Inquiry into Victoria Planning Provisions amendments VC257, VC267 and VC274

1 | The VPP amendments appropriately balance the objectives of planning in Victoria

• Assessing the reforms against each of the 21 objectives of the Planning and Environment Act 1987 demonstrates that the reforms further each relevant goal for the benefit of all Victorians
• Reforms further all 21 objectives in the Act, especially (1)(fa) and (1)(g): affordable housing and intergenerational fairness
• All policy requires making tradeoffs; the evasion of tradeoffs by legacy planning systems has led to poor outcomes and a worsening housing shortage
• Reforms offer a necessary prioritisation of housing needs over other conflicting objectives

2 | The VPP amendments overwhelmingly correct the unintended outcomes of previous regulatory interventions

• Planning restrictions create scarcity, encourage speculation, and raise housing costs
• The cost of scarcity of zoned capacity is very high; while the cost of the abundant alternative is very low
• Mandatory controls increase certainty for all stakeholders and reduce housing costs
• Activity Centre Program is a form of best-practice transit-oriented development that corrects prior regulatory errors

3 | The consultation on the VPP amendments was adequate

• The amendments reflect best-practice reforms seen across Australia and internationally
• Third-party appeal exemptions are not novel and are widely used:
  In Victoria: VicSmart, Homes Victoria, Commercial 1 Zone, etc.
• In other jurisdictions: NSW, QLD, SA, ACT, WA
• Deemed-to-comply rules improve efficiency—supported by empirical studies from LA and elsewhere

4 | The Clause 55 exemptions from third-party review under VC267 are well-justified

• Evidence is overwhelming that discretionary processes with third-party appeals raise housing costs, slow construction, and increase public costs
• The Victorian system has a low permit approval rate (~70%) for new dwellings—worse for dense "Missing Middle" housing
• Many councils have high overturn rates at VCAT, indicating poor decision making quality
• Conditional approvals and restrictive planning policies suppress permit applications and distort the real picture
• Slow approvals cost Victorians $400–600 million per year
• Faster approvals could increase housing supply by up to 25%

5 | Specific changes we would seek to the amendments

• The land area threshold for lot amalgamation within the Housing Choice and Transit Zone is too high
• The threshold for the lot amalgamation bonus should be lowered from 1000m2 to no more than 800m2
• This change would enable 18% more opportunities for amalgamation

6 | The previous VPP was not meeting the housing needs of the state and local communities; these reforms are a positive step forward

• These amendments constitute a strong step toward meeting the housing needs of the state and local communities
• Current planning system imposes a "zoning cost" of more than $200,000 per apartment in several LGAs
• Activity Centre Program targets high "zoning cost" areas, indicating that is is well-targeted to meet housing demand and remedy housing capacity constraints
• Low building rates are correlated with declining child populations—the ACP can reverse this
• More housing in affluent areas offers an opportunity to reduce economic segregation