Posted on August 26, 2024 by Frances Tse and Lindsay Taylor 12

Half-width roads – What options are available to local councils?

A significant issue regarding the construction of precinct-planned roads in new development areas is the construction of half-width roads.

Provision of new local roads

In NSW, where a local council has identified particular local roads to service its wider area, one of the ways it can obtain the provision of those roads is by including them in a contributions plan (CP).

Pursuant to a CP, the local council can impose conditions under s7.11 of Environmental Planning and Assessment Act 1979 (EPA Act) on new development consents. Section 7.11 conditions can require the developers to pay monetary contributions to the council towards the construction and acquisition of the roads specified in the CP.

A developer who owns land identified for a road in a CP may sometimes offer to provide the road at the time it develops the land instead of paying s7.11 monetary contributions for its development. In general, such arrangements can be entered into under a ‘work-in-kind’ agreement pursuant to s7.11(5)(b) of the EPA Act in respect of works or under a planning agreement pursuant to s7.4 of the EPA Act.

Importantly, both ‘works-in-kind’ agreements and planning agreements depend on a developer and the local council agreeing and entering into it for the provision of the road. Additionally, a developer can only control what occurs on its own land.

These aspects make it especially challenging for local councils to deliver planned roads in its CP which straddle land owned by different developers. This is because different developers may have their own development timeframes. Sometimes this leads to the situation where a developer provides a half-width road, as that is the part that is on its land.

What options are available to local councils

It is important to remember that councils are required under the EPA Act to assess the adequacy of development applications that are lodged with them. Councils have the ability to refuse to grant consent to a development application if there is inadequate access.

However, in the interest of generating housing supply it seems to us that a better outcome is for developers and councils to work together to address the issue of land ownership and development fragmentation that impacts on delivery of road infrastructure.

Council’s compulsory acquisition of land

If the council has collected sufficient s7.11 funds, it could compulsorily acquire land for the road from the adjoining landowner using its compulsory acquisition powers under the Roads Act 1993 (NSW) and Local Government Act 1993 (NSW). However, we recognise that councils are responsible for a vast amount of public infrastructure in their local areas which need to be prioritised depending on the needs of the particular area, and therefore councils may not always have sufficient funds at any given time.

Councils and developers working cooperatively

Another option is for developers of adjoining land to work cooperatively with each other to negotiate the orderly development of land and construction of roads despite differing development timeframes.

This could take the form, for example, of:

• the adjoining developers all entering into an agreement with the council to dedicate and construct their respective parts of the road by an agreed date, or
• the adjoining developers agreeing that the developer who develops first can acquire their land and is responsible for constructing the full width of the road and that developer is reimbursed by the council when the council has the relevant s7.11 funds available,
• or a combination of using council’s acquisition powers and a negotiated agreement.

In this regard, we note that if a developer does agree to dedicate land or construct its half of a road early, that dedication or material public benefit may be taken into account under s7.11(6) of the EPA Act when the council imposes a s7.11 condition at the time the developer develops its land.

Conclusion

As can be seen above, the fragmentation of land ownership and development impacts on the delivery of road infrastructure. In our view, councils and developers will need to work together cooperatively and creatively within the current planning legislation in order to address the challenge and to ensure the continued generation of housing supply in new development areas.

If you would like to discuss any aspect of this article, please contact Frances Tse or Lindsay Taylor.