Posted on October 17, 2023 by Liam Mulligan and Thuy Pham

Guidelines on the Withdrawal of Development Applications: meaningful response to the affordability crisis?

New South Wales, and indeed Australia more broadly, is in the midst of a housing affordability crisis. Successive state governments have pursued a range of changes and reforms to boost housing supply and affordability in NSW and, in that context, the Department of Planning and Environment (Department) has recently published new “Guidelines on the withdrawal of Development Applications” (Guidelines) under section 23A of the Local Government Act 1993 (NSW).

The Guidelines are expressly directed to the acceleration of the development assessment process. In particular, the introductory paragraphs indicate that the Guidelines are intended to address the practice some Council have adopted of issuing “withdraw or refuse” letters to applicants – a practice said to be of ‘particular concern‘ to the Department.

Under the Guidelines, councils must be satisfied that a request to withdraw a DA is consistent with the following 6 “principles”:

  1. Councils in NSW can contribute to the challenge of addressing the State’s housing shortage through their responsibilities as local planning authorities.
  2. The expeditious assessment and determination of DAs creates a pipeline of development proposals with housing opportunities.
  3. Councils in NSW are required to devote appropriate resources to their planning and assessment teams to ensure development applications are assessed and determined within reasonable timeframes, consistent with the Environmental Planning and Assessment (Statement of Expectations) Order 2021 as issued under section 9.6(9) of the EP&A Act.
  4. Councils are not to engage in practices of delay in assessing applications, including unnecessarily asking applicants to provide information not necessary for the assessment of the proposal or seeking the applicant to withdraw the proposal.
  5. The request to withdraw a DA is consistent with the Best Practice Guide and the request is not intended to enhance council’s performance data outcomes.
  6. Data from the NSW Planning Portal will continue to be used to show the performance of councils in the assessment of development.

The first and most obvious point to note is that principles 1 and 2 are directed entirely towards development applications for residential development. It goes without saying that the range of development applications considered by councils comprises far more than just applications for residential development. It might also be noted that Principle 6 is a statement of fact, not principle, and it is difficult to see how it could effectively guide councils in the execution of their development assessment functions in they way Principles 1-5 may do.

More broadly, and in the context of a sprawling, complex, and multi-faceted policy issue such as the housing affordability crisis, it is reasonable to question whether councils requesting development applications be withdrawn is a significant contributing factor to the lack of housing supply.  Arguably, the Guidelines have the potential to create an undesirable expectation that councils will not ask applicants to withdraw applications which are not properly designed, scoped, investigated or justified.

In what might be seen as a response to the introduction of the Guidelines, Local Government NSW (an independent organisation that support and advocates on behalf of its member councils) issued a media release on 17 October 2023 which stated that:

NSW Councils have rejected allegations they are responsible for the withdrawal of development applications adding to the State’s housing crisis and call on the State Government to look at the end-to-end performance of the planning system in NSW, including their own role, rather than continuing to target councils unfairly.

Figures provided by Local Government NSW pointed out that although councils are approving 97% of all development applications, those approvals are not being translated into homes on the ground at the satisfactory rate, with only 70,886 occupation certificates being issued over 103,460 development applications determined in the last two financial years.

Full text of the Guidelines can be found here.

The Media Release dated 10 October 2023 is here.

The Media Release of Local Government NSW issued on 16 October 2023 is here.

Our discussion on reforms to boost housing supply and affordability in NSW in June 2023 is in this article.

If you have any questions about this post, please leave a comment below or contact Liam Mulligan on 02 8235 9715.