Development Contribution Reform:
Implementing Standard Levies
Municipal Association of Victoria
23 May 2014
Christine Wyatt
De
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Christine WyattDeputy Secretary, Planning
Department of Transport, Planning and Local Infrastructure
Development Contribution Reform: Implementing Standard Levies
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Development Contribution Reform: Implementing Standard Levies
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Development Contribution Reform: Implementing Standard Levies
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
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Development Contribution Reform: Implementing Standard Levies
5•Biggest reform since introduction in 1990s
Development Contribution Reform: Implementing Standard Levies
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May 2012‘A New Victorian Local Development Contributions System – A Preferred Way Forward.’
September 2012Appointment 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 2014Establishment 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
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Development Contributions Reform: Implementing Standard Levies
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Development Contributions Reform: Implementing Standard Levies
Key concepts
• Two development settingso Strategic Development Areaso Greenfield Growth Areas
• Metropolitan and non-metropolitan areas
• Categories of Land uses – residential, retail, commercial/industrial
• Categories of infrastructure – Allowable items
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Development Contributions Reform: Implementing Standard Levies
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• 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
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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.
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Development Contribution Reform: Implementing Standard Levies
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Standard Levy - Strategic Development Area (@ 2012 values)
Metropolitan Residential $4,500 per dwelling
Retail$46 per square metre, Gross Floor AreasCommercial and Industrial$16 per square metre, Gross Floor Area
Non-Metropolitan Residential$3,600 per dwelling
Retail$36 per square metre, Gross Floor AreaCommercial 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
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Development Contributions Reform: Implementing Standard Levies
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Standard Levy – Greenfield Growth Area (@ 2012 values)
Metropolitan Residential $268,000 per Net Developable Hectare
Retail$161,000 per Net Developable Hectare Commercial and Industrial$80,000 per Net Developable Hectare
Non-Metropolitan Residential$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
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How is an Infrastructure Contribution Plan prepared?
Strategic Framework
Development Contribution Reform: Implementing Standard Levies
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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
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How is an Infrastructure Contribution Plan prepared?
Infrastructure Standing Advisory
Committee
Development Contribution Reform: Implementing Standard Levies
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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
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