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24 October 2019

Planning and Building Approvals Process Review

Earlier today, Victoria’s Red Tape Commissioner, Anna Cronin, released a discussion paper on the Planning and Building Process Review. The discussion paper focuses on potential improvements through:

  • Broad adoption of recognised best practices by regulators
  • A simplification and reform of the rules that guide development and land use
  • Improvement of interactions between decision-makers

The economic costs of avoidable delays have been estimated at between $400-600 million to the Victorian economy – up to 2% of the value of the entire construction sector!  Improving these outcomes would reduce delays and costs for investors and positively impact Victoria’s housing affordability issues.

At a time when housing affordability and supply are still contentious topics, reducing unnecessary delays and consequential costs, is part of the housing solution.

The Existing Approvals Process

As many of our clients understand, owners must go through a variety of formal processes to obtain approvals, including to:

  • Change the rules around how they can use or develop their land – known as strategic approvals
  • Change the use or development for their land under the existing rules – known as permit approvals
  • Achieve permit conditions required by referral authorities, utility operators or local Councils – known as post-permit approvals
  • Begin, progress and complete building process – known as building approvals

While necessary, the replication of approvals takes time to assess and decide whether a proposal meets the requirements and expectations of a local area. This can add significant costs and delays to the overall process providing uncertainty to investors. 

Meanwhile, Victoria’s planning and building system continues to face pressure from population growth and changing market demands for housing. Improving the overall processes for approvals would likely result in additional jobs and result in further growth within Victoria’s construction sector. 

Proposed Improvements

In order to facilitate improvements, the discussion paper has outlined several key areas where Council processes might be able to adopt best practice, including:

  • Engaging earlier with referral authorities through pre-application processes;
  • Sending referrals and requests for information (RFI) concurrently;
  • Better coordination and management of internal referrals and assessment;
  • Adopting best practice delegations;
  • Processing applications online with a system that applicants can view.

The discussion paper identifies 27 opportunities for improvement across the four approval stages of Victoria’s planning and building system, many of which are focused on providing a more transparent and efficient planning and building system.

The report provides startling information on the delays in the planning permit approval process, which many of our client experience first-hand. 65% of planning approvals take more than 60 days to issue, and 25.9% of permits take more than 6 months. The report provides for a range of recommendations to reduce planning permit assessment times, with one such target being a reduction in the use of Requests for Further Information, a much-used tool by some local governments to reset the statutory clock.

Click here to read the full report.

Ratio’s perspective

If adopted, these proposed improvements are good news for permit applicants and Ratio clients.  Unnecessary red tape causes uncertainty and delays for those looking to develop land and inevitably results in an increase in the cost of housing and a reduction in supply. 

As Tim Gurner recently noted, the over-regulation of the planning and building system results in Melbourne being under-prepared for its future population growth. Melbourne is one of the fastest-growing cities in the western world – an efficient and effective development approvals system is required to ensure appropriate development is being directed to the right parts of the city. Many of the opportunities for improvement within the discussion paper would result in a better approvals process, including the streamlining of the PSP approval process.

Ratio is particularly supportive of the discussion paper’s impetus to encourage engagement across Councils and referral authorities. This facilitates an integrated approach to decision-making while providing more certainty for investors and the community. The current system allows broken channels of communication and frustrations for people who experience the ‘siloed’ approach of some regulatory bodies.

The changes within the discussion paper may also result in extra resourcing for Councils and other authorities. These agencies are often weighed down by the complexity and technical difficulties presented within planning and building regulations. Greater reporting and oversight from the State Government means that a ‘smoothing’ of the Council processes is likely. 

A frequent frustration we hear from clients is that the approvals process is different in each municipality, often leading to confusion. The adoption of best practice administrative and processing standards would decrease this frustration.

The report touches on the issue of old school intuitional attitudes within some sectors of government, which can result in longer processing times. We believe that broader education and cultural shifts towards a user-focussed system will be essential in reducing processing times.  

More carrot and less stick might be the answer as well as the support and encouragement of younger professionals as they develop into their planning careers, with a shortage of experienced staff a key identified issue.

One omission from the report is the role that local politics plays in the planning process, with many of our clients experiencing delays as a result of Councillor call ins and intervention. Ultimately, a review of the level of delegation will be critical in providing certainty and confidence in the system.  We can only hope for our ultimate goal of the de-politicisation of planning.

Ratio Consultants will continue to strongly advocate for process improvements within the Planning and Building industry. This leads to improved results for clients, greater certainty for investment in Victoria and a planning and building system that the community trusts to regulate in their best interest.

Author: Colleen Peterson, CEO and Scott Matheson, Senior Planner 

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red tape review report article