LGPA Submission on Draft SPP3.6 – Development Contributions for Infrastructure

LGPA Submission on Draft SPP3.6 – Development Contributions for Infrastructure

The Local Government Planners’ Association (LGPA) is a professional association comprising local government planners and related consultants, public servants and others, interested in the promotion of sound local planning. The LGPA has significant exposure to a range of industry issues through our members, comprising a significant local government representation, and is therefore well placed to present our views on the draft State Planning Policy 3.6 – Infrastructure Contributions (‘the Policy’).

We have undertaken a review of the Policy, and wish to provide the following specific comments for your consideration in finalising the draft.

Appropriateness for infill development – Infill development is a strategic priority of the State Government and has its own unique set of considerations and challenges. A developer contribution plan – such as that contemplated by the existing (and proposed) SPP 3.6 framework is an inappropriate tool for funding infrastructure in an infill setting. Need and nexus between infill development cannot be established in an equitable way due to:

  • The assumptions about development scale, rates of development and land use in an infill environment is significantly less certain than in a greenfield context;
  • Determining that new development (as opposed to existing or surrounding development in the locality) directly causes ‘need’ is difficult;
  • Some large scale infrastructure to support sustainable and appropriate infill development requires pre-funding. It is unreasonable to expect local governments to make such long term commitments to capital works without greater certainty as to when a Developer Contribution Plan might reimburse these costs;
  • Applying a DCP model such as that of the existing (and proposed) SPP 3.6 framework to an infill setting provides a direct disincentive for infill development to occur. It is recognised that infill development is already an extremely challenging prospect and creating more barriers will further undermine the objectives of Perth and Peel @ 3.5 million.

Recommendations

  • The existing (and proposed) SPP 3.6 framework should not be used to leverage infrastructure contributions for infill settings.
  • Development of a separate infrastructure contributions policy that is fit-for-purpose to infill development.
  • The challenges in applying the existing (and proposed) SPP 3.6 framework to infill development is also highlighted in a number of the specific items outlined below.

Maximum levy for Community Infrastructure – Section 6.6 b) of the draft Policy draft proposes to introduce a maximum levy for community infrastructure and includes a maximum levy of $2,500 per dwelling for local infrastructure, or up to $3,500 per dwelling where district and/or regional infrastructure is also proposed.

The basis of developer contribution plans has long been grounded on the established principle of ‘user pays’. Any gap between and actual cost of community infrastructure will need to be funded by the local government (ie. its ratepayers). It is not consistent with the concept of ‘need and nexus’ for an entire ratepayer base to part-fund a facility whose need may be generated by growth of a localised community.

The need to part-fund infrastructure through means other than a DCP has broader implications for a local government’s finances which may result in timing delays in the provision of infrastructure and could result in scaling-back of community facilities that do not truly reflect the need. Both consequences will lead to less than ideal outcomes for communities.

Section 6.6 b) of draft Policy is unclear how the figures included in the policy have been determined. In the absence of this detail it is difficult to provide specific comment on their appropriateness.

Recommendations

  • No maximum levy for community infrastructure – allow contributions to be determined based on actual need and nexus reflective of each individual development contribution plan.
  • Further clarification be provided on how the $2,500 / $3,500 per dwelling figures have been derived.

Metric for Community Infrastructure – Section 6.6 b) of draft policy proposes to introduce a maximum levy based on a contribution ‘per dwelling’. This single option by which to levy contributions for community infrastructure may be suitable for greenfield settings, but is not appropriate for others such as infill development.

Infill development scenarios can be made up of areas that are significantly fragmented land ownership arrangements. In view of this large degree of fragmentation it is difficult to predict the overall dwelling yield for an infill area which would then be used to determine the dollar contribution per dwelling. Moreover, a ‘per dwelling’ contribution in an infill setting may actually discourage developers from maximising the dwelling yield potential of their site, undermining the strategic objective of infill development. It may be more suitable to allow contributions in infill settings to be determined on a square metre or per hectare. This would provide a more certain and equitable base from which to determine the contribution requirements and may also encourage maximum yield take up as developers would not be ‘penalised’ by including more dwellings in a development.

Recommendation

  • Include a range of unit of charge options where the most relevant can be implemented when preparing a DCP.

Annual Review of Infrastructure Costs – Section 6.7.2.3 d) and Section 6.7.2.13 of the draft Policy requires a review of infrastructure cost estimates to be undertaken annually.

Whilst draft SPP 3.6 includes guidance on indexation and action to be undertaken in instances where there is a substantial reduction in the cost contribution liability, it is not clear as to whether the DCP is required to be updated to reflect the outcomes of an annual review.

If the expectation is that the DCP is updated annually as a consequence of an annual review there is likely to be practical implications associated with this.

Any updates to a DCP would be made via an amendment to the local planning scheme. There are processes and timeframes associated with an amendment particularly as the Planning and Development (Local Planning Schemes) Regulations 2015 would classify any such updates as a ‘complex amendment’ to a local planning scheme.

The complex amendment process typically takes 9 to 12 months. Additional lead in time would also be required to undertake the annual review itself to determine whether updates to the DCP are required. As a result it is entirely possible that the next annual review of infrastructure cost estimates is due prior to the process associated with a preceding review being finalised.

Recommendations

  • Clarify the administrative expectations of an annual review.
  • Consider the practical implications of implementing outcomes of an annual review.

Early Acquisition of Public Purpose Sites – Section 6.7.2.10 of draft Policy notes that priority should be given to the acquisition of land for public purposes in the early stages of the development process.

The draft Policy also states that consideration is to be given by the local government to requests from landowners for early acquisition of land in cases of hardship, where land is identified for public open space in the DCP area.

Whilst the principle of early acquisition of land in cases of hardship is acknowledged, the local government should not be agency that acquires (and pays for) the land in question.

In most circumstances public open space is ceded to the Crown and the local government becomes the management body. The requirement for local government to acquire sites merely introduces an unnecessary layer into the land transaction process. In such a scenario the local government would acquire the land from the private landowner and then subsequently cede the land to the Crown.  It would be more efficient if the land transaction took place directly between the landowner and the Department of Planning, Lands and Heritage.

In addition to the inefficiencies this provision creates, it also burdens the local government with the need to fund the acquisition of land that it will ultimately not be the owner of. Whilst it is recognised that the local government will ultimately be ‘paid back’ through contributions made, the requirement to acquire would have a detrimental impact on the local government’s cash flow and impede its ability to deliver other services to its community.

Recommendation

  • The Department of Planning, Lands and Heritage (and not local government) be the agency responsible for the early acquisition of public open space sites in cases of financial hardship.

Timing of DCPs to Align with Comprehensive Planning – Section 6.7.6.6 of the draft Policy notes that a DCP should be prepared concurrently with, or within 6 months following the approval of a structure plan to ensure that the DCP has been prepared ahead of subdivision and development.

DCPs are complex planning instruments that take significant time to prepare and implement. If the expectation of this provision is that the preparation of a DCP commences within 6 months of a structure plan’s approval, it would be quite some time before the DCP could actually be used to begin collecting contributions.

This could lead to subdivision and development of a structure plan area occurring prior to the implementation of a DCP and therefore proceeding without the need to make a contribution which could result in a gap in the DCP funding or an inequitable application of contribution requirements.

Recommendation

  • Require the finalisation of a DCP concurrently with the approval of local structure plans in circumstances where cost-sharing arrangements are required.

Infrastructure Contributions Not to be Imposed as a Condition of Rezoning – Section 6.8 of the draft Policy states that local governments may not impose infrastructure contributions beyond the scope of WAPC policy as conditions or prerequisites for rezoning.

It is unclear as to how this could even occur given final decisions on rezoning proposals are the responsibility of the WAPC and Minister. Notwithstanding, in the interests of transparency, local government should be able to raise matters regarding infrastructure funding and signal an intent to implement a DCP as early as possible – rezoning of land is considered to be an appropriate time for this to occur.

Recommendation

  • The rezoning process should allow for local government to identify the need for cost-sharing arrangements.

Requirements of a DCP – Section 6.7.2.3 of the draft Policy requires DCP infrastructure items to be included in a local government strategic community plan and capital works program.

Typically a local government’s strategic community plan and capital works program is based on a 5 year forecast.

As a result there is a disconnect between the lifespan of a DCP and a local government’s strategic community plan or capital works program whereby an infrastructure item may appear in a DCP but would not be included in a strategic community plan or capital works program until some time later.

Recommendation

  • Clarify that DCP infrastructure items be included in a local government strategic community plan and capital works program such that the timing of delivery aligns between all documents.

DCP Items – Schedules 1 and 2 of the draft Policy includes standard infrastructure requirements for development infrastructure and items that can be included for community infrastructure.

Development of Public Open Space – Item 2 of Schedule 1 states that additional facilities for public open space may be provided at the discretion of the landowner/developer.

The consequences of this are unclear in the event the landowner/developer seeks to provide additional facilities above and beyond the intent of the DCP for the public open space in question. It is possible that the landowner/developer may seek extra credit for these additional facilities creating inequity across the DCP participants.

Allowing additional facilities to be provided at the discretion of the landowner/developer only also places local government in a difficult position of potentially inheriting an added maintenance burden for facilities it may not be supportive of.

Recommendation

  • That Item 2 of Schedule 1 be updated to include reference that additional facilities for public open space may be provided at the discretion of the landowner/developer and in agreement with the local government.

Sustainable Transport – Item 13 of Schedule 1 states that streetscape and public realm upgrades are appropriate infrastructure items to be included, but only where comprehensive planning has been undertaken and requirements are set out in a structure plan, or similar planning instrument.

The inclusion of streetscape and public realm upgrades as an infrastructure item is supported, and it is likely this will be most relevant in infill settings. The reference to structure plans is however confusing as most infill settings are planned through local planning/housing strategies and scheme provisions.

Recommendation

  • That reference to structure plans is removed from Item 13 of Schedule 1.

Foreshore Reserves – Item 3 of Schedule 2 includes foreshore reserves as a community infrastructure item.

There is an already established practice of acquisition of foreshore reserves whereby the usual requirement is that these are ceded free of cost at subdivision.

The acquisition of foreshore reserves through a DCP unnecessarily introduces an additional infrastructure item that could increase the unit of charge for community infrastructure items of a DCP.  This could become particularly onerous and expose local government to funding any DCP shortfall given draft SPP 3.6 also seeks to impose a maximum levy on community infrastructure.

Recommendation

  • Delete Item 3 of Schedule 2 (Foreshore Reserves) from items for inclusion in a DCP.

We appreciate the opportunity to comment on this significant policy reform, and welcome any opportunity to discuss our comments further with the Department and or WAPC.  Should you require any further advice or information, please contact Joslin Colli by email joslin@planningwa.com

Yours faithfully

Joslin Colli

LGPA PRESIDENT

2019-09-03T13:07:07+08:00