9 people can decide the fate of your property development
Much is made of a stoush between a developer and a local council. When the internal workings of a local council mean that the stoush is between the council planners and the elected councillors the story is no less dramatic – it merely takes place behind closed doors, and generally out of the public eye.
The fact is that council planners and elected councillors often sit on opposing sides of the fence.
Planners exist to follow local planning schemes, instruct developers on meeting local planning and development overlays. Council planners aim to create sustainable townships and cities in which approved development meets ResCode, adds to the local character and creates a pleasant living space for all residents.
Elected councillors often have no planning experience, no development experience and in suburban areas undergoing change, little understanding of the amount of work, time and money that is expended both by local and state government as well as developers attempting to gain approval for new housing developments.
Often politically motivated, emotional decisions rule the day in a council meeting. “He said, she said” arguments and political posturing take the place of facts and cool-headed thought processes.
And in a council made up of just 9 elected councillors, those 9 people can decide the fate of your property development.
A property developers’ role is not to antagonise the local council. It is not to deliberately create stress or hardship for neighbours. A property developers primary goal and role in the community is to create new housing on the land that they own, and create a profit as a direct result of this higher and better use of land.
Take the current Victorian planning scheme, which is currently under review by the Planning Minister Matthew Guy. Under the local council planning procedure, you must apply for a Planning Permit.
This can take several months in which a pre-planning meeting is held with council planners, requests for further information are handled by both sides, and finally an indication of whether council currently anticipates refusing or granting a permit.
Objections can be lodged by neighbours and even interested parties from suburbs many miles away during this time. A developer can be reassured by council planners that their application will be approved, however with a highly charged, politically minded elected council this reassurance means nothing.
Even if the council planners are recommending that council approve the development, elected councillors can decide to refuse the development.
An application can be refused on many grounds such as loss of amenity for neighbours or on neighbourhood character. And if you have ever been to a council meeting where the residents and elected officials are having a political stoush, the development applications being heard can be written off in a matter of minutes.
This is not always the case, with many smaller residential developments easily moving through the process relatively unscathed. However for the medium developments such as 5 or more dwellings the elected councillors also have ‘call up’ items.
Developments such as a 5 townhouse project on a block can be called up, and these can then be rejected even if council planners are recommending them to be approved. This is where VCAT comes in.
Essentially in Victoria when a development is rejected, an applicant has the chance to appeal the decision at the Victorian Civil and Administrative Tribunal. Submission from objectors can be heard and local councils stand on the matter will be heard.
This is not a rubber stamp approval for developers, neither is it a sure thing for councils to have incorrect planning decisions upheld.
Planning in the most part is quite black and white. While the neighbourhood character and overall look of the building can be subjective, whether the development fits within the planning scheme and ResCode is objective. The development must meet all criteria before it has a chance of being approved at VCAT.
To be successful at VCAT developers must not just convince local council once, but for a second time before then proceeding to VCAT. The current planning systems allows for the developer and council planners to meet and work through the issues that saw the application refused in the first place.
In a highly political area, the developer must tread carefully and work with council the second time around prior to heading to VCAT. The local council position will then be heard again by the elected councillors. This sounds familiar.
This process can eat up years in a development, meaning cost blowouts of $1000’s. When the case is heard at VCAT this second round of ground work can mean that the council is now happy with the application and may be supportive to the development. The reality is the developer still must go to VCAT. This wastes at least $10-$15,000 on the part of the developer and the same again on the side of the council.
Developers need to have a firm understanding of how local council works, how the local residents are reacting to proposed development in the area, and how the council, planning system and the state policies will affect a development. Every developer must be aware of the politics inside the council and the 9 people who can decide the fate of your development.
Dianna Wolfe is a passionate property developer and renovator. She and her husband, Lee, run their property development and home staging company, Red Door Residential, in the metro area of Melbourne. To find out more about Dianna Wolfe or the home staging services Red Door Residential provide you can check out their website, www.reddoor.net.au
This article is written as a general study of what may happen as part of the planning phase in a property development. If you have questions concerning a specific property development you should seek advice from the relevant authorities, legal and accounting experts.