Sweeping changes to Victoria’s Planning System

On Wednesday 20 September 2023, the Victorian Government released the much anticipated Victorian Housing Statement for The Decade Ahead (2024-2034) (the Statement). The Statement aims to facilitate an extra 250,000 homes in Victoria over the next decade.

The Statement sets out a number of planning and housing policy changes, prioritising precincts including East Werribee, Sunshine, Footscray, Fishermans Bend, Docklands, Arden, Parkville and Richmond. However, the Statement also sets out a “whole of state” approach, seeking to expand Plan Melbourne to cover the whole state, and update it to reflect a target of 70% of new homes to be built in established areas.

At a high level, the key planning changes it proposes include:

1. The introduction of a dedicated team to assist in relation to housing permit applications to reduce backlog in VCAT;
2. Expansion of the Development Facilitation Program (see Amendment VC242);
3. Changes to planning controls to increase housing in 10 activity centres;
4. The expansion of permit exemptions, including for second homes of under 60m² on the same lot, as well as extensions to sheds and carports;
5. The expansion of Future Homes (see Amendment VC243);
6. The introduction of a range of “deemed to comply” residential standards (see Amendment VC243);
7. Changes to the types of housing requiring a permit (see Amendment VC243);
8. Rezoning “surplus government land” across 45 sites in metropolitan Melbourne and regional Victoria;
9. Expansion of VCAT’s powers to dismiss matters which do not have a prospect of success; and
10. Allowing Planning Pannel to join parties and carry out hearings on the papers.

The Statement also seeks to improve housing affordability through other policy levers, including:

1. The introduction of a Short Stay levy of 7.5%, with revenue from the levy going to Homes Victora;
2. Additional funding for the Victorian Homebuyer Fund;
3. The introduction of an Institutional Investment Framework to facilitate investment in long-term rental properties and build-to-sell developments;
4. A funding for basic infrastructure in growth corridors, through the Growth Areas Public Transport Fund and Building New Communities Fund;
5. Further investment in the Regional Housing Fund, Regional Worker Accommodation Fund, Big Housing Build, Social Housing Accelerator, Public Housing Renewal Program and Affordable Housing Investment Partnership;
6. The redevelopment of Melbourne’s high rise public housing estates by 2051;
7. The introduction of new rental policies, including the introduction of a “portable bond” scheme, penalties for underquoting, and banning rental bidding; and
8. The establishment of the Rental Dispute Resolution Victoria.

Following the release of the Statement, two amendments to Planning Schemes have been gazetted:
Amendment VC242 and Amendment VC243.

Amendment VC242 – Development Facilitation Program

Amendment VC242 was gazetted on 20 September 2023. It expands the existing Development Facilitation Program to expedite planning approvals for commercial projects that will provide a significant contribution to Victoria’s economy and provide substantial public benefit and significant residential projects that will increase affordable housing through the introduction of two voluntary new pathways in the Victorian Planning Provisions (VPPs). Importantly, the Amendment varies clause 73.01, making the Minister for Planning the Responsible Authority for an application under those new pathways.

Clause 53.22 (Significant economic development)

This clause seeks to prioritise and facilitate the planning, assessment, and delivery of significant non-residential projects in a number of categories, including:

• Category 1 – projects which contemplate the uses set out in the clause with the corresponding construction costs, with the likely financial feasibility of the project confirmed by Invest Victoria;
• Category 2 – projects carried out by, with, or with funding from the State or a public authority; and
• Category 3 – projects considered by the Minister for Planning to be significant, having regard to the estimated cost of development.

Clause 53.23 (Significant residential development with affordable housing)

This clause seeks to facilitate residential development that includes affordable housing and the redevelopment and renewal of public housing stock in a number of categories, as follows:

• Category 1 – developments with a construction cost of over $50 million in metropolitan Melbourne or $15 million outside of metropolitan Melbourne which provide at least 10% of the total number of dwellings as affordable housing;
• Category 2 – projects carried out by, with, or with funding from the State or a public authority which provide at least 10% of the total number of dwellings as affordable housing; and
• Category 3 – projects considered by the Minister for Planning to be significant, having regard to considerations including the percentage of dwellings proposed to be affordable housing, the location of the development in relation to jobs, services, infrastructure and community facilities, and whether the design is exemplary.

Amendment VC242 also amends a number of residential zones to change the types of Retail and Office uses that are as of right or require a permit.

Amendment VC243

Amendment VC243 was gazetted on 22 September 2023. It seeks to:

1. Codify residential development standards;
2. Implement the Future Homes project across Victoria;
3. Remove permit requirements for single dwelling on lots of 300m² or more; and
4. Introduce VicSmart permits for single dwellings on lots less than 300m².

Codification of Residential Development Standards

Amendment VC243 amends Clause 54 (One dwelling on a lot) and Clause 55 (Two or more dwellings on a lot and residential buildings) to provide that if standards, including building height, daylight to existing windows, and overlooking, are met, then the development is deemed to meet the objectives for that standard and the decision guidelines for that standard do not apply to the application.

Future Homes

The streamlined Future Homes planning process was piloted for two years in the City of Maribyrnong and will be made available in all parts of Victoria through the insertion of a new clause in the VPPs – clause 53.24 (Future Homes). Future Homes provides ready-made “exemplar” architectural apartment designs that are capable of an expedited planning process to facilitate an increase of density and diversity of housing.

The Future Homes process is available for sites in the General Residential Zone which are close to existing services and infrastructure. Amendment VC243 amends Clause 72.01 to make the CEO of the relevant municipal council the responsible authority for decisions under Clause 53.24.

Permit Requirements for single dwellings of lots of 300m² or more

Amendment VC243 amends the Township Zone, General Residential Zone and Neighbourhood Residential Zone to remove the requirement for a planning permit to construct or extend one dwelling on a lot of 300m² or more and removes the ability for a schedule to those zones to include that permit requirement.

It also amends those zones to remove the requirement for a planning permit to construct or extend a fence within 3 metres of a street on lots of specified sizes, and removes the ability for a schedule to those zones to include that permit requirement.

VicSmart for single dwellings on lots less than 300m²

Amendment VC243 amends the Mixed Use Zone, Township Zone, Residential Growth Zone, General Residential Zone and Neighbourhood Residential Zone to make an application to construct or extend one dwelling on a lot of less than 300 square metres a VicSmart application class if specified requirements are met.

Next Steps

We will be reviewing these changes in more detail along with further changes in the coming weeks and provide further updates.

HWL Ebsworth Lawyers regularly advises and assists permit applicants, Councils and other authorities on permit applications and VCAT applications. Please do not hesitate to contact us to discuss the implications of the Statement on your potential developments or matters.

This article was written by James Lofting, Partner, Lauren Millington, Solicitor and Mary Pirozek, Solicitor