Which Residential Zone Will You Be In? Are you at Risk?

property development melbourne new zones







Residential Zoning in Melbourne is changing. If your property hasn’t been re-zoned yet, it will be by the end of June 2014. Considering its wide ranging impact on Melbournians, it is a little surprising that this topic has not been as highly debated in the media as anticipated.

In July 2013, the Victorian Government introduced 3 new residential zones into the planning provisions. The objectives are essentially to make the planning system more effective and efficient by simplifying requirements and improving the range of zones. This is to allow a broader range of activities to be considered and give greater clarity about the type of development that can be expected in any residential area.

The existing residential 1, 2 and 3 zones will be replaced by Neighbourhood Residential (NRZ), General Residential (GRZ) and Residential Growth (RGZ) Zones. Each new zone could be described as follows:

RGZ – enables housing growth and diversity (locations near activity areas, train stations & other amenities)

GRZ – respect and preserve urban character while enabling modest housing growth and diversity (in most residential areas consistent with existing neighbourhood character)

NRZ – restricts housing growth in areas identified for urban preservation (areas of recognised neighbourhood character, heritage, environmental or landscape significance)

Essentially, these new zones should better identify where existing urban character will be protected and highlight areas that are appropriate for urban densification.

The application of the new zones is the responsibility of Councils, whom are required to resolve and implement the new zones by 30 June 2014. The process requires consideration to their existing strategic plans, housing strategies and related work, coupled with a public consultation process within their respective municipalities.

The City of Glen Eira and the City of Dandenong have now applied the new zones and others have varying levels of progress. Most are well progressed and we should see the results over the coming months.

Unfortunately, what we have seen so far is not quite what was expected, and a little concerning. Based on the original objectives, we generally anticipated that GRZ would in fact be applied ‘in most residential areas’, with NRZ and RGZ making up the minority. Instead, we are finding much larger percentages heading towards NRZ (ie limited development), including areas where the urban design principles would clearly accept higher density outcomes.

The problem is that once these new controls are in place, they will be difficult to reverse. This poses a potential risk for properties which are now proposed to fall under Neighbourhood Residential Zone (NRZ). In most cases, NRZ is highly likely to be more restrictive to re-development compared with the previous zoning provisions, and the word is that these property owners are concerned about the potential of their property reducing in value.

This could in fact be the case, but all is not lost yet. There appears to be a small window of opportunity for these property owners. Until the new zones are implemented, development applications are more likely to be assessed under the current provisions.

If your property is located within a Council that is yet to implement the new zones, please contact us as soon as possible. We can not only help you identify whether your property is likely to fall within this ‘higher risk’ area, but explore some alternative options that you may not have yet considered.