Rezoning reforms planned for New South Wales

Introduction

Following a major consultation process with local councils and other stakeholders, the Department of Planning and Environment released its long awaited discussion paper “A new approach to rezonings” late in December 2021.

The Discussion Paper heralds a new approach to rezoning land. The proposed changes aim to significantly reduce the time, cost and complexity of the process.

Following public comment on the Discussion Paper, it is expected that a bill will be prepared and introduced into Parliament later this year.

The key changes proposed are:

• creating a streamlined and efficient process for local environmental plan (LEP) amendments that aligns with strategic planning objectives;
• setting clear matters for consideration, timeframes and a consistent fee regime to give greater certainty in the process;
• having councils receive and determine private proponent-initiated LEP amendments, with no or minimal Department involvement in assessment;
• having the Minister receive and determine, through the Department, other LEP amendments, including those prepared by councils and public authorities;
• increasing the role of the Department in supporting, monitoring and assisting councils in the process;
• requiring LEP amendments to go through a mandatory and upfront pre-lodgement process;
• moving all merit assessment processes to after exhibition; and
• providing private proponents a right of appeal against the final decision.

Why the changes?

Over the last five or so years, there has been a much greater focus on strategic planning in order to reduce the need for ‘ad hoc’ rezonings. However, practice has shown that amendments to planning instruments remain an important tool for the orderly and economic use of land.

The problems with the current process include:

• lack of accountability of councils and the Department in meeting timeframes leading to extensive delays;
• duplication of assessment by councils (prior to ‘Gateway’ determination) and by the Department (during Gateway) and then again post-exhibition;
• inconsistent merit assessment by councils and the Department;
• no right of appeal for proponents; and
• extremely expensive and time consuming process.

The proposals

The Discussion Paper puts forward the following key reforms:

• Clear and shorter timeframes: The new approach aims to reduce the time to rezone land by a third by the end of 2023. The Discussion Paper talks about introducing benchmark timeframes for each stage in the process. Different timeframes will apply to different categories of planning proposals with proponent-led rezoning applications benchmarked at 37 to 48 weeks from scoping to assessment and finalisation.
• Recognition of developers as applicants: Landowners and developers would be given a recognised status as planning proposal proponents and be responsible for submitting a ‘rezoning application’ to the ‘rezoning authority’.
• Greater control for councils: Councils would be given sole responsibility to assess and determine rezoning applications made by landowners and developers, with the Department only having a supporting role. The reforms would abolish the ‘Gateway’ process.
• Mandatory pre-lodgement process: Proponents must participate in a pre-lodgement scoping process and be given feedback from the rezoning authority on the strategic merits of the proposal, comments from State agencies and recommended changes. Study requirements would be issued by the rezoning authority following the scoping process, replacing Gateway conditions issued by the Department.
• Less steps: Along with the abolition of the Gateway determination and pre-exhibition ‘check’ by the Department, there would be no place for Gateway reviews by the Independent Planning Commission (IPC). Once the rezoning authority confirms that submission requirements have been fulfilled (a 7 day period is prescribed for this step) the rezoning application proceeds automatically to exhibition.
• It is also envisaged that development applications would be lodged by developers following permission to exhibit the rezoning application being granted so that public exhibition of the development application occurs in concert.
• Right of appeal: A right of appeal is proposed for a council or proponent that is dissatisfied with the outcome or where progress is delayed (ie, a ‘deemed refusal’). Two options are put forward:
  • an appeal to the Land and Environment Court, similar to its function of conducting merits appeals of development application decisions; and
  • an appeal to the IPC, similar to its ability to step in as the decision maker for State-significant development.

Will it work?

The Discussion Paper is a high-level document and questions remain as to the effectiveness and fairness of providing councils with far greater control over each stage of the rezoning process for private proponent-led rezoning applications. There are likely to be corruption concerns in handing back rezoning power to Council for proposals by private landowners and developers.

The imposition of maximum timeframes for key stages of the rezoning process and the omission of the Gateway process are an improvement, although more detail is required as to how these benchmark timeframes will be enforced.

A right of appeal is also a welcome change that enables the merits of a rezoning application to be independently tested.

The reforms are not, however, without their potential pitfalls and risks to developers.

There is a risk that potential applications are effectively stalled at the scoping stage prior to lodgement as the rezoning authority would have the power to refuse to issue study requirements for the proposal on the grounds of strategic merit (a matter over which reasonable planning officers may differ).

This could be a pinch-point for many rezoning applications and there is no way, under the proposed scheme, of initiating a review of a rezoning authority’s decision to effectively reject the application at this interval or compel the rezoning authority to issue study requirements.

As the prospect of an appeal to the Court or IPC effectively arises upon the lodgement of the rezoning application, Councils may guard the issue of study requirement tightly because there is no other interval for the rezoning authority to scuttle or delay the process.

The reform process and how to get involved

The Discussion Paper includes some specific questions that the Department is seeking feedback on. The Discussion Paper and a survey in response to the questions posed therein is available at A new approach to rezonings in NSW | Planning Portal - Department of Planning and Environment.

The Department is receiving comments on the proposed reforms until Monday, 28 February 2022.

Further inquiries

Please contact Dr Nick Brunton, Partner in our Environment and Planning team if you would like further information about how the proposed legislative review might impact your particular situation.