Submission to the Inquiry into Victoria Planning Provisions amendments VC257, VC267 and VC274
If there is a single takeaway from our submission it should be this: that these reforms are not radical. Rather, they represent common- and best-practice in planning from around the country and the world, and work predominantly to correct the devastating consequences of previous planning interventions.
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
