By Aaron Gadiel, Partner

On Friday 15 November 2024, the NSW Government announced its intention to introduce a ‘new state-led approval pathway for major residential housing projects’.

According to the Planning Minister, Paul Scully, ‘these latest reforms mean the State is taking control of major housing projects so that they have the attention they deserve and get through the assessment process much faster’.

‘The NSW Government will do whatever it takes to build a better future for NSW so young people, families and workers have somewhere to live’, Mr Scully said.

The Housing Delivery Authority

The new arrangements include the creation of a ‘Housing Delivery Authority’.

The government says that the reform will come into effect in ‘early 2025’ following a ‘short and sharp consultation with stakeholders’.

On this timing, it seems that the government is intending to introduce the new arrangements under existing legislation (without seeking parliamentary approval for new legislation).

It is possible for the government to create the new ‘Housing Delivery Authority’ as a development corporation under the Growth Centres (Development Corporations) Act 1974.  It can effectively do this by decree, without seeking the approval of state parliament. However, the government has not published any information about the legal detail of the authority, so, at this stage, this is just guesswork.

The board of the Housing Delivery Authority will include the Secretary of the Premier’s Department, Simon Draper, the Secretary of the Department of Planning, Kiersten Fishburn and the Chief Executive Officer of Infrastructure NSW, Tom Gellibrand.

The Housing Delivery Authority will be established ‘within’ the Department of Planning, Housing and Infrastructure (the Department).

The NSW Government has not announced any new funding for the new authority.

Development consents

Under the ‘new state-led approval pathway’, the Minister for Planning and Public Spaces (Paul Scully) will be the consent authority, rather than a local council, regional planning panel or the Independent Planning Commission.

At present, for non-contentious state significant development matters, the Planning Minister is nominally the consent authority, but actual development applications are decided by officers of the Department.  (The Independent Planning Commission is the consent authority for contentious state significant development.)

Speaking generally, the Planning Minister has not personally determined private sector residential development applications since prior to the repeal of the old ‘Part 3A’ approval regime in 2011.

The Government’s announcement does not mention any role for the Independent Planning Commission in the new arrangements.  The implication is that the Commission will not be involved.

It is unclear whether:

• the Housing Delivery Authority or officers of the Department will actually determine development applications and grant consents (under delegation from the Minister); or
• all such applications will be presented to the Minister for personal approval.

If it is the latter, it would mean the re-introduction of state-level political involvement in the day-to-day development assessment decision-making.  We have not seen such involvement for 13 years.

The government has not said whether the new development stream will be ‘state significant’ development, or merely a development stream for conventional development, where the Planning Minister is the consent authority.

The government is able to change the consent authority for developments (without parliamentary approval) by amending the State Environmental Planning Policy (Planning Systems) 2021.  This does not necessarily require the development to be categorised as ‘state significant’ development.  (State significant development requires the preparation of an ‘environmental impact statement’ — a more costly and time-consuming document to prepare than a ‘statement of environmental effects’.  Additionally, development control plans do not formally apply to state significant development – which has some benefits, but at times, some adverse consequences, for developers.)

The government has said that the new development stream ‘will be available’ for new housing developments above an estimated development cost of:

• $60 million (‘on average 100 or more homes’) in Greater Sydney; and
• $30 million (‘on average 40 or more homes’) in regional NSW.

However, not all projects that meet the above criteria will automatically be covered by the new development assessment pathway.

The government says that proposals will also be selected through an ‘expression of interest’ process with established criteria.  They will be assessed ‘on merit’ with ‘a flexible approach to planning controls’, including any incremental zoning changes required to pursue a development application.

This seems to suggest that, at regular intervals, the Housing Delivery Authority will invite development proponents to submit proposed developments for a beauty contest.  Past experience suggests that some projects with merit may miss out due to public sector resource-constraints or for political reasons.

While a fast-track state-led pathway will generally be welcomed by developers, the intermittent nature of the call-in process is likely to frustrate many .

Firstly, developers will need to spend time and money preparing proposals for consideration for call-in by the Housing Delivery Authority.

Secondly, the intermittent ‘expression of interest’ process may mean that proponents will be discouraged from progressing large projects until the next such process.  There will be less of a problem if expressions of interest are invited frequently (say every three months).  It will be more of a problem if they are only invited, say, annually.  The government has not said how often expressions of interest will be sought.

The government says that the approval timeline could be ‘potentially reduced by years’.  For this to be the case, the approval pathway would probably need to do away with time-consuming process steps, such as competitive design competitions and the City of Sydney’s two stage development consent process (where major developments require, first, a concept development consent and secondly a detailed development application).  The government has not said whether it would be taking such steps.

In short, all we have at the moment is a media release.  There is lack of detail which (for now) leaves crucial questions unanswered.

Rezoning process

As mentioned above, the government says that ‘any incremental zoning changes’ could be dealt with by the Housing Delivery Authority as part of a development assessment process.

However, the government has also said that it will introduce a new pathway that will allow ‘selected projects’ that deliver significant housing uplift, but require more significant rezonings, to go through a Department-led fast track rezoning pathway that does not require a local council process.

The government says that these projects will also be selected through an expression of interest process run by the Housing Delivery Authority, where proponents will be able to submit rezoning proposals for consideration.

According to the government, this approach will ‘have the benefit of allowing new projects to go through rezoning and development assessment at the same time’.

Many developers may not consider simultaneous rezoning and development assessment processes to be beneficial, as committing resources to finalise the detail of a development application, in the absence of any certainty of the zoning, may be a bridge too far for some.

It is unclear how this new rezoning pathway relates to the process established by the State Significant Rezoning Policy, which was launched only two months ago in September 2024.

Both involve the NSW Government taking the lead on key rezonings and delivering them, with no express decision-making role for local councils.  However, under the State Significant Rezoning Policy, projects for inclusion are initially selected via an ‘internal nomination process’.  That is, Departmental officials choose the projects at their initiative.  The new stream, it seems, will allow a periodic opportunity for the private sector to put its proposals forward for consideration.

It will be interesting to see whether the new Housing Delivery Authority-led process subsumes the existing state significant rezoning policy, or if the two are to operate in parallel.

The bottom line

Ultimately, the bureaucratic structure is not the important thing.  What really matters is the willingness of the NSW Government to make tough decisions, for the good of the wider community, in the face of vocal opposition by local pressure groups.

We have had many special-purpose authorities created in the past, each supposedly tasked with cutting through inertia and actually delivering real outcomes.  These include the Greater Sydney Commission (2015-2023), UrbanGrowth NSW (2013-2019) and the Sydney Metropolitan Development Authority (2010-2013).

Each ultimately did not live up to their full potential — and had relatively short lifespans.

At least, on this occasion, the announcement has been accompanied by an explicit recognition by the Government’s most senior figures that local government is blocking the delivery of much-needed housing.  In the past, governments have not been so frank.

This may foster some hope that the new Housing Delivery Authority will be more successful than its predecessors.