Posted on April 28, 2023 by Lindsay Taylor and 17

Commencement of New Employment Zones

On 26 April 2023, five new employment zones and four new supporting zones took effect in local environmental plans (LEPs) across NSW, replacing the former Business (B) and Industrial (IN) zones.

The amendments to the zones in LEPs across NSW were exhibited by the NSW Department of Planning and Environment (DPE) for public comment from 31 May 2022 to 12 July 2022. The DPE sought feedback on the proposed land use tables for 134 LEPs including on local land use permissibility, local objectives, local provisions and Schedule 1 additional permitted uses. It is understood that DPE and local councils worked closely in finalising the land use tables to each zone and LEP.

In addition, amendments to the State Environmental Planning Policy (Transport and Infrastructure) 2021 and the State Environmental Planning Policy (Housing) 2021 have also been made to include employment zones as prescribed zones to maintain permissibility under these SEPPs.

Background

The changes to land use zones came about in response to the NSW Productivity Commission’s White Paper on Rebooting the Economy which recommended consolidating employment zones to deliver planning reforms to support economic growth and productivity.

The introduction of the new zones is a result of the Employment Zone Reforms finalised by DPE in December 2021. These zones were formally introduced into the Standard Instrument (Local Environmental Plans) Order 2006 (SI LEP Order) on 1 December 2021.

Although the new zones were initially planned to commence on 1 December 2022, this date was pushed back to 26 April 2023 (by way of the Standard Instrument (Local Environmental Plans) Amendment (Land Use Zones) Order 2022 published on 30 November 2022).

The new zones were introduced into existing LEPs through six self-repealing ‘State Environmental Planning Policy (Land Use Zones)’ amendments published on 16 December 2022, with a commencement date of 26 April 2023 (except a small number of LEPs that are introducing employment zones via a planning proposal: see cl 6(1) of Schedule 1 of the SI LEP Order).

In finalising the employment zones, DPE outlined that the changes were based on quantitative and qualitative evidence to:

• maximise productivity while minimising land use conflicts and ensuring they are fit for purpose
• address current barriers within the planning system that limit the ability of businesses to establish, expand or adapt
• better support councils in the delivery of the strategic vision contained in their Local Strategic Planning Statements and background studies.

New Zones

The new zones that will replace the Business (B) and Industrial (IN) zones include the following:

Employment zones in which the ‘primary objective is to promote employment-generating activities’, including:

• E1 – Local Centre
• E2 – Commercial Centre
• E3 – Productivity Support
• E4 – General Industry
• E5 – Heavy Industry

Supporting zones which intend to ‘accommodate land uses in existing B or IN zones that are not primarily productivity related’, including:

• MU1 – Mixed Use
• W4 – Working Waterfront
• SP4 – Enterprise
• SP5 Metropolitan Centre

Effects and implications

Permissible and prohibited uses

The new Employment and Supporting zones introduce changes to the permissible and prohibited uses of land located in the new zones, and are not simply a conversion of the previous Business (B) and Industrial (IN) land uses. To assist in translating the previous zones into the new zones, DPE provided a summary translation table during exhibition stage in their Explanation of Intended Effect, below:

Generally speaking, however, there is more flexibility with increased mandated permissible uses in new zones and previously permissible land uses continue to be permissible in the new zones. However, it is possible that some land parcels are located in a more controlled or restricted zone, and vice versa.

To reduce loss of permissibility under any of the new zones, DPE included the following land uses in Schedule 1 (Additional Permitted Uses) of individual LEPs: ‘Residential accommodation’ (and all sub terms), ‘Specialised retail premises’ and ‘Food and drinks premises’ (and all sub terms).

Definitions

There are changes to definitions of some land use definitions, such as the definition of ‘Shop Top Housing’ , as well as the introduction of a number of new definitions including:

• ‘data centre’ to refer to a building or place the principal purpose of which is to collect, distribute, process or store electronic data using information technology;
• ‘creative industry’ to refer to a building or place the principal purpose of which is to produce or demonstrate arts, crafts, design or other creative products, and includes artists’ studios, recording studios, and set design and production facilities; and
• ‘local distribution premises’ to refer to a building or place used for the storage or handling of items (whether goods or materials) pending their delivery to people and businesses in the local area, but from which no retail sales are made.

Savings provisions

The SI LEP Order provides that where development is permitted with development consent under a former Business or Industrial zone as in force immediately prior to 26 April 2023, then it continues to be permitted with development consent until 26 April 2025: see Part 2 of Schedule 1 of the SI LEP Order.

As such, Councils could still expect to receive development applications for development under the previous Business and Industrial zones if landowners determine the new zonings have restricted the permissible land uses on their land.

Further information on DPE’s Employment Zones Reform can be found on DPE’s website, including an equivalent zone reference table with transitional zoning information, here: https://www.planning.nsw.gov.au/employment-zones-reform

For more information on the implications of the Bill, please contact Dr Lindsay Taylor or Anzer Khan.