Just over 15 months ago the NSW Government introduced a new review system to help overcome local council resistance to good spot rezoning proposals and to other LEP amendments. There is a lack of awareness across the industry about how the new system is actually operating.  It’s time to shed some light on the subject.

Background to the ‘pre-gateway review’ process

The new system allows individual developers and property owners to seek reviews if local councils do not progress proposed changes to local environmental plans. Such changes might include a rezoning, or a change to the planning controls specified in an LEP, such as height and floor space ratio.

This new system is known by the obscure name of ‘pre-gateway reviews’.  It takes this name because the initial stage of the conventional rezoning process involves a council applying to the Department of Planning and Infrastructure for a ‘gateway determination’.  In the past, a local council could often permanently block a proposal (by a developer or property owner) by simply refusing to even submit a proposed change in planning controls to the ‘gateway’.

The ‘pre-gateway review’ system was intended to ‘increase transparency and accountability’.  It was said that ‘rezoning proposals which have merit – for instance those which are well located, planned and will assist housing supply – may be supported [by the state government] after an independent review’.

However, the review system is not simple.  The review process means that a proposal to change a LEP has to run the gauntlet of four separate steps.  A failure at any one of these steps kills-off the proposal.

Even if a developer or property owner is successful, the proposed change in planning controls does not automatically flow.  All that happens is that the proposal is submitted to the Department for a ‘gateway determination’, where public exhibition and community consultation typically follow. We described the mechanics of the new system in greater depth in an October 2012 Gadens article here

The experience to date

The raw numbers

The Department of Planning and Infrastructure publishes ‘tracking’ information on individual ‘pre-gateway review’ applications online.  

However, the Department’s approach to publishing information on the ‘tracking’ system is ad-hoc and inconsistent.  Many key documents are presently missing.  Some information is clearly wrong or out-of-date.  This makes it difficult to get a complete picture on exactly what has been going on. Nonetheless, we have attempted to use the information that is available to paint a picture of progress so far.

Since the system began operating in November 2012 ,there have been 41 pre-gateway review applications lodged:

  • 11 were lodged in the first five months of the scheme;
  • 12 in the next five months; and
  • 18 in the most recent five months.

Twenty-five of the applications were made after local councils expressly rejected a proposal to change local controls, while the remaining 16 applications arose because of local council delay (ie the councils did not support the proposal within 90 days).  

Reviews have been sought for a wide range of proposals, including urban and regional projects, infill apartments, retail developments and greenfield land release.

It seems to take about 100 days (from lodgement) before a pre-gateway review application is even referred to a Joint Regional Planning Panel (JRPP) or to the Planning Assessment Commission (PAC) for review.  This does not sit well with the Department’s 45 day benchmark.  Additionally, this timeframe seems to be getting longer.  So far none of the 11 pre-gateway review applications submitted in the last 109 days (ie since late October) have been referred to a JRPP or PAC.

It is also important to note that the actual amount of time taken for a matter to be referred to a JRPP or the PAC can vary wildly between projects.  We have noticed that one matter was referred in 21 days, while another matter took 255 days to be referred. 

The JRPP and the PAC seem to provide their recommendations in a consistent timeframe – on a rough average of 55 days (which only slightly exceeds the Department’s 42 day benchmark).

Nonetheless, the overall process is lengthy, largely due to the time required for the Department to make its various decisions.  The limited data available to us on the successful applications implies an average time from lodgement to a decision (that a matter should or should not ‘proceed to gateway’) is 250 days.

The winners

Of the 41 review applications lodged, thus far 12 have jumped all of the hurdles of the four step review process. 

However, completing each of the four steps of the pre-gateway review system is not, in itself, enough to get a rezoning.  It results in a ‘gateway determination’, which then sets the scene for the public exhibition of the proposed change to planning controls, and a further discretionary decision by the local council and/ or Department/Minister.

As far as we can tell, none of the actual changes to planning controls sought have yet been finalised (although, due to the way the Department publicly presents information, it is possible that a small number of rezonings have taken place in a less-than-obvious form.)

The lack of a final outcome (so far) may merely reflect the length of time it takes for any change in planning controls to be publicly exhibited and then finalised. 

However, it may also reflect the fact that for at least eight of the 12 ‘successful’ pre-gateway reviews, the local council has been asked to be the ‘relevant planning authority’.  This means that it is the local council’s job to:

  • publicly exhibit and explain the proposal to the community; and
  • decide whether the proposal should proceed once the submissions from the community have been received.

Given that the pre-gateway review process is only triggered because of the opposition (or lack of enthusiasm) by a local council, it is surprising that the Department has been so willing to hand back to the local councils the final critical decision as to whether a rezoning will actually proceed.

Interestingly, 3 proposals were given to JRPPs (instead of councils) to progress to public exhibition and finalisation.  However, these applications were all made within the first three months of the new review system.  As far as we can tell, since then, all of the successful review applications have been handed back to local councils for implementation. 

The losers and those still in the waiting room

Of the 41 review applications that have been lodged, five were not successful (including those that were ‘withdrawn’). 

24 applications are still in the midst of the review process.  The oldest of these was lodged in February 2013. 

The substance of the decisions

Most applications seem to pass the Department’s initial eligibility check, and receive Departmental support on merit grounds. 

Aside from delay, the biggest risk to a successful review application appears to be the JRPPs.  So far, there have been five matters where the Department backed the proposal, but it was subsequently opposed by a JRPP.

At this point, there is only one published instance where the Department has given the go-ahead for a proposal to ‘proceed to gateway’ despite the opposition of a JRPP.  In that case (a proposed supermarket in Chatswood), the panel was divided and the Department supported the panel minority (which was made up of the local Mayor as well as one of the panel’s expert members).

We have not seen any matters where the Department (or Minister) have rejected a proposal that received the support of a JRPP or the PAC.  This probably isn’t surprising; given that a matter is generally only referred to a JRPP or the PAC once the Department is satisfied that it has strategic merit.

We have not seen any ‘pre-gateway review’ matters where the Minister for Planning and Infrastructure has personally made a decision on an individual matter.  That is, where a government decision has been required, the relevant decision-maker has always been a senior Departmental official acting on behalf of the Minister.

What does it all mean?

The new ‘gateway review system’ lacks the discipline of, say, a well-managed court process (many in the industry have long called for the introduction of Court appeal rights for rezonings and other LEP amendments, to no avail).

There is no readily accessible means of compelling the Department to carry out its functions in a timely way.  There is a risk that the process could be slowed down if projects become politically contentious.

Nonetheless, so far we have identified 15 proposals where the Department has given its express support to a proposal, despite the explicit opposition from the relevant local council.  Of course, the Department’s supportive position has not always been shared by the relevant JRPP (effectively ending some proposals).

The system is, in our view, worthwhile.  However any proponent must be prepared to:

  • bear the costs of the many reports required;
  • tolerate a high risk of delay; and
  • suffer the unpredictability of a JRPP/ PAC merit review.

Nevertheless, for many, pursing a pre-gateway review will be better than sitting on their hands.