Amendment VC257: What does it actually mean?

With the gazettal of Amendment VC257, Victoria has two new planning ‘tools’ to “support housing growth in and around activity centres and other well-serviced locations in line with Victoria’s Housing Statement: The Decade Ahead 2024-2034 (Victoria’s Housing Statement).” ^[1]

These tools are the:

1. Housing Choice and Transport Zone (HCTZ)
2. Built Form Overlay (BFO).

The HCTZ will facilitate a diversity of housing at increased densities in locations around identified activity centres and other well-serviced locations with convenient access to jobs, public transport and services. The BFO and accompanying local schedules set, and will further set, specific design and built form requirements to facilitate the preferred scale of development in identified activity centres and priority precincts. Together they are intended to “provide certainty to communities, land owners and the development industry and support a streamlined assessment process for applications that will contribute to addressing Victoria’s current and urgent housing supply and affordability needs”. ^[2]

While Amendment VC257 makes no mention of the ‘Townhouse and Low-Rise Code’ (the Code) or the ‘4 Storey Apartment Standards’ (Apartment Standards), the details of which are yet to be released but are expected to be gazetted in early March, it is clear that the Code and Apartment Standards will also play a significant complementary role in supporting “significant housing supply across Melbourne and regional Victoria”. ^[3]

This article provides early commentary on how these two new planning ‘tools’ will operate to shape future decision making and third party participation, while commentary on the Code and the Apartment Standards will be shared once the details are known.

The Housing Choice and Transport Zone (HCTZ)

While we generally know from previously published statements where this new residential zone will be applied and which residential zone it will replace, Amendment VC257 only sets the framework for its implementation.

Mapping

The new zone will need to be ‘mapped’ to show its location (broadly around the activity centres and close to employment services and public transport) and which residential zone it will replace (almost certainly the General Residential Zone and/or the Neighbourhood Residential Zone). When mapped, the HCTZ will appear as the last of the residential zones (as clause 32.10) but in truth it will sit somewhere between the Mixed Use Zone and the Residential Growth Zone in the hierarchy of residential zones in terms of what it permits as land uses (as of right and with a planning permit) and intensity of development.

Noteworthy features of the HCTZ

The planning scheme will designate the HCTZ as either a HCTZ1 or HTCZ2. A dwelling, small second dwelling or residential building on a large site in HCTZ1 will be limited to a height of 21.5 metres and six storeys (13.5 metres and four storeys on a non-large site). In HCTZ2, such buildings are limited to a height of 13.5 metres and four storeys (and 11 metres and three storeys on a non-large site). The usual allowances for land slope, water inundation, pre-existing buildings and existing buildings on abutting allotments apply as they do in the other residential zones. As with the other residential zones, the maximum building heights do not apply to buildings or works that are not a dwelling, a small second dwelling or a residential building.

The table of uses of the HCTZ and the general decision guidelines of the HCTZ largely replicate those of the Residential Growth Zone (RGZ), although we note that the overlooking and overshadowing impacts on adjoining land in a residential zone is a general decision guideline in the HCTZ but not the RGZ and that, unlike the RGZ, the HCTZ does not include a decision guideline as to whether the construction of one dwelling on a lot, is an under-utilisation of the lot.

Other than for an application to subdivide land, the HCTZ contains no exemption from the notice requirements of section 52(1)(a), (b) and (d), the decision requirements of section 64(1), (2) and (3) or the review rights of section 82(1) of the Act. Unlike the Mixed Use Zone it does not make provision for exemptions to apply to other types of applications.

Differences between the HCTZ and other urban residential zones

• Aside from the Residential Growth Zone, the HCTZ is the only urban residential zone that makes no mention of neighbourhood character in its stated purpose
• It will be the only residential zone that makes no provision to authorise or compel objectives by a schedule to the zone
• It will be the only urban residential zone that does not provide for a variation to the maximum building height of a dwelling, small second dwelling or residential building
• It will be the only residential zone that prescribes different maximum building heights and storeys based on whether the land is a “large site” (1000 square metres or more and a frontage of at least 20 metres) or not a large site
• It will be the only residential zone that does not provide for variation of the clause 54 and clause 55 standards (Perhaps that is a precursor to that provision being amended or removed from all the residential zones when the Code is implemented in March).

The Built Form Overlay

Like the HCTZ, Amendment VC257 sets the framework for the implementation of the BFO.

Mapping and schedule

Implementation will require the overlay to be mapped and a schedule added. The schedule will presumably be left to the relevant Council (planning authority) to populate within the framework of the umbrella provision but this may be wishful thinking.

Role of the BFO

Among the purposes of the BFO is to facilitate “higher density development”, “deliver public realm improvements, and where appropriate, additional public benefits in conjunction with new development”, “encourage a diversity of housing types and affordable housing” and to “identify areas where specific design and built form requirements apply.

The umbrella provision leaves it to a schedule to, among other matters, specify:

• development objectives (this is optional)
• a development framework (mandatory)
• land to which “the master plan requirements in clause 43.06-3 apply” (optional)
• whether the outcomes and standards of the overlay are to prevail over any other inconsistent provision in the planning scheme (optional)
• outcomes, standards and decision guidelines additional to the outcomes, standards and decision guidelines contained in the umbrella provision (optional)
• any outcome or standard which is not to apply (optional)
• any additional standards for any outcome (optional)
• decision guidelines for any outcome in the overlay (optional)
• outcomes, standards and decision guidelines “for any other matter relating to the design or built form” (optional)
• which mandatory standard can only be exceeded if a public benefit is provided (optional)
• public benefits and how they are to be calculated (optional)
• exceptions to the need for a planning permit for buildings and works (optional)
• any requirement relating to the subdivision of land (optional)
• a contribution for public open space where land is subdivided (optional)
• any additional application requirements for buildings and works or subdivision (optional)
• any additional decision guidelines
• additional requirements for the development of land for signs (optional)
• transitional provisions (optional)
• a floor area ratio for a site “for the purposes of standard BF03” (optional)

If a schedule to the overlay specifies a floor area ratio for a site for the purposes of standard BF03, in deciding to grant a permit for the development of part of that site, unless a schedule to this overlay specifies otherwise, the responsible authority must include a condition that requires the owner of the land to enter into an agreement with the responsible authority under section 173 of the Act, in a form to the satisfaction of the responsible authority, that specifies a floor area ratio that applies to the development of the balance of the site.

It would be readily apparent that the list of matters left to be specified in a schedule to the overlay (most optional, some mandatory) is extensive. Much of the ‘heavy lifting’ and customising is left for the schedule. It is therefore a matter of ‘wait and see’ before the full impact of the BFO can be considered.

Noteworthy features of the BFO

That said, the BFO contains a number of significant aspects worthy of comment.

1. The exemption from notice, decision requirements and review
In short, where the BFO has been applied, an “application under any provision of this planning scheme to construct a building or to construct or carry out works, or to subdivide land, is exempt from the notice requirements of section 52(1)(a), (b) and (d), the decision requirements of section 64(1), (2) and (3) and the review rights of section 82(1) of the Act. This is not, however, a blanket exemption. This is because the overlay goes on to add “unless a schedule to this overlay specifies otherwise”. This is to the best of our knowledge one of few VPP provisions which gives the planning authority the option of specifying whether the umbrella exemption from notice, decision requirements and review applies.

2. Its own outcomes, standards and decision guidelines (in addition to those which may be specified in a schedule to the overlay)
Where a standard is set out in the umbrella BFO, the standard is identified as either a discretionary standard (identified by the expression “should” or labelled “discretionary) or a mandatory standard (expressed as “must” or labelled “mandatory”). A standard added by a schedule to the overlay is required to specify whether it is a discretionary standard or a mandatory standard.

An “outcome” is the expectation of what will be achieved in a development. A “standard” is the measure or condition related to the corresponding outcome. A “decision guideline” is a matter the responsible authority must consider before deciding if an outcome is met.

The BFO requires all outcomes specified in the overlay or in a schedule to the overlay to be met, all mandatory standards must be met, and any discretionary standard should also be met.

2 (a) Meeting standards and outcomes
The umbrella BFO stipulates the following with regard to standards and outcomes:

A standard (whether a mandatory or discretionary standard) may also be nominated as a deemed to comply standard, using ‘complies if’ or labelled as ‘deemed to comply’.

If a mandatory or discretionary standard is met, the corresponding outcome may be met.

If a deemed to comply standard (whether a mandatory or discretionary standard) is met, the corresponding outcome is deemed to have been met and the responsible authority must not consider, and is exempt from considering, any decision guidelines corresponding to that outcome

Hence, the design and built form standards do not automatically operate such that compliance with a standard is deemed to meet the corresponding outcome. The standard itself (whether it be in the umbrella overlay or a schedule) needs to stipulate that compliance with a standard is deemed to meet the outcome. Without that stipulation, the BFO says that meeting the standard “may” meet the outcome. Deciding whether a non-deemed to comply standard meets the outcome sought is left to the responsible authority with consideration to the decision guidelines.

The above is perhaps not the easiest of stipulations to unravel. We notice that none of the standards specified in the umbrella overlay use the words “complies if” or are labelled “deemed to comply”. This means that, at least in so far as the standards in the umbrella overlay are concerned, compliance with the standard does not mean the outcome is met. And, as indicated in the overlay, this is so even where the standard is identified as a mandatory standard.

2 (b) Discretionary and mandatory standards
There are too many outcomes and standards in the umbrella overlay to provide useful commentary on each. However, it is relatively straightforward to identify the mandatory standards from the discretionary standards. The majority of standards are discretionary standards.

Discretionary standards would be difficult to make deemed to comply standards because the very way they are worded makes it very difficult to say that a standard is met. Take, for example, part of standard BF14, which is directed at the building services outcome. The standard stipulates that service cabinets should “not visually dominate street frontages”. Whether something visually dominates something else is of course a matter of judgment and not something that can be readily measured for the purposes of any deemed to comply provision.

A little concerning is that the mandatory standard applying to the ‘building typology and future character’ outcome requires an element of judgment and is thereby open to debate. Standard BF01 is the standard applying to the building typology and future character outcome. It reads: “Development must be consistent with the urban structure, building typologies and future character for the land in the development framework”. The development framework referred to in standard BF01 is the development framework which every schedule to the BFO must contain. It will likely be (or at least ought to be) a combination of maps, plans, character statements and tables dealing with building typology, future character, public realm, and sensitive interfaces - to identify but a few of the matters which the umbrella overlay indicates the development plan may include.

While the meaning of “consistent with” is open to debate, readers will know that the question of whether a plan is consistent with an approved document under a planning scheme has been the subject of many Court and Tribunal decisions. Clearly, work needs to be done at the ‘front end’ to include the requisite specificity and detail to enable compliance with the mandatory standard to be determined.

In a similar vein, if a schedule to the BFO specifies that a master plan is required, the master plan must be prepared to the satisfaction of the responsible authority before a permit of any sort under the overlay may be granted and any permit granted must be generally in accordance with the master plan. The overlay lists the matters a master plan must describe and includes any other requirements a schedule may specify

3. A public space contribution requirement
It is somewhat surprising to find a public open space contribution requirement in a built form overlay. Nevertheless, the BFO makes provision for a schedule to do just that. If the planning scheme already contains a public open space contribution requirement (currently in clause 53.01) and a schedule to the BFO is used to specify its own public open space contribution, the public open space requirement elsewhere in the planning scheme does not apply (although the exemptions continue to apply to the BFO requirement).

It isn’t clear why it was thought necessary or desirable for the BFO to make provision for its own public open space contribution, as there seems to be no reason the same could not be achieved by a schedule to clause 53.01. We presume it was thought beneficial to keep built form requirements and public open space requirements together. It is not a case of the BFO expanding the scope of the public open space contribution to extend to developments that generate a need for more public open space but do not involve subdivision (eg builds to rent). It remains the case that a public open space contribution is limited to cases where a “person proposes to subdivide land”.

4. A public benefit uplift framework
We conclude the commentary with the “public benefit uplift framework”. It provides that:

A schedule to this overlay may specify a mandatory standard that can only be exceeded if a public benefit is provided.

A schedule may set out public benefits and how they are to be calculated. Public benefits may include:

• Affordable housing.
• Public realm works.
• Public open space.
• Strategic land uses.
• Any other works, services or facilities that benefit the community living in, working in or visiting the area to which this overlay applies.

When granting a planning permit to construct a building or construct or carry out works that exceeds a standard on the basis that a public benefit will be provided, the responsible authority must include a condition that requires the provision of the benefit to be secured by an agreement made under section 173 of the Act.

Again, as with a large part of the BFO, the details of the public benefit uplift are left to the schedule. The schedule will specify whether a public uplift benefit can be applied and, if it is applied, how it is calculated and by what means it will be provided.

It is a little awkward to be describing the public benefit as applying where a mandatory standard is “exceeded”. Exceeded ordinarily means where something is done or will be done which is more than is required. .

In any event, as noted above, there are very few mandatory standards in the umbrella BFO and any mandatory standards that are proposed to be added by a schedule are yet to be drafted.

In conclusion

Amendment VC257 has established the framework for two new planning ‘tools’ to:

• guide and to some extent dictate planning decisions
• to exempt inconsistent parts of the planning scheme
• to exempt rights to notice, the decision requirements and rights review.

Where the BFO is concerned, the manner in which the approval of buildings and works will be determined in a given planning scheme, will depend on the yet to be drafted and incorporated schedules to the overlay. The development framework plan - a mandatory requirement of every schedule and the basis upon which meeting standard BF01 is to ‘measured’ - is obviously an important part on how the BFO will determine permit applications. Aside from this important, first step, there is still much work to do to map where the BFO is to be applied and to populate the schedules to the overlay.

_{1. Explanatory Report to Amendment VC257}

_{2. Explanatory Report to Amendment VC257}

_{3. Premier Allan media release 25 February 2025}