_RESIDENTIAL ZONE REFORMS UPDATE

Last week there were two significant updates in relation to the residential zone reforms in Victoria.

On Thursday 22 August 2013, the Minister for Planning through Amendment VC104 introduced transitional provisions to the residential zones to ensure that existing planning permit applications are not unfairly disadvantaged by the proposed zones.

Then on Friday 23 August 2013, the City of Glen Eira, through Amendment C110 became the first Municipality to implement the new residential zones into it’s Scheme.

In this edition of the coll-e-bulletin we discuss the residential zone reforms and how they may affect planning and development in Melbourne.

SNAPSHOT OF THE RESIDENTIAL ZONE REFORMS

In July 2013 through Amendment V8 the Minister for Planning introduced a suite of new residential zones, being the Neighbourhood Residential Zone (NRZ), General Residential Zone (GRZ) and Residential Growth Zone (RGZ), to replace the existing Residential 1, 2 and 3 Zones.  These zones were implemented to “reflect the aspirations of all Victorians” and “to provide greater clarity” about development in our suburbs.

Council’s have been given 12 months from 1 July 2013 to implement the new zones or the GRZ will be implemented by default to replace the Residential 1, 2 and 3 Zones.

Appropriate implementation of the new zones will be very important and should be very carefully considered.  If the zones are not applied correctly it could have significant impact on the way Melbourne is developed in the future.

Planning Practice Note 78 (Applying the Residential Zones) outlines the purpose of the new zones and how these zones should be applied.

A summary is provided below in relation to each of the new zones.

Neighbourhood Residential Zone (NRZ)

The NRZ is intended to restrict housing growth in areas identified for urban preservation where there are limited opportunities to increase residential development and where respecting identified neighbourhood character is important.

Key aspects of the NRZ include:

▪                a maximum of two dwellings per lot;

▪                a mandatory height limit of 8 metres;

▪                the ability to have multiple schedules applying to different parts of a municipality that can allow for:

–               a minimum subdivision lot size to be specified;

–               the maximum number of dwellings on a lot to be specified;

–               the maximum building height requirement to be varied;

–               variations to standards outlined by Clause 54 or 55, including in relation to setbacks, site coverage and permeability, private open space, landscaping, walls on boundaries and front fences.

The NRZ is intended for areas where single dwellings prevail and change is not identified, such as areas of identified neighbourhood character or environmental significance.  This includes:

▪                areas where more than 80 per cent of lots accommodate detached dwellings;

▪                areas affected by the Neighbourhood Character Overlay, Heritage Overlay or other environmental or landscape overlays;

▪                areas which may not be supported by transport or other infrastructure.

In the NRZ it is expected that single dwelling development and under some circumstances dual occupancies will occur.

General Residential Zone (GRZ)

The GRZ enables moderate housing growth and diversity.

The GRZ is similar in nature to the Residential 1 Zone in that a maximum height of 9 metres is preferred (but not mandatory) and proposals can be considered for more than two dwellings on a lot, with Clause 54 and 55 used as the key assessment tool when considering residential proposals.

The Schedule to the GRZ allows for:

▪                the ability to set mandatory height limits;

▪                variations to standards outlined by Clause 54 or 55, including in relation to setbacks, site coverage and permeability, private open space, landscaping, walls on boundaries and front fences.

The GRZ is intended for most areas where moderate growth and diversity of housing will occur in a manner consistent with the neighbourhood character.  In these areas a mixture of single dwellings, dual occupancies, some villa units and, in limited circumstances, town houses will occur.

Residential Growth Zone (RGZ)

The RGZ enables new housing growth in appropriate locations.  The RGZ includes a preferred (but not mandatory) height limit of 13.5 metres.

As with the NRZ and GRZ, the schedule to the RGZ allows for the ability to:

▪                set mandatory height limits;

▪                variations to standards outlined by Clause 54 or 55, including in relation to setbacks, site coverage and permeability, private open space, landscaping, walls on boundaries and front fences.

The RGZ is anticipated for appropriate locations near activity centres, train stations and other areas suitable to medium density development.  In the RGZ a mixture of townhouses and apartments are anticipated.

APPLICATION OF THE NEW RESIDENTIAL ZONES

Advisory Note 50 outlines the manner in which it is anticipated that the new residential zones will be implemented.  It outlines three tiers as summarised below.

▪                Tier 1 – Councils with existing policies / strategies that have undergone a process of public exhibition and that can be readily converted into the new zones.  In this circumstance the new zones may be implemented through a Ministerial amendment, without further public consultation.

▪                Tier 2 – Councils with draft policies / strategies that can be readily converted into the new zones.  The implementation of the new zones in these circumstances will include a public consultation process.

▪                Tier 3 – Councils with no relevant policy work will need to develop strategies for implementing the new zones.  The implementation of the new zones in these circumstances will include a public consultation process.

As stated above, if this work is not completed within 12 months from 1 July 2013, then the GRZ will be applied as the default zone.

TRANSITIONAL PROVISIONS

Of the transitional provisions included in the new zones through Amendment V104, the most significant is the provision in the NRZ that the maximum number of dwellings per lot does not apply to an application to construct two or more dwellings on a lot made before the date in which the new zone is approved for each planning scheme.

For example, in relation to the City of Glen Eira, applications for more than two dwellings on a lot within the NRZ can be considered as long as they were submitted before 23 August 2013, the date in which the NRZ was implemented into the Glen Eira Planning Scheme.

CITY OF GLEN EIRA

On the back of existing policies in their planning scheme the City of Glen Eira is the first to implement the new residential zones.  The new zones have been implemented without further public consultation as it was considered that this occurred as part of the process to implement the existing policies into the scheme (notwithstanding that the existing policies were created without consideration to the restrictions now contained in the new zones, and in particular the NRZ).

The following provides a summary of the key features of the new zones in Glen Eira.

▪                The NRZ has been applied to approximately 78 per cent of the Municipality, and includes the following requirements.

–               A maximum of two dwellings per allotment.

–               A maximum height of 8 metres.

–               Maximum site coverage of 50 per cent.

–               Minimum 25 per cent site permeability.

–               Minimum private open space area of 60 square metres.

–               Minimum rear setback of 4 metres.

▪                The GRZ has been applied to approximately 15 per cent of the Municipality adjacent to activity centres and roads with tram lines.  Three different schedules have been applied to the GRZ areas, outlining the following requirements.

–               A maximum height of 10.5 metres.

–               For land along roads with tramlines and identified residential infill sites, where abutting a property in the NRZ a rear setback at ground floor of 4 metres, 5.5 metres at first floor and 11.5 metres at second floor level.

▪                The RGZ has been applied to approximately 2 per cent of the Municipality.  A maximum height of 13.5 metres has been identified for these areas.

The application of these zones is based on the Minimal Change and Housing Diversity Areas that have existed in the Glen Eira Planning Scheme.  They do not appear to have considered matters outlined by Practice Note 78 and Advisory Note 50, such as whether areas are affected by overlays.

In our opinion application of the NRZ across the majority of the Municipality is not consistent with the general tone of the Practice and Advisory Notes.  Furthermore, application of the NRZ unreasonably restricts the development potential of many areas within Glen Eira that would otherwise be considered appropriate for redevelopment.

For example, parts of Dudley Street in Caulfield East have been included in the NRZ.  This is despite there being no overlays affecting the street and East Caulfield Reserve being located on the north side of the street.  In addition, Caulfield Train Station is approximately 500 metres walking distance away and it is only approximately 300 metres walking distance from Monash University.  Multi-storey apartment and townhouse developments are also located in the street.  Despite all of these characteristics that otherwise would be seen to encourage appropriate redevelopment of Dudley Street, properties in this street can now be developed with a maximum of two dwellings and a maximum height of 8 metres.

Approval of the NRZ across 80 per cent of Glen Eira seems at odds with other planning policies that encourage urban consolidation, including matters raised in the preparation of new Metro Strategy.  The Metro Strategy discussion paper includes statement such as:

▪                medium and higher density housing should be seen as an opportunity to locate people closer to jobs, not a problem;

▪                the cost of dwellings in the middle suburbs needs to be reduced;

▪                a key principle is seen to be unlocking the capacity of established suburbs;

▪                there is a need for greater housing diversity in the established areas of Melbourne.

IMPLICATIONS

Should the new residential zones be implemented across Melbourne in the same manner as in the City of Glen Eira, we see potentially significant implications on our city.

Application of the NRZ to large parts of Melbourne will likely serve to reduce housing diversity and the provision of new households in established suburbs.  The majority of houses will be smaller apartments or larger semi-detached dwellings, with a limited number of small to medium sized houses being made available.

It can reasonably be assumed that this will in turn lead to increased stress on housing affordability.  Furthermore, people wanting to live in a house or town house rather than an apartment, and who cannot afford a large semi-detached home in places like Ormond will likely be forced to move out to the urban fringe to purchase a home.

Collie has held discussions with numerous inner and middle suburban Councils.  Many Councils are only in the early stages of work associated with the implementation of the news zones.  Some (like Boroondara and Bayside) appear to be taking a similar approach to Glen Eira, with the intent to apply the NRZ to the majority of their residential areas.  Fortunately other Councils such as Moreland and Darebin appear (at least at this early stage) to be taking a different and more considered approach to where and how the new zones are implemented.

CONCLUSION

While the transitional arrangements and the application of the new zones in Glen Eira shed some light on these matters, there is still much uncertainty about how the residential zones will be implemented across Melbourne.  It is clear that due diligence needs to be undertaken before purchasing any sites for development.

We strongly recommend that you seek advice regarding any property that you are looking to purchase or already own for the purposes of a development.  The timing of a planning permit application could be a critical decision.

To discuss these matters please feel free to contact any of our Project Directors: Michael Collie, Aran Barker, Fiona Munn, Jay Hollerich or John Roney.