Minns weighs new powers to bypass councils on major housing approvals

The Minns government is weighing up major planning changes that would increase the state’s power to intervene on significant residential housing developments, and which could see councils bypassed on major projects.

Premier Chris Minns confirmed this week that his government will in coming weeks announce a further tranche of reforms to the planning system as Labor struggles with an anemic pipeline of housing approvals.

NSW Premier Chris Minns has become frustrated at the pace of housing approvals.Credit: Kate Geraghty

The premier made housing supply the centrepiece of his first term in office but has become frustrated at the dismal turnaround in new housing approvals.

While the Minns government has introduced sweeping changes to the planning system, including high-density development zones in designated transport precincts, NSW continues to lag the rest of the nation in the number of new homes green-lighted by councils and planning decision-makers.

In June, NSW recorded the lowest number of new housing approvals since January 2013.

Meanwhile, in the 12 months to June, the state recorded only five new dwellings per 1000 people – the lowest rate in the country and well below what is required to meet ambitious National Housing Accord targets.

The slow approvals have led the government to turn attention from rezoning to specific development applications. Sources with knowledge of internal deliberations told the Herald the government is in the final stages of developing a new mechanism to deliver faster decisions on significant housing developments.

The coming reforms are likely to include a new development intervention process that would give a state agency responsibility for approving larger residential developments, over the top of local councils.

The state government has previously resisted such a step, in part due to the legacy of the Part 3A planning powers that gave the planning minister consent authority for major projects deemed to be of state or regional significance.

Part 3A was the impetus for a series of controversies under the former Labor government and was seen by some as an outlet to override community objections to projects. It was scrapped by Barry O’Farrell following a recommendation by the Independent Commission Against Corruption, which found it gave the state too much discretion and created a “corruption risk”.

Premier Chris Minns is weighing up changes to the planning system that could see councils bypassed on some major residential housing projects.Credit: Nick Moir

Publicly and privately, industry figures have called for an independent decision-making mechanism, arguing that the risks identified by the ICAC have long been addressed by the ban on property developer donations in NSW.

The new mechanism could include establishing an independent planning tsar or panel outside the Department of Planning that would be given decision-making powers, said multiple sources speaking on the condition of anonymity to discuss internal deliberations that have yet to be signed off on by cabinet.

The government is also mulling a number of decisions that are likely to be announced by the end of the year. The introduction of its low- and mid-rise planning changes was delayed until after the local government elections in September. It is also in the process of considering recommendations from a NSW Productivity Commission report that called for relaxed development standards over issues such as removing requirements for most apartments to receive direct sunlight.

That recommendation – which has been criticised by expert groups including the Committee for Sydney – is unlikely to be adopted. But the government is working on reforms that would ease post-approval conditions to accelerate residential developments.

It is also in the process of preparing more of its signature Transport Oriented-Development zones, which allow for significantly greater density near some Metro and railway stations. While an initial list of 45 TOD locations has been released, the government has made no secret of the fact it is looking at adding more.

Feasibility work, including at Edgecliff in the city’s east, has been under way for some time, sources told the Herald.

The lag in housing approvals is such that Minns has conceded his government may not be able to meet the targets and has ruled out the possibility of hitting them “in the short run”.

However, the premier is still determined to make progress on an issue that he has placed at the centre of his leadership, saying this week it was “still important to have that goal, even if we fall short”.

“It means that my government, future governments, are on the hook for what we need to build, and ultimately, we have been hit really hard with the economic conditions,” he said.

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