Major changes proposed to NSW’s planning policies that include slashing lengthy development approvals are a step in the right direction - yet they could be extended further, property analysts say.

The reforms to commercial and industrial zones will reap $4.8 billion in economic benefits according to the government and since their recent announcement have been widely applauded by business and industry. The government’s ultimate goals are to boost the economy, employment growth, and simplify and speed up the planning system.

But a broader outlook would prove even more advantageous according to Stephen Gouge, Planning Manager, Knight Frank Town Planning Sydney.

“The information released by the DPIE (Department of Planning Industry and Environment) is absolutely a positive step in the right direction,” Mr Gouge told Commercial Property Guide.

“The intent is there to provide clearer and quicker approval pathways for developments that  will contribute to the delivery of jobs and boost economic activity in NSW. 

“Yet while this is a good step toward streamlining the planning system we think there are certainly other areas that could benefit from improvement. It is not clear why some of these development reforms could not be applied in other zones to help boost the economy.

“This is not just needed in the employment zones, but mixed-use zones too.

“The Sydney CBD for example with office occupancy recently announced to be at a rate of 50 per cent could also benefit from activation through expanding complying uses and development.”

Mr Gouge pointed out that Victoria undertook a similar simplification of planning laws in 2013. Back then, zoning reform led to five business zones being reduced to two standard commercial zones. “NSW is now looking to do the same eight years later,” he said.

The sweeping overhaul follows the Productivity Commission stating parts of NSW’s planning system were failing to deliver economic outcomes and calling for these zones to provide “flexibility, certainty and competition and limit the need for significant spot rezonings”.

Reform is taking place in a two-step process, firstly to Complying Development pathways and Employment Zones later this year. Zones impacted are:

  • Industrial (IN1 General Industrial, IN2 Light Industrial and IN3 Heavy Industrial)
  • Business (B1 Neighbourhood Centre, B2 Local Centre, B5 Business Development, B6 Enterprise Corridor and B7 Business Park)

Mr Gouge also urged impacted landowners to familiarise themselves with the proposed reforms and voice their opinions to the government while they can. Changes regarding the complying and development pathways are on display until May 9.

“It is clear there has been extensive analysis done by the Department,” Mr Gouge said. “Given the level of detail in the reforms, it is crucial for landowners within employment zones to ensure they provide their feedback to the department.” 

The proposed changes to the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (Codes SEPP) will make it easier for businesses in industrial and business zones to set up new premises, change or add additional uses, build and renovate and operate longer hours without the need for a development application, NSW Minister for Planning and Public Spaces Rob Stokes said.

“Complying development saves businesses time by removing the need for lengthy planning approvals for development where the impacts can be managed by meeting the rules set out in the policy,” Mr Stokes said.

 These $4.8 billion in economic benefit unlocked by the reforms would result from capital investment value plus time and opportunity cost savings for industry, he said. Key changes that will see the creation of more allowable land uses, larger buildings and the removal of outdated or restrictive provisions are currently on exhibition for community feedback. These include:

  • allowing businesses to operate from 7am-10pm in business zones or 24-hours in industrial zones regardless of their consent conditions;
  • allowing new uses to be set up such as function centres, medical facilities, food and drink venues without the need for a development application;
  • reducing duplication and simplifying planning documents needed to set up or change business uses;
  • making it easier for businesses to reconfigure parking lots, set up drive through ‘click and collect’ bays and areas for no-contact pick up;
  • increasing height and floor space limits to account for larger buildings needed in today’s warehousing and manufacturing sectors;
  • allowing data centres to be set up as complying development subject to strict conditions;
  • introducing a design guide for specific developments like data centres, car showrooms, shops and offices; and
  • introducing an opt-in for councils to master plan complying development in business and industrial zones in their areas.

Data centres and warehouses have been singled out for accelerated assessment due their growth in importance over the past year. The pandemic led to greater use of e-commerce, remote working and cloud storage which in turn resulted in increased need for data centres and warehouses. More facilities will now be classified as State Significant Development (SSD) as the government has lowered the assessment threshold from $50 million to $30 million allowing them to be pushed through the system more quickly.

Mr Gouge, a planning specialist who assists stakeholders in understanding the planning and zoning processes, said he would also be closely observing local government reaction to the current proposals. “It will be interesting to see how Councils react to the proposed changes which will remove some of their responsibility with regards to assessing developments and enable increased height in industrial zones without the need for councils support to a planning proposal.”