New review rights when councils block spot rezonings

Aaron Gadiel, Director, Sydney
Anthony Whealy, Partner, Sydney
 
31/10/2012


From 2 November 2012, developers and landowners will be able to formally apply for a review when a local council blocks a spot rezoning.

The new regime is based on proposals that were released in draft form in April this year and could amount to a significant change in the way the NSW planning system works.

Background
The existing planning system has not traditionally recognised any right for a property owner or developer to apply for land to be rezoned – despite the fact that almost all spot rezonings come about as a result of a request by a property owner or developer.

The lack of any formal rights has led to an inconsistent and ad-hoc decision-making process by local councils and the state government.  Gadens frequently works with developers and property owners whose requests for spot rezoning of land are ignored, arbitrarily rejected or delayed without any good reason.

The new system
The new system is essentially a government policy, not legislation.  This means that proponents of spot rezonings will still lack the strong rights enjoyed by, say, those who are applying for development consent.

The system will not give developers or property owners a right to have a hearing in the Land and Environment Court on its merits.  Instead, the system will be based on reviews by the Department of Planning and Infrastructure, joint regional planning panels and the Planning Assessment Commission.

However, by documenting a system of reviews, even in the absence of legislated rights, the government is giving development proponents a more robust process.  There is also a potential for aspects of the new policy to be enforced by the courts if councils or the Department ignore it.

Pre-gateway reviews
If a proponent (eg. developer, landowner) has requested that a council prepare a planning proposal (for a change to a local environmental plan or a state environmental planning policy) it may ask for a pre-Gateway review if:

  • the council has notified the proponent that the request to prepare a planning proposal is not supported; or
  • the council has not indicated its support 90 days after the proponent submitted a request (if the request was accompanied by the required information).

If the council notifies the proponent that the changes are not supported, the proponent has 40 days to request a review of the council’s decision.

Subject to the Department being satisfied that the application is eligible (in a basic sense) it will give the council concerned 21 days to explain why the original request was not progressed.

This will be followed by a “Department assessment”.  Essentially, the Department will decide whether or not it supports the proposed change to planning controls.  If it does not, the matter will proceed no further.  If it supports the proposal, it will be referred to the relevant joint regional planning panel (and in the City of Sydney, the Planning Assessment Commission), for a review.

The panel/Commission will then consider the merits of the proposal and make a recommendation to “the Minister” (although in practice this may also mean the Department) as to whether the planning proposal should receive a gateway determination.

The Minister, or a Departmental official acting on behalf of the Minister, will consider the recommendation and make a decision as to whether the proposal proceeds, and if it does proceed, on what the next stages of the process will be.

Worryingly, if the Minister (or Departmental official) supports the proposal it may simply be referred back to the relevant council with a ‘request’ that a planning proposal be submitted within 40 days.  There is not a good history of councils complying with such requests (particularly when they are hostile to the rezoning).

Alternatively, the Minister (or Departmental official) may ‘consult’ with the council’s general manager to ‘discuss’ the possibility of re-assigning responsibility for progressing the matter from the council, to the Department.  This would mean that the Department itself would sign-off on the planning proposal and submit it for a ‘gateway determination’.

Neither of these steps sound particularly hard-hitting.  Perhaps this is simply a diplomatic way of saying that if council does not co-operate the government will strip them of their role and give it to the Department.

In any event, if the planning proposal is then signed-off – either by the council or the Department – it will proceed through the existing ‘gateway determination’ process, which typically results in public exhibition, consideration of submissions and a final decision on the matter.

Existing matters
If a proponent made a request in writing for council to prepare a planning proposal prior to November 2012, the proponent may seek a review under the new regime if the information accompanying the request is still less than two years old.

Fees
A proponent requesting a review must pay $5,000 up-front, and if the Department supports the application and refers it to a joint regional planning panel or the Planning Assessment Commission, a further $15,000 will be payable.

Where the council is stripped of its role in signing-off on the planning proposal, a further fee of $25,000 or more will be payable to cover the Department’s anticipated costs.

Review of gateway determinations
A new capacity for a council or a proponent to seek a review of gateway determinations made by the Department has also been created.  This might be necessary, for example, if a planning proposal is supported by a local council, but rejected by the Department. (The process is not available if the Minister is the one who rejects the planning proposal.)

If the gateway determination is either to not allow a planning proposal to proceed, or to resubmit the planning proposal, the council or proponent has 40 days to request a review.

If the gateway determination is to proceed but with conditions that the council or proponent considers inappropriate, the council or proponent has just 14 days to indicate their intent to request a review.

Again, where the proponent has made the request, the council have 21 days to provide a response.  The Department will prepare a report, and then the matter will be referred to the Planning Assessment Commission.

The Commission’s advice will be provided to the Minister (or a Departmental official acting on the Minister’s behalf) who will make the final decision.  This may involve a new gateway determination decision being made, or may simply be to support the existing decision.

There is no ability to seek a review if no gateway determination has been made (i.e. no ‘deemed refusal’).

Timelines
Benchmark timeframes have been set for the following types of local environmental plan changes where they are consistent with the state’s strategic planning framework:
 
  • administrative changes and errors - 3 months;
  • minor spot rezoning - 6 months;
  • major land release and urban renewal - 12-18 months; and
  • principal LEPs - 24 months

The policy document does not actually say when this period is to be measured from and to.  We suspect that the Department intends that this timeframe is to be measured from the grant of a gateway determination, to the publication of the local environmental plan changes.

A gap
There is an obvious gap in the new system of reviews.

A council will be able to avoid any of the reviews set out in the new regime by initially supporting a planning proposal, allowing it to receive a favorable gateway determination, placing the proposal on exhibition for community comment and then rejecting the proposal once the public submissions have been considered.

In those circumstances, the new regime does not allow the proponent to seek any independent reviews of the matter.

We hope that this apparent oversight will be promptly rectified.

Other changes
As part of these changes, councils will now be given greater authority to finalise a wide range of rezonings (that have received Departmental support in a gateway determination) without formal reference back to the Department.

This may raise hopes of a slightly faster process for finalising rezonings, but it may raise concerns about whether the final terms of changes to a local environmental plan are the same as the one originally supported by the property owner or developer.  Hopefully the Department will deal with this by placing limits around each council’s ability to subtly vary proposals when it makes its gateway determination.

Our view
We have seen some slippage in the timetable for the wholesale replacement of the Environmental Planning and Assessment Act.

For this reason, it’s pleasing to see that the reform agenda is not ‘in suspension’ while the broader planning review continues.

This is a significant, but far from perfect, change to the way spot rezonings are dealt with in the planning system.

We predict that some proponents, whose proposals have strong planning merit, will benefit from the new system of reviews.  On other hand, we also anticipate the other proponents, with an equally strong planning case, will be frustrated by the fact that all elements of the new system are not legally binding.  In particular, there are still several key points in the system where there is potential for council opposition to defeat an otherwise sensible proposal.

Can we help?
If this new regime affects you, please feel free to contact us here at Gadens if you would like to know more.