Development Contribution Reform: Implementing Standard Levies Municipal Association of Victoria 23 May 2014 Christine Wyatt De Christine Wyatt Deputy Secretary, Planning Department of Transport, Planning and Local Infrastructure

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Reform outcomes Delivering an effective, transparent and simple mechanism for development contributions in priority growth locations Reining in rapidly-escalating costs to homebuyers and assist in maintaining an affordable land supply for Victorian families System refocus to deliver ‘basic and essential’ infrastructure supporting growing communities Greater certainty to councils and the development industry Emphasis on reporting and accountability for contributions collected and infrastructure spend 4

Development Contribution Reform: Implementing Standard Levies 5 Biggest reform since introduction in 1990s

Development Contribution Reform: Implementing Standard Levies 6 May 2012 ‘A New Victorian Local Development Contributions System – A Preferred Way Forward.’ September 2012 Appointment of the Standard Development Contributions Advisory Committee. January 2013 ‘Report 1 – Setting the Framework’ released for public consultation. May 2013 ‘Report 2 – Setting the Levies’ submitted to the Minister for Planning. May 2014 Establishment of standard levies and Infrastructure Contribution Plans to be available from 1 July 2015.

Development Contributions Reform: Implementing Standard Levies Standard Development Contributions Advisory Committee: ‘Report 2: Setting the Levies’ 36 recommendations Standard levies within a new ‘Development Levy System’ Identified different development settings to apply standard levies Recommended a new tool for reflecting in the planning scheme and approval process 7

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Key concepts Two development settings o Strategic Development Areas o Greenfield Growth Areas Metropolitan and non-metropolitan areas Categories of Land uses – residential, retail, commercial/industrial Categories of infrastructure – Allowable items 9

Development Contributions Reform: Implementing Standard Levies 10 Basic and essential infrastructure Contribution to infrastructure Selected from defined ‘Allowable Items’ Standard Levy Exceptional infrastructure items: - Meet shortfall that can not be funded through Standard Levy - Required to unlock the growth opportunity of the site Supplementary Levy

Development Contribution Reform: Implementing Standard Levies Allowable items Identifying infrastructure items allowed to be included in an Infrastructure Contribution Plan and therefore contributed to by a Standard or Supplementary Levy Allowable Items established up front to deliver transparency and certainty Clear boundaries around what is to be considered ‘basic and essential’ infrastructure Includes community facilities, local sporting facilities, parks, public realm improvements, roads Doesn't include - regional facilities, eg. major sporting facility or regional aquatic centres 11

Development Contributions Reform: Implementing Standard Levies Strategic Development Areas Sites or defined areas that provide valuable development opportunities located close to public transport and other infrastructure, in both metropolitan and non-metropolitan areas. Generally identified in Plan Melbourne or regional growth plans. 12

Development Contribution Reform: Implementing Standard Levies 13 Standard Levy - Strategic Development Area 2012 values) MetropolitanResidential $4,500 per dwelling Retail $46 per square metre, Gross Floor Areas Commercial and Industrial $16 per square metre, Gross Floor Area Non-MetropolitanResidential $3,600 per dwelling Retail $36 per square metre, Gross Floor Area Commercial and Industrial $13 per square metre, Gross Floor Area

Development Contributions Reform: Implementing Standard Levies Greenfield Growth Areas Land in or proposed to be included in the Urban Growth Zone and/or priority growth areas in Regional Victoria Providing new opportunities to support growth in Regional Victoria 14

Development Contributions Reform: Implementing Standard Levies 15 Standard Levy – Greenfield Growth Area 2012 values) MetropolitanResidential $268,000 per Net Developable Hectare Retail $161,000 per Net Developable Hectare Commercial and Industrial $80,000 per Net Developable Hectare Non-MetropolitanResidential $210,000 per Net Developable Hectare or $120,000 per Net Developable Hectare (small towns) Retail $126,000 per Net Developable Hectare Commercial and Industrial $63,000 per Net Developable Hectare

Development Contribution Reform: Implementing Standard Levies Existing mechanism Can continue to be used for full cost apportionment Development Contribution Plan NEW tool for priority growth locations To be applied in Strategic Development Areas and Greenfield Growth Areas Streamlined approval and preparation Infrastructure Contribution Plan 16

Development Contribution Reform: Implementing Standard Levies 17 How is an Infrastructure Contribution Plan prepared? Strategic Framework

Development Contribution Reform: Implementing Standard Levies 18 How is an Infrastructure Contribution Plan prepared? Infrastructure Standing Advisory Committee Strategic Framework ICP Preparation Infrastructure Standing Advisory Committee

Development Contribution Reform: Implementing Standard Levies Strategic Framework ICP Preparation ICP Approval 19 How is an Infrastructure Contribution Plan prepared? Infrastructure Standing Advisory Committee

Development Contribution Reform: Implementing Standard Levies 20 Implementation Package Legislation to amend Planning and Environment Act 1987 Ministerial Direction on the form and content of Infrastructure Contribution Plans Infrastructure Contribution Overlay, Schedule and supporting Practice Note Infrastructure Contributions Plan Guidelines Implementation guidelines – Design guidelines for roads, Works in kind Terms of Reference and appointment of the Infrastructure Standing Advisory Committee Implementation Reference Group Standard Levies will go live on 1 July 2015

Development Contribution Reform: Implementing Standard Levies Key questions that have arisen since announcement Urban Areas - Why is there no development setting for urban areas? Strategic Development Area - What is an SDA? - How will they be applied at the local level? Greenfield Growth Areas - non metropolitan - How is a ‘Small Town’ defined? Transitions issues - Where planning scheme amendments are underway - Negotiating S.173 Agreements now or waiting for new system 21