Posted on July 12, 2015 by Lindsay Taylor

Voluntary Planning Agreements in NSW – Ten Years On

The tenth anniversary of the introduction of the formalised system of voluntary planning agreements (‘VPAs’) in New South Wales under s93F of the Environmental Planning and Assessment Act 1979 (‘EPA Act’) occurred on 8 July 2015. This is the first in a series of posts over the coming months that will look at the use of VPAs over the last 10 years, their local and international context, and future trends.

The statutory scheme

VPAs are provided for in Subdivision 2 of Division 6 of Part 4 of the EPA Act. The Act declares them to be ‘a voluntary agreement or other arrangement’ between ‘developers’ and ‘planning authorities’ under which developers are required to make a monetary contributions, dedicate land free of cost, or provide any other material public benefits, or any combination, towards public purposes.

Public purposes’ are defined to include (without limitation):

  • the provision of, or recoupment of the cost of providing, public amenities or public services, affordable housing, or transport or other infrastructure,
  • the funding of recurrent expenditure in relation to such things,
  • the monitoring of the planning impacts of development, and
  • the conservation or enhancement of the natural environment.

The contents of VPAs must specify a number mandatory matters, which are:

  • the land, the environmental planning instrument change (ie. planning proposal), and the development to which they apply,
  • the benefits to be provided by the developer, and when and how this will be done,
  • whether section 94 and other compulsory development contributions provisions apply, or are excluded from applying, to the subject development,
  • a dispute resolution mechanism, and
  • a suitable means of enforcement in the event of a breach by the developer.

The Act declares that there need be no connection between development to which a VPA applies and the object of expenditure of any money paid under the agreement.

Proposed VPAs must be the subject of public notice and public inspection. Where practicable, this must occur in connection with public notice and public inspection of proposed instrument changes or development applications.

VPAs may, but are not required to, be registered on the title to the land to which they apply.

Ten years of VPAs

Some information about the use of VPAs in NSW over the least 10 years is on the public record. For example, all proposed VPAs are required to be publicly notified before being entered into, and planning authorities are required to maintain a public register of VPAs and report to the Department of Planning and Environment (‘DPE’) on VPAs they have entered into.

Although no formally compiled statistics are yet available, it is evident that planning authorities, such as the DPE and many local councils, negotiate a significant number of VPAs each year in connection with land use planning and development matters.

VPAs are amongst the more innovative, yet controversial, planning reforms of the last generation, but also undoubtedly one on the most successful if ‘take-up’ by stakeholders is the measure of success.

The evidence is that they are used in connection with large-scale development, such as in growth centres and urban renewal areas, and for site-specific developments, metropolitan and regional, large and small.

VPAs are usually negotiated in connection with the consideration of planning proposals or the assessment of development applications, although their use is not limited in this way, and they vary in scope, value, complexity, and innovation depending on the particular circumstances.

VPAs have become an important planning tool enabling planning authorities to achieve developer funding for public infrastructure, facilities, and services that are necessary to support new development in metropolitan and regional growth areas and established urban areas and, in appropriate cases, also to achieve valuable additional community benefits.

Their subject matter is broad. They have covered things such as:

  • growth infrastructure, such as roads and transport infrastructure, water supply and sewerage infrastructure, stormwater drainage, open space, and the like,
  • community facilities, such as libraries, community halls,  and sporting and recreation facilities,
  • child-care centres,
  • artistic and cultural facilities,
  • public car parking,
  • public domain improvements, such as footpaths, activated laneway networks, public plazas, through-site pedestrian links, streetscape embellishment, public art, and the like,
  • environmental conservation and enhancement,
  • heritage conservation, and,
  • affordable housing.

These benefits have been delivered by developers to planning authorities (on behalf of their communities) through monetary contributions, on-site and off-site public works, land dedications, the creation of easements, inclusions or ‘set-asides’ within developments, and by other means.

They have sometimes been used in addition to, and sometimes in substitution for, compulsory development contributions under s94, s94A or the special infrastructure contribution (’SIC’) levy.

Governance and probity

The key concerns with any facility for bargaining within the planning system are governance and probity.

The next post will look at what has been done in the last 10 years to address these issues in relation to VPAs and whether it has been enough.