 A lack of support for state and regionally significant projects ............................................................. 89 Fixing town planning laws Page 2 7.3 Presumption in favour of development approval .................................................................................. 90 7.4 Deemed approval for development consents ....................................................................................... 91 7.5 Code assessable development .................................................................................................................. 92 8. Development levies ............................................................................................................................................. 93 8.1 The burden of levies ....................................................................................................................................... 93 8.2 Local council infrastructure charges .......................................................................................................... 94 8.3 State infrastructure contributions ................................................................................................................ 96 9. Competitive neutrality ...................................................................................................................................... 100 9.1 Discrimination against private sector developers ................................................................................ 100 9.2 Discrimination against private sector when setting levies ................................................................... 101 9.3 Discrimination against private landlords and providers of community facilities ............................. 101 9.4 Government-owned property developers ............................................................................................. 102 10. Confiscation of property rights ..................................................................................................................... 103 10.1 Taking land for a public purpose, but giving no compensation ..................................................... 103 10.2 Stealing the existing use rights of landholders ...................................................................................... 104 10.3 Expropriation of private land for commercial development without proper compensation .... 105 10.4 Down-zoning ............................................................................................................................................... 106 10.5 Heritage listings ........................................................................................................................................... 107 11. The response of urban policy-makers to the affordable housing crisis ................................................ 109 11.1 The Affordable Housing SEPP ................................................................................................................... 109 11.2 Making rental housing more affordable ............................................................................................... 110 11.3 Affordable housing levies ........................................................................................................................ 111 11.4 Density bonuses will reduce the supply of housing and increase the costs of home buyers .... 112 11.5 Preferential development rights for non-profits or public authorities .............................................. 113 12. Further information .......................................................................................................................................... 115 Appendix: Case studies ......................................................................................................................................... 116 1. Permissible supermarket within walking distance of public transport refused consent ................... 116 2. Shopping centre approved because it is not a competitive threat.................................................... 117 3. Warring consultants reports on the impact on existing traders ............................................................. 117 4. A supermarket in Wyong – anti-competitive rules fine .......................................................................... 119 5. A bulky goods retail outlet in Warringah Council will compete ........................................................... 120 Fixing town planning laws Page 3 6. A bulky goods outlet, next to an existing shopping centre, will compete with Newcastle CBD ... 121 7. An extension of a fruit and vegetable store ............................................................................................. 123 8. Supermarket in a