The failed NSW planning reform

State Governments are always reviewing planning legislation. Legislation for development control always reflects a compromise between different interests. As the politics change, so one group will try to gain advantage, push for 'reform' and attempt to rebalance the existing compromise.

In recent years the development industry has been in the ascendency. Two themes have been pursued. Firstly, an increase in untrammeled ministerial power to grant spot rezonings, giving windfall gains to those able to access the minister. Secondly, the standardisation of controls to facilitate the provision of standard urban products such as detached houses, shopping centers and fast food outlets.

Neo-liberals have questioned why there should be planning controls at and why market demands should not be given a much freer hand. (Seldom do these proponents acknowledge that the land market is heavily distorted by massive tax and other subsidies, especially for home owners. Doing away with controls over time would result in most of Sydney's CBD being subdivided into residential strata units.)

The New South Wales Review

In NSW the new State Government launched a review of the Planning legislation soon after it was elected. Having encouraged the public to make submissions, the White Paper and draft Bills recently published have been widely condemned for a range of reasons including taking little notice of the submissions.

This article deals not with issues that have attracted most concerns, but with the reform package as competent piece of regulatory reform. I describes my reaction to a process which started well with the Minister's opening statement and has gone downhill from there. I will describe how the Minister's enlightened key test for success could have inspired a real reform of Australia's most complex and corruption-friendly planning control system and how the proposals put forward will, if enacted, leave us considerably worse off than we are now. I will conclude with suggestions of what should happen.

I was delighted with the Minister’s simple, revolutionary objective for the review two years ago. Minister Hazzard said “‘Wherever you are in the State, someone who wants to provide housing or someone who wants to protect their environment, should be able to press a few buttons and know exactly what was intended for that particular parcel of land and what can or cannot be done with it. An IT friendly system. A user friendly system.”

By acknowledging the reform potential of digital technology, at last, I thought, a Minister has recognised the critical element for achieving an effective, efficient and modern system for planning controls.

Digital technology has revolutionised the recording and availability of Torrens title information. A digital cadastral database allows title details to be interrogated online in the same way as the Minister wants planning control information to be interrogated. The lot boundaries are digitised and digital information is attached to each lot by the unique identifier of the lot number. Registration of a change to the details on title is achieved, not by filing paper documents, but by entering the changes into the central database.

Achieving the Minister’s Objective

To achieve the Minister’s objective, competent planning control legislation would:

• Set up a central authoritative cadastral database (the title system provides one).
• Translate the current multiple layers of paper based controls into a single set of integrated control information for each parcel on the database (Not just identify documents that might contain controls.)
• Require that any changes to that information must “explicitly amend” the controls applying to the relevant parcel.
• Necessarily recognise the database as the single record of statutory acknowledged development rights and obligations, and therefore:
  • Ensure that changes can be initiated by different levels of government, and avoid one cause of the layers of separate control documents that so complicate the current system.
  • Make a distinction between 'plans' and 'development controls', with the latter only being included in the database and ideally only containing words that do real development control work (i.e. positively or negatively affecting the value of land).

The database could also contain other information that influences the value of a parcel of land, such as the details of approvals and orders.

As with a Torrens title, the parcel record would be 'evidence to the world' of development rights and obligations applying to the parcel. As such, purchasers could not claim to have been misled as to the nature of those rights and obligations.

Benefits of parcel formatted controls

As well as improving the certainty and authority of information available, a single digital document of an integrated set of rights and obligations applying to each land parcel has other potential advantages for the nature and quality of development, for example:

• It will be easier to trade in development rights. At present heritage floor space can be traded with covenants being placed on titles. With the new development control data base being 'evidence to the world', it, rather than the title system, can be used. Simpler recording would facilitate greater use of trading in development rights as a means of achieving environmental design outcomes.
• By using a parcel format rather than coloured land use zoning maps and the regulations relating to those zones, there can be more locality explicit controls. Rather than the vague objectives of some standard land use zone, objectives for each locality can be the primary control.
• For example, in new development areas, well-worded design outcomes expressed and limits on the quantum of development together with control over all design and works, but not subdivision could greatly improve contextual design. The absence of standard land use zoning maps could allow a mix of land uses and dwelling types appropriate to the nature of the development and the market.
• In selected areas, and especially in redevelopment areas, density controls, rather than minimum lots sizes, could be used. Design options are expanded with the inclusion of the details of approvals on the 'notice to the world' digital register ensuring that density entitlements are not misused. Using subdivision control as a density control (x parcels per hectare) ensures the whole area is carved up, reshaped to receive the standard project houses located by standard set backs on standard sized lots. By contrast,with a density control (x houses per hectare) and no control over subdivision, designers can locate housing and services wherever they best fit on the site. That density entitlements had been used would be apparent to any purchaser thereby defeating any attempt to double-dip.
• By doing away with the need for land use zoning maps and standard State-wide regulations and moving to parcel formatted controls, the planning profession can dispose of the current impression that the objectives of planning are to separate land uses and ensure everywhere looks the same as everywhere else. Instead the profession could regain its reputation as encouraging the making of excellent places.

How Well Has the Government Done in Implementing the Minister's Objective?

The old system rebadged

The exhibited White Paper and the draft Planning Bills are an incompetent mishmash of the past complexities and free market ideology. Excessive opportunities for the use of Ministerial discretion will expand opportunities for corruption. The Minister's objective for a parcel formatted digital cadastral database has been thrown into the muddled mix but only at the last minute. It is an add-on, not the driving force for a reformed system.

The core of the proposed new planning system is essentially a 'rebadge' of the current complex system:

• The multiple ways of applying for development consent are retained.
• Control continues to be imposed by separate 'regulatory' instruments as it was in the original planning legislation in the 1940s.
• No consideration has been given to imposing control by the Act itself, thereby allowing the 'controls' to be policies affecting the discretion to grant consent rather than imposing control in the first place.
• The three layers of control documents are retained, each with different 'weight', regardless of wording. The welcome proposal for the misleadingly called 'local plan', which is to contain all the development controls, is undermined by retaining within it the existing three levels of documents.
  The 'local plan document' will have a parcel-based digital base but will contain, not only the three categories of controls, but also a local strategic plan that is to be taken into account in assessing planning applications.

A hopeless muddle!

Strategic planning

The planners' fantasies can be seen in the three levels of strategic planning that the legislation will require. This is a repeat of the fantasies in the 1979 Act. Those plans never appeared. Instead we got the proliferation of levels of differently weighted development control documents that, in essence, are now to be retained in the 'Local Plan'.

The strategic plans legislated for in 1979 did not appear for a good reason. What does it mean to legislate a strategic plan? Rightly it makes governments nervous to say anything meaningful. Given the time taken to prepare it, such a plan will be out of date by the time it is finalised. It’s not surprising that hidden in the current Bill are provisions making the process for consulting on the strategies and the outcomes not enforceable in Court: PR pretending to be legislation, in other words.

When it comes to planning legislation, legal certainty is required for the property rights of landowners and the expectations of investors and of communities. However, governments do not need legislation to plan. Regulation of development rights is not strategic planning: it is one of the tools to achieve strategically planned outcomes.

The operation of development rights legislation needs to provide certainty, transparency and efficient administration. The White Paper proposals do not provide them. The muddling of the planning process with the development rights process ensures confusion and inefficiency. The incompetent grafting of an economic rationalist ideology, along with a desire to pander to the demands of the development industry for unfettered Ministerial discretion, ensures that the proposals seriously lack transparency and, if enacted, will greatly expand the opportunities for exercising undue influences. A dangerous hopeless muddle!

What Must Be Done

The whole package must be withdrawn and redone from first principles. The constant tinkering with the fundamentally flawed 1979 system, of which the current proposals are just a further example, must come to an end.

Two fundamental changes must be made:

• First, the legislation should require all development to require consent. Instead of imposing control by detailed individual instruments of subordinate legislation, controls would merely be guides to and fetters on the discretion of governments to grant consent as well as identifying those developments for which consent can be assumed. This change in the design of the legislation would greatly reduce the role of lawyers and simplify the processes.
• Second, the Minister's objective for a parcel based digital record of controls must be central to their formatting, with the aim of maximising the opportunities for a reduction in unnecessary control and an increase in opportunities for contextual designs.

There are other theoretical issues to consider when building the proposals for reform from first principles:

• Third party merit appeals can lead to uncertainty, but there are advantages. Rather than administrators being obsessively concerned that their decisions may be declared illegal for some administrative error, with the expensive consequence that can follow, it is better to provide a relatively simple merit appeal that leads to a final decision. And, as the ICAC has said, the possibility of third party merit appeals is an effective inhibitor of corruption.
• Regardless of who initiates a change there need be only one administrative process for making new development controls and a one process for applying for consent. The routes taken may differ somewhat depending on the nature of the change or proposal, but the fundamentals remain the same. A single process reduces complexity and the risk of error and allows the bundling of applications under other control systems into the one process (e.g., Local Government Act 1993).

Conclusion

The whole package of the White Paper and the Bills must be withdrawn. The proposals are incompetent and will not lead to a more effective, efficient and transparent system for regulating development rights and obligations.

A new effort must be made to put forward a new set of reform proposals.

They should:

• Make a clear distinction between governments undertaking strategic planning, which is an executive function of good government, and governments administrating a legislated system of development rights and obligations.
• Put the Minister's objective of a parcel formatted digital cadastral data base of development rights and obligations at the centre of the proposals.
• Consider the option of imposing control by the Act itself rather than by separate subordinate legal instruments.
• Greatly simplify the administrative process for amending the rights and obligations on the register and the process of applying for development approval.
• Include wider opportunities for third party merit appeals as part of a package of provisions that comply with ICAC principles of corruption prevention.

The resultant legislative package should be short and, being written in plain English, should be clearly understandable, avoiding the need to consult lawyers to find out what is going on.