Submission to the Standard Development Contributions Advisory Committee. November Planning Institute Australia Victorian Division

Transcription

1 Submission to the Standard Development Contributions Advisory Committee November 2012 Planning Institute Australia Victorian Division

2 + Contact Information Gavin Alford Vice President Planning Institute Australia, Victorian Division Jason Black National Director Planning Institute Australia PIA VICTORIAN DIVISION G-05, 60 Leicester Street Carlton VIC 3053 PO Box 675 Carlton South 3053 Telephone: (03) Facsimile: (03) Web: ABN November 2012

3 Planning Institute of Australia (Victoria) Submission to the Standard Development Contributions Advisory Committee General comments The proposed new model is consistent with the position previously advocated by PIA. The main objective of this and previous PIA submissions revolve around promoting good planning and delivering good planning outcomes, for a broad community benefit. The current development contributions system is difficult to implement and few plans prepared, thus limiting the delivery of good planning outcomes. In refocussing the development contributions system, the key underlying factors requiring improvement are the complexity and level of detail required to implement a DCP. PIA believes that a better balance needs to be struck between encouraging good planning and ensuring that these plans and can be implemented. The preferred development contributions plan is one that is supported by a structure plan or an equivalent strategic plan that identifies the necessary infrastructure to be provided. Ideally, these strategic planning documents should be prepared as a matter of course by and with Councils. They provide the strategic justification for the infrastructure items themselves, with the development contributions schedule being included as part of the implementation chapter. The schedule does not need to be complex, and should allow for flexibility in implementation so that infrastructure can be delivered in keeping with the needs and priorities of the community. A standard levy or a flat rate provides the simplest transition from infrastructure plan to implementation. However, a standard set of levies does not and should not replace the need for clear and directive strategic planning. PIA supports the need for these plans to demonstrate the key principles of need and nexus when determining the infrastructure items to be covered under a development contributions levy. Given the varying categories, settings and types of development it is crucial that there is a varying list or range of charges that can be applied to the appropriate circumstances. There is an amount of variance embedded in the DCP process which means that the system developed needs to be more than a one-size-fits-all system. PIA Vic Response to Developer Contributions Advisory Committee November 2012 Page 3 of 9

4 The Review is attempting to address a complex system applied to a diverse range of settings, and respond to a variety of issues. It would be proposed that, ideally, in the new system the complexity would be addressed through the strategic planning document, with the development contributions being ancillary to that document. The remainder of our submission focuses on the Advisory Committee s pre-circulated questions. Question 1. Are the five infrastructure categories appropriately defined? Unclear why drainage infrastructure has its own category. Other mechanisms to collect contributions such as drainage schemes should be considered. There is a gap between drainage required as part of the development and the stormwater catchment area managed by the relevant water authority. This gap could be the focus of the category; however, it is not listed in Attachment 2. Assume Public Land relates to all land items within the other 4 categories. This should be clarified. Question 2. Are the different development settings appropriately defined? System complexity will be increased through different location settings. In some local government areas, such as Peri Urban, most, if not all, of the settings might be applied. Within Melbourne s Growth Areas planning is underway that will eventually accommodate over million people. There is much at stake. The scale of development and associated development contributions, are significant scale and the corresponding risks to all parties involved might should be considered as equally significant. Much has been invested in the development contributions and infrastructure planning for the Growth Areas that it might be considered to be distorting discussions about improving the overall development contributions system for the remainder of the State. As such, it is recommended that Melbourne s Growth Areas be removed from the State wide development contributions system, and that a tailor made approach be developed for these areas. There should not be a duplication of reference to regional cities under the growth areas definition. Regional Settlements should be listed to avoid interpretation issues. Established Areas assumes development. What about intensification of use through in-fill and decreasing dwelling size (it is important to ensure the DC trigger is clear). Strategic redevelopment sites how are these identified / defined? Question 3. Are the expected benefits of the new system achievable? The proposed benefits outlined in section 3.1 are appropriate targets as an outcome of this process. However, attempting to establish a standardised list of 60+ infrastructure items across five different settings with a residential / non-residential variance is a very challenging task given the substantially different approach that has been applied across the State regions and the 79 municipalities. PIA Vic Response to Developer Contributions Advisory Committee November 2012 Page 4 of 9

5 Achieving the expected benefits may be possible but will not be achieved by way of consensus or agreement. In some circumstances there will be winners and losers and therefore there is a risk of the system being under constant challenge. PIA has previously supported a standard model based on the development of an Infrastructure Plan, which was considered to be the process for localising the value of infrastructure if the standard was not relevant to a given setting. This infrastructure plan would be an implementation tool to the relevant structure plan or equivalent strategic planning document. Question 4. Are the proposed basic and essential infrastructure items appropriately defined? The items are not defined as such, rather it is simply a list. There may well be other items beyond this list relevant to particularly areas. As such, the list should be used as a guide only with the strategic planning document outlining the preferred direction. There may a flawed assumption that groups basic and essential infrastructure items together. For example, it is unclear why a Performing Arts Centre may be a basic and essential item, but a Municipal Library is not. Further clarification regarding community infrastructure items is necessary to ensure community Health & Wellbeing outcomes are not being compromised. Question 5. Are the population thresholds for community infrastructure appropriate? The outlined approach is consistent with current GAA approach in growth areas. The population thresholds in Attachment 5 were prepared for the growth areas and are not relevant for the rest of the Victoria. Smaller thresholds will be required and will be relevant in a number of areas, particularly in rural areas where access to services is constrained by distance. In developed areas there is a historical legacy of infrastructure provision that further complicates matters. Due to this, it is recommended that the concept of thresholds be abandoned for all but the Growth Areas. In other areas the list should be used as a guide only with the strategic planning document outlining the preferred direction. The model is more challenging for established areas where population increases may result in upgrades to existing facilities or rural settings where the thresholds may never be met, but the spatial realities demand levels of community and infrastructure service. The spatial distribution of open space is as important as the area provided when considering community Health & Wellbeing outcomes (i.e. social connection, physical activity). PIA Vic Response to Developer Contributions Advisory Committee November 2012 Page 5 of 9

6 Question 6 Do you agree with the approach to works in kind? The proposed approach is generally consistent with the current system. During the discussion with the Advisory Panel on 23 October 2012, the issue of worksin-kind and their role in the development contributions system was raised, including the ability for some development contribution works to be brought forward to match the staging needs of particular development projects. Staging and planned project delivery is easiest arranged through section 173 agreements. The establishment of standard form Section 173 agreements would save time and money in administrative processes. Outside a potential s173 the strategic planning document might be able to highlight infrastructure delivery priorities. There would need to be some flexibility to respond to changing demands and pressures. The issue of third party review was also raised, given that the planning authority, responsible authority and collection agency, and in some cases the infrastructure construction agency, all being the same body. Transparency of the process, restrictions on Local Government with regards to tendering, and their financial reporting obligations are considered to alleviate concerns that may emerge. Question 7 Are the proposed funding sources appropriate? For the Growth Areas the proposed funding sources are generally consistent with well established and tested practices. However, it is unclear how this relates to established areas that require infrastructure improvements / upgrades to accommodate increased growth. There are some concerns that the list does not accurately reflect the roles and responsibilities of state agency and local government. For example, for drainage in some municipalities local government has responsibilities for some non-development drainage. Question 8 Are the proposed limitations on the s173 Agreements appropriate? Yes. This avoids double dipping or duplication. The provisions provide councils with a choice to proceed under the new or old system. The s173 agreements also allow opportunities to address works-in-kind and staging issues to support developer priorities. However, with regards to infrastructure provision s173 agreement generally work best when dealing with large development proposals. Question 9 Any comments on the operational aspects of the model? Affordability The removal of separate development and community infrastructure levies to establish a basic and essential list of infrastructure requires close management. The introduction of community infrastructure construction costs may significantly increase development costs through increased development contributions as the cost is passed onto the land developers rather than the home occupier (user), under the current system. PIA Vic Response to Developer Contributions Advisory Committee November 2012 Page 6 of 9

7 It is understood that a separate study on the impact on housing affordability has been commissioned. Level of justification required PIA has previously advocated for the development contributions process to be founded on the preparation of the strategic planning vision and infrastructure planning. The principles of need and nexus are critical in maintaining the integrity of the system. That said, a standard list of items is supported with the strategic planning document be the lead document providing the strategic direction. Under the current system detailed design is required. This may lead to attempts to cover all contingencies and may result in a level-of-service creep, referred to by some as gold plating. The new model may address this by reducing the design risk by applying more flexibility for delivery. Setting the levies The key risk in setting the levies is a shortfall in cost recovery. The risk is heightened when trying to apply a standard across settings with many variations. As per the proposed model, varying standard costs based on varying settings should be applied. However, there will still be a heightened risk of a shortfall in cost recovery. As such, some measures should be added to reduce the level of delivery risk for example, requiring that funds must be spent on the infrastructure category to the benefit of the areas from which the monies were raised, however, they need not be spent on specific items as identified. Charge Areas It is appropriate to apply different charge areas based on the change in setting. In some municipalities multiple charge areas will be required. Question 10 Is the proposed approach to each levy fair, appropriate and implementable? The application of a fixed community and open space levy will ensure a consistent level of provision is maintained, which provided the provision thresholds are appropriate for the different settings, should ensure communities are well serviced. Transport, Drainage and Public Land contributions are appropriate to be varied based on the outcomes of a relevant strategic plan as the requirements for new and / or upgraded existing infrastructure will vary from place to place, as will delivery costs. Fixed Community Infrastructure Construction levy: - Based on a provision ratio methodology, which is acceptable to this type of infrastructure, however the funds should be allocated to respond to a demonstrated needs of the future community. Fixed Open Space Infrastructure Construction levy: - Based on a provision ratio methodology, which is acceptable to this type of infrastructure, however there needs to be some mechanism to ensure a balance between open space types (For example, it would be inappropriate to allocate all funds to local parks only). PIA Vic Response to Developer Contributions Advisory Committee November 2012 Page 7 of 9

8 Variable Transport Infrastructure Levy: - Option 2 (Standard levy set per geographic area) is likely to minimise the ongoing challenges against transport infrastructure costing and responds to the geographic differences that can result in cost variations. Drainage Infrastructure Levy: - Option 2 (Standard levy set per geographic area) is likely to minimise the ongoing challenges against cost estimates and responds to the geographic differences that can result in cost variations. Variable Public Land Contribution: - Agree with the land contribution requirements for local open space, roads and community facilities being determined through the strategic planning process and the inclusion of an equalisation process. - The methodology for valuing land should be clear to avoid continual challenges. Land valuation process should be independent and geographically appropriate. The ability to pool the fixed community infrastructure levy for the contribution area and any community and open space facility in that area is supported as it will help alleviate some of the collection shortfall risk. However, this principle should also be extended to drainage and transport infrastructure as the risk will also be present despite attempting to provide more geographic area relevance. Question 11 Is the level of justification required appropriate? Yes. The justification maintains the integrity of the development contributions process by maintaining the key principles of need and nexus. Question 12 Do you agree with the proposed approach to setting each levy? Yes. The proposed approach provides a balance between a fixed and variable levy setting system that is based on the outcomes of an appropriate strategic planning process that is necessary to justify the need for the levy to be applied. Question 13 How will the proposed new system impact on your organisation? PIA supports the promotion of good planning and the delivery of good planning outcomes. From our perspective, a balance needs to be struck between encouraging good planning and ensuring that these plans and can be implemented. A new system that reduces complexity but enables good planning outcomes to be achieved and strategic plans to be implemented is supported. Question 14 Can you identify any unintended consequences of the proposed new system? It is noted that there is a separate study has now commissioned to examine the impact on local Council finances of the development contribution system. The outputs of this study will be of interest, including to those municipalities who do not apply development contributions and how they might benefit from an improved system. PIA Vic Response to Developer Contributions Advisory Committee November 2012 Page 8 of 9

9 The application of a standardised system requires increased analysis and scenario mapping to occur, to ensure all scenarios are considered. If not properly analysed, there is a reasonably high risk that the levies that are set which will either be overly conservative (high catch all strategy) or underestimated (low) due to vast range of circumstances that must be considered. To minimise these risks there needs to be a general agreement on the standard of outcome that will be delivered. Above and beyond outcomes will need to be funded in other ways. The standardisation of the development contributions process may have an impact on employment across all sectors, particularly in growth areas, as this currently represents a large part of the planning debate. PIA Vic Response to Developer Contributions Advisory Committee November 2012 Page 9 of 9