In this article, we take a look at some of the key proposals outlined in the Paper which are aimed at addressing the inefficiencies in and frequent concerns raised about the existing process.

Submissions in response to the Paper are open until 28 February 2022.

The need for a change

One of the key issues identified in the Paper, and an experience that many have, is that it can take several years to finalise a rezoning. For example, the average end-to-end processing times rose to an average of 114 weeks in 2019 (page 8, Paper). It also notes that uncertainty about rezoning timeframes and process can affect developer confidence and the overall viability of projects, or the timing of housing supply.

Conversely, feedback received from councils has been that they do not have adequate resourcing and funding for strategic planning, assessing and progressing planning proposals, or for taking part in court proceedings. As a result, strategic planning documents may not be as good as they could be. Spot rezonings are then used to 'fill the gaps' to provide land for housing and jobs, for example. Councils also have varying human and financial resources, which can make processes longer and inconsistent (see p 10, Paper).

As a result, the Government has sought to develop a new approach for rezonings, designed to align more closely with the development application process.

Key changes

Some of the key changes proposed in the Paper include:

Timeframes

The Paper proposes timeframes for completing each step in the rezoning process. The relevant timeframes will depend on the 'category' of the rezoning application which would be determined during a pre-lodgement process, including basic, standard and complex applications.

New roles

The Paper proposes that the role of parties in the rezoning process be clarified and changed. This includes recognising private proponents as applicants, as they are in the development application process. This would give the private proponent the right to, for example, meet with the rezoning authority to discuss a potential request and submit a rezoning application.

For private proponent rezoning applications, councils would be given control of the process, including giving permission to exhibit (currently given by a gateway determination). Councils would also review any changes after exhibition and make the final decision.

The DPE would then focus on 'state-led' and strategic planning, for example. The Minister (via the DPE) would generally no longer assess or determine private proponent rezoning applications.

Rezoning applications would be required to be lodged and progressed through the NSW Planning Portal, allowing DPE to monitor the rezoning process and to provide greater transparency.

Referrals to State agencies

Changes will be proposed to the agency referral process for rezoning applications noting the impact that referrals can have on timeframes and certainty. This will include that, for example:

• there be clear direction about the circumstances in which an agency referral is required

• Proponents will have clear direction about the information they must give to agencies

• state agencies will have clarity about the appropriate level of assessment for rezoning applications

• strict timeframes for agency responses will be set and the ability for a rezoning authority to continue to progress and determine an application where an agency has not responded within the timeframe.

Scoping

Other than for basic rezoning applications, proponents will be required to undergo a scoping process before lodging a rezoning application. Feedback would then be provided on, for example, the application’s consistency with strategic planning, any recommended changes and the information that should accompany the application.

Fee structures

The Paper outlines three options being considered for an assessment fee structure to cover the costs of the merit assessment and any associated work to make the plan. This includes looking at fixed or variable fee structures, or a combination of the two.

Options are also being considered for the introduction of a 'planning guarantee' which would provide for a fee refund if councils take too long to assess a rezoning application.

New appeals process

One of the most significant, eagerly anticipated and controversial changes to the rezoning process which has been flagged in the Government’s package of planning reforms is a possible merit appeal right to the Land and Environment Court for rezoning applications.

Certainly, industry groups are eager to see an appeals process introduced which would provide an avenue to 'de-politicise' rezoning applications and to resolve issues in the process through a neutral third party. However, creating an appeal right for a rezoning application would not be straightforward and would require the relevant appeal body to have the resources and necessary expertise to be able to determine a rezoning application.

The Paper discusses the pros and cons for possible review mechanisms for rezoning disputes, being:

• a merits review appeal to the Land and Environment Court; or
• for the Independent Planning Commission to conduct reviews.

At this stage, the Paper seeks feedback on whether there should be an appeal mechanism and if so, which option would be the most appropriate.

Key takeaways

Given the significant costs involved and delays currently being experienced in the rezoning process, proponents will welcome any changes which improve timeframes and provide more certainty and accountability. However, expanding the roles and responsibilities of councils will likely to cause strain on local councils and their limited resources. It will be important to ensure that the right balance can be struck.

The DPE is currently seeking feedback on the Paper until 28 February 2022. Submissions can be made via the NSW Planning Portal.