Plan Melbourne Refresh Update – Residential Zoning and Code Assessable Development are Key

Things have progressed on a few fronts with respect to the Plan Melbourne Refresh discussion since our last post.

Residential Zone Reform Review

One of those fronts was the intention to review the rollout of the reformed residential zones implemented by the former Government.

A couple of months ago, Victoria’s Planning Minister Richard Wynne announced that an independent advisory committee had been appointed to review the recently reformed residential zones ‘in the context of managing population growth, the need for more housing in the inner suburbs and improving housing affordability.’

In early February, the Residential Zones State of Play reports were released. Prepared by the Managing Residential Development Taskforce, the reports include a list of suggested improvements to the residential zones for review and further discussion.

There is particular focus around the potential impact of the application of NRZ (the most restrictive zoning), pointing out a few local housing markets which could present future issues of housing diversity, choice and price because of their extensive NRZ coverage.

The municipalities of Boroondara, Glen Eira and Bayside have been highlighted in particular, and looking at the overall zoning map (above), we would also see Moreland as primary candidates, and to a lesser extent some of Brimbank, Banyule as well as Whitehorse, which are all within this ‘middle ring’ of Melbourne.

Fast Track Permit Process for Multi-Dwelling Property Development

One key related item that doesn’t appear to be covered in the State of Play reports is the suggested fast track ‘code assess approach for new multi-unit development’ that the Plan Melbourne Refresh document highlighted. Thankfully UDIA Victoria has weighed in on that recently, amongst other things, with its submission on behalf of the property development industry in mid-March.

The UDIA says there are a number of gaps and incorrect assumptions regarding the implications of the residential planning zones to date, and is concerned that if the current rate of new housing supply continues, Melbourne will face a significant shortfall in housing supply which will only increase affordability issues into the future.

The former Government implemented VicSmart with the aim to streamline and fast track the permit process for smaller scale dwelling developments, but it appears that it just hasn’t gone far enough. It was originally anticipated that dual occupancy applications would fall under this process where permits could be issued within 10 days, but that is not the case at the moment.

There is provision for fast tracking the subdivision of a site into two lots, but the criteria requires a permit for dwellings to have already been issued, and this ‘permit for dwellings’ process falls under the normal provisions, which is known to take up to 12 months or more, even if the application ‘ticks all the boxes’ (i.e. complies with relevant planning provisions).

The ‘prescribed’ period for decisions on permit applications is 60 days, but the current rules essentially allow this ‘clock’ to re-start, so the process is protracted, and this results in additional cost of development. The flow on effect is a more expensive product, and/or less re-development and growth in these areas due to price point pressures, potentially adding more pressure on urban sprawl and working against the proposed ‘70/30 target’ suggested in the Plan Melbourne Refresh document.

What does make sense is one key measure recommended by UDIA Victorian Chief Executive, Danni Addison, to ‘expand VicSmart to enable code assessable development approvals’. Coupled with other recommendations on zoning allocation, infrastructure capacity and other planning process changes outlined in UDIA’s submission, ‘to ensure every Victorian municipality has a rolling 25 year supply of housing aligned with state government’s projects’, can only have a significant positive impact on achieving the right diversity and affordability objectives that Melbourne needs.

It will be interesting to see how the independent advisory committee will use the information gathered, what advice they may provide, and what changes will be implemented.

We understand that the Public Hearing process has now commenced and will conclude around mid-May 2016, with the Advisory Committee to report to the Minister for Planning by mid 2016.