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NSW Department of Planning, Industry and Environment
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Ministerial Media Release

More transparency for council value capture deals

  • Date: 04.11.2016
  • Type: Ministerial Media Release
  • Author: The Hon. Rob Stokes MP, Minister for Planning

Value capture deals negotiated by councils with developers are to be made more transparent amid growing concerns the process is pushing up new apartment prices.

 

Planning Minister Rob Stokes announced today during a speech to the Property Council of Australia that amendments to the Environmental Planning and Assessment Act will put in place tighter controls on how the deals, known as Voluntary Planning Agreements (VPAs), are arranged.

 

Changes to the VPA system will be a feature of planning reforms to be released shortly.

 

Mr Stokes said the government supports VPAs but there is growing concern that the development industry is “being held to ransom” by some councils demanding excessive sums without any identifiable infrastructure plans.

 

“Industry has raised concerns about the lack of consistency and the practice of councils with voluntary planning agreements,” Mr Stokes said.

 

“In certain circumstances we have a case where assessment process are being held to ransom, increasing costs for new homes by thousands of dollars – a cost being borne, in the end, by home buyers,” he said.

 

“Often, the money is used to cross subsidise other areas of local government, rather being used for what it’s meant for – local infrastructure.”

Quotation

Often, the money is used to cross subsidise other areas of local government, rather being used for what it’s meant for – local infrastructure.

- Rob Stokes

VPAs are a mechanism under Section 93F of the Environment Planning and Assessment Act available to councils to secure funding for infrastructure as part of a planning proposal or development application.

The proposed changes would encourage councils and developers to work together from the outset of a development proposal, considering what infrastructure is needed in the local areas to support development, and how much it will cost.

Mr Stokes said a developer and a council should enter into a VPA voluntarily, based on agreed public benefits associated with new development.

“Councils should be able to capture a reasonable share of the uplift in value from a rezoning, to help pay for community facilities and amenities,” he said.

“However, there needs to checks and balances.”

The Ministerial direction, Practice Note and Planning Circular are now on public exhibition until late January 2017 with opportunity for public submissions.

 

For more information, please visit the Infrastructure policies page.