PIA NSW Planning Toolbox Seminar: Development Contributions. 22 February 2013 Greg New GLN Planning

Transcription

1 PIA NSW Planning Toolbox Seminar: Development Contributions 22 February 2013 Greg New GLN Planning

2 Preliminaries

3 Scope Setting the scene: What is the job? What does the work site look like? Tools to get the job done Tools and tips for: System managers Plan makers DA planners Consultant planners The way forward

4 Setting the scene

5 What is the job? Facilitate the delivery of infrastructure that is needed to meet development

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9 What tools are available to get the job done? The array of tools available under the EP&A Act Our experience and common sense

10 What does the work site look like? The broader environment: The wheels of housing development in Sydney and NSW slowing seizing up Brownfield and greenfield large sites are becoming scarcer; there is much fragmented land in the areas ring-fenced for growth Infrastructure disinvestment since the 1990s has caught up with us A lack of confidence in governments generally to fix systemic problems We all want urban infrastructure, but we haven t yet finished the argument about who should pay: a phoney debate so far

11 A lot of bosses at this worksite. Dept of Planning & Infrastructure QS / Cost planners Business commentators Minister for Planning Treasury Strategic Planners Engineers MPs Lawyers L&E Court Councillors Facility planners DA Planners UDIA, Property Council, HIA, Urban Taskforce, etc. Infrastructure NSW Developers Contributions Planners Asset managers IPART PAC, JRPPs Council finance managers Land valuers

12 What does the work site look like? It s messy! Uncommenced EP&A Amendment Act 2008 Draft contributions guidelines 2009 (not Government policy) Residential section 94 caps Funding of the gap above the cap remains unresolved Section 94A levies generally restricted to 1% of development cost Special Infrastructure Contributions (SICs) in NW and SW Growth Centres Draft SICs in Lower Hunter, Illawarra

13 What does the work site look like? Standard LEP URA satisfactory arrangements clauses Water & sewer headworks charges in some areas and not others IPART section 94 plan review role; Essential works list Riparian corridors and section 94??? The burgeoning role of accredited certifiers VPAs and WIKAs are widely used Case law: VPAs, developer works, caps, etc. NSW Planning Act contributions scheme, White Paper delays

14 What does the work site look like? For the most part in larger greenfield developments infrastructure planning and delivery is a straightforward programmatic process. But only so many large sites. We need a range of developers for a healthy development industry. We have problems where: there are many stakeholders in the infrastructure outcome developers cannot assume the infrastructure delivery role and, in order for them to do their development, have to entrust resources to councils / Government there are many smaller developers that may be more exposed to economic cycles, run tighter development margins.

15 Redefinition of user pays is underway It s probably the case that: Any developer who bought land in paid too much for it Section 94 contributions plans for greenfield areas in most cases reflect the fair and reasonable costs of providing infrastructure for those areas Developers should not be allowed to burden the general population with the infrastructure costs of their developments Most greenfield land owners expect a price for their land that is fundamentally inconsistent with the economics of developing that land But all of that matters little when we have an industry that is critical to the State economy housing that continues to languish

16 What is the job again? The job is: Not just facilitating infrastructure delivery, but facilitating the whole urban development itself. The development contributions agenda is now about redefining / recalibrating the user pays philosophy which has pervaded our public policy for at least the last 2 decades - so that housing can get moving again.

17 So why do we have a development contributions system? Development contributions and developer charges: are imposed as conditions of development consent to mitigate the impacts of development on public infrastructure are required to address the additional demands on local infrastructure caused by new development are a tool to address the provision of infrastructure where the market will not or cannot provide that infrastructure

18 Why do we have development contributions? X

19 Tools and tips For Contributions System Managers For Contributions Plan Makers For DA Officers For Consultant Planners

20 System managers Best practice contributions systems Tools to address the infrastructure impacts of development

21 System managers The statutory tools (EP&A Act): Developer s works consent conditions (s80a(1)(f)) Section 94 Contributions Section 94A Levies Planning Agreements (s93f) Affordable Housing Contributions (s94f) Special Infrastructure Contributions (s94ef) Provisions of Environmental Planning Instruments One or more of these mechanisms may operate in an LGA

22 System managers Section 80A(1)(f) of EP&A Act: A condition of development consent may be imposed if: it relates to any matter referred to in section 79C(1) of relevance to the development it requires the carrying out of works (whether or not being works on land to which the application relates) relating to any matter referred to in section 79C(1) applicable to the development

23 System managers Must be reasonable? Merit appeal by applicant? Section 94 Section 94A Planning Agreements Statutory restrictions? Residential cap Max. 1% of cost + Directions Need a contributions plan? Need a nexus? Minimal Funds pooling? Funds for recoupment? Scope $, land, postconsent MPB agreements $ only $, land or MPB

24 System managers Evaluate the section 94 option in risk management terms Suit the contributions framework to the development context Consider application of section 94A as a default position, and section 94 were nexus can be reasonably quantified Work with, not against, the good developers go with the grain Floor space bonus schemes don t give up on making this happen Integrate the complying development system Be prepared for unexpected developments Planning agreement policies and procedures, including template VPA

25 System managers Policy and procedures manual

26 Plan makers Understand the commerciality of development Understand the infrastructure dimension of land use plans Make your Community Strategic Plan priorities your contributions plan priorities Contribution requirements set at or before rezoning takes place Targeted and value-adding consultation: interact with developers & learn from their experience in delivering works particularly in release areas Integrate with State infrastructure requirements

27 Plan makers Get the development definitions right, avoid confusing descriptions Be clear about how section 94 will be used to obtain dedication of land free of cost Consider including wriggle room provision to deal with unreasonable conditions Properly wind-up old contributions plans and their funds Align making of plans for new urban areas with the gazettal of the relevant EPI

28 Plan makers Works schedules: Iterative formulation Rigorous, yet pragmatic Priorities, not wish list Regular review of scope and costs Keep it simple, e.g.: Rates schedule Calculation clarity Indexing Nexus arguments Negotiation role in planning agreements

29 DA planners The developer in many cases can and should deliver the infrastructure: A co-operative culture needed Clarity in the use of Section 80A & Section 94 contributions Contributions imposed by a council must be in accordance with a contributions plan Allowing for existing demands: section 94 demand credit policy should be in contributions plan There are implementation issues with section 94A levies

30 DA planners Conditions: Certainty about the amount and when it is to be paid Specify the infrastructure and relevant contributions plans Managing implications of the residential section 94 cap Assist the development industry require payments as late as possible Clear requirements for accredited certifiers big issue becoming bigger (e.g. Ballina Roads Contributions Plan 2010) Dealing with material public benefit proposals clear procedures (e.g. Camden Policy and Procedures Manual)

31 DA planners Up-to-date contributions rates schedules, electronic calculators Clear and unfettered assessment role in planning agreements (Planning Agreements Policy)

32 Consultant planners Due diligence stage - constraints and opportunities analysis (prepare a mock section 94 plan) Check and re-check the consent condition: Is the condition reasonable in the particular circumstances of this development? Does the amount accurately reflect the indexed contributions plan amounts? Are there s80a conditions and s94 conditions for the same works item? Are there opportunities for contributions offsets? (section 94(5), (6)) Ensure the client developer obtains DA approval and acknowledgement of any s94 offset BEFORE carrying out local infrastructure works

33 Consultant planners Planning Agreements: Seek win-win outcomes Prepare an offer that has de-risk value for all sides Get the developer to see the value of taking control of the section 94 works program User-friendly VPA explanatory notes (Oran Park VPA) Negotiate settle-up contribution payments to the back-end of the development

34 Principles for moving forward

35 The way forward Consistent, certain and reasonable infrastructure contributions for developers Certainty that the new communities will be provided with an acceptable standard of baseline infrastructure

36 The way forward Focus on infrastructure delivery and coordination, not just contribution amounts More simplified system but retain nexus as the preferred basis for determining greenfield contributions Standard charges for transparency and certainty: s94 & s94a Nexus charging preferred, but if contributions caps are to remain, provide certainty for the funding gap Why not consistency between section 64 and section 94 approaches? End the uncertainty with State levies

37 The way forward Foster an attitude of partnership in the delivery of developmentgenerated infrastructure best practice in joint delivery arrangements VPAs: let s share the information. The facts should be canvassed, and best practice examples illuminated, in a review of the VPAs that have been executed. DP&I should do this. Systemise contributions plans, policies and procedures (Shoalhaven Plan, Camden manual) Careful attention to phase-in strategies

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39 Key messages Take the lead / don t wait and react Integration Partnership culture / pragmatic solutions Attention to detail Continuous improvement

40 Questions GLN Planning Pty Ltd ABN Level 10, 66 King Street Sydney NSW 2000 GPO Box 5013 Sydney NSW 2001 P [02] F [02] E W info@glnplanning.com.au glnplanning.com.au