Posted on November 6, 2013 by Megan Hawley

Planning Bill 2013 – Strategic Compatibility Certificates

The Planning Bill 2013 (Bill) provides a significant opportunity for developers to have development which is consistent with State government strategies approved before local councils develop detailed planning controls to give effect to those strategies.

The Bill proposes a hierarchy of strategic plans, including regional growth plans and subregional delivery plans and local plans. The transitional arrangements proposed will make existing local environmental plans and development control plans the ‘local plans’ under the Bill (see our blog on  Planning Bill 2013 – Savings & Transitional Arrangements).

The purpose of strategic compatibility certificates is to allow development which is consistent with a regional growth plan or subregional delivery plan to be granted development consent despite the development being prohibited by the planning control provisions of a local plan, or despite any development standard in the planning control provisions of a local plan, until such time as the local plan is amended to give effect to the regional or subregional plan.

A certificate can only be issued, however, if the provisions of the local plan ‘prohibiting’ the development have not yet been amended. It cannot be issued only when development standards have not been amended. Therefore, the mechanism is not an additional way to avoid development standards, except in respect of prohibited development.

The intention is that such certificates will in effect be a transitional arrangement, pending new local plans being made. It should be noted, however, that the Bill contains no time limit on when strategic compatibility certificates can be issued. They can be issued as long as the prohibition in the local plan has not been modified to give effect to the regional or subregional plan.

It is possible that even once strategic plans have been prepared, and the local plan has been modified, a developer could argue that the local plan does not properly give effect to the upper level plans if it continues to prohibit certain development, and seek a certificate on that basis. This would raise issues regarding the proper interpretation of the regional or subregional plan.

Strategic compatibility certificates can be issued by a regional planning panel or the NSW Planning Director-General (DG). The DG can only issue a certificate if the relevant council does not object to the certificate, and there are no more than 25 public objectors, being persons who have made a submission objecting to the certificate during the public notification process (which is a minimum of 28 days).

A certificate cannot be issued unless the development is consistent with a regional growth plan or subregional delivery plan, and if the development will not have any significant adverse impact on likely future uses of surrounding land.

This last point is interesting. The question is not impact on existing development, but on likely future uses. This is contrary to traditional planning principles. The provision is clearly directed at the likely uses given the new strategic framework of the regional or subregional plan. However, to what extent does the word ‘likely’ require a consideration of the intentions of existing landowners and the likelihood that the regional or subregional plan will be implemented on all surrounding land. Will the DG or regional panel consider any land uses consistent with a regional or subregional plan to be likely future land uses?

Therefore, whilst it is positive to see an assessment of impact as a precondition to the issue of the certificate, the focus on future land uses will provide little comfort to landowners in areas proposed for significant planning change who do not themselves intend to redevelop or sell.

Once a certificate is issued, a development application for the development the subject of the certificate must be made within 12 months. If development consent is granted, the development consent will lapse after 2 years if the development is not commenced. This is shorter than the 5 year period which is the maximum for other types of development consents. If development consent is refused, then the certificate has no effect. That is, it can only be relied on once.

As the Bill includes provisions requiring consent authorities to advise developers of a proposed refusal, and given that a certificate can only be used once, I would expect that a developer facing  a refusal of consent would withdraw its application so as to avoid negating the effect of the strategic compatibility certificate. However, the developer would still need to lodge any further application within the initial 12 month period.

Development which is subject to a certificate is to be dealt with as ‘merit assessed’ development under Part 4 of the Bill, and the local plan will dictate whether the development is EIS assessed, regionally significant, or state significant development (subject to the conditions of the certificate, in respect of which see my comments below).

The strategic compatibility certificate is a relevant consideration in determining the development application (see clause 4.18(3)). However, the key provision is clause 4.37 which provides:

‘(1)An application for development consent that is made in reliance on a strategic compatibility certificate cannot be refused, and conditions cannot be imposed on the development consent, if the grounds for refusal or the imposition of conditions relate to matters dealt with in the conditions of the certificate.

(2) This section does not affect a refusal to grant development consent or the imposition of conditions on other grounds.’

A certificate can be issued subject to conditions relating to ‘the standards for the development, environmental impact assessment or community participation requirements or other relevant matter‘ (see clause 4.36).

This gives the DG, or planning panel significant scope to constrain the assessment process once a development application is lodged.

Any conditions of the certificate replace the otherwise applicable provisions of the local plan. Therefore, the conditions could state that the development can have a specific FSR or height, and the local plan would not apply to that extent. Also, the consent authority would not be able to refuse consent on the basis of FSR or height, or impose conditions on the development consent reducing the FSR or height of a proposal to below that in the certificate.

Also, the conditions of the certificate could state that development which would otherwise be EIS assessed development is not to be EIS assessed, and again, those conditions would override the local plan and dictate the assessment process for the development.

Strategic compatibility certificates therefore provide a significant opportunity to have the scope of a development determined up front by the DG or regional panel, and to limit the ability of the consent authority to refuse consent or impose conditions inconsistent with the certificate.

It is expected that the certificates will be a feature of the planning system for some time. It has been more than 6 years since standardised LEPs were introduced into the Environmental Planning & Assessment Act 1979, and still not all LEPs have been updated, and many are very new. Whilst the state government may be prepared to release some regional and subregional plans within the near future, the period between those plans being made, and local plans being modified could be significant, and during that period, strategic compatibility certificates will no doubt be taken up enthusiastically by developers.