The growing trend toward apartment buildings in new housing construction across Australian cities is lifting the scale of developments above the scale that local councils should determine.

A few decades ago, most housing was individual detached houses. On the fringe of cities like Sydney, there were large housing subdivisions but these were often in special areas determined by state governments who had a say in both the planning and the approval process.

Over recent years, the apartment has become the dominant dwelling type to be developed as consumers traded off size with proximity to work and public transport.

Many apartment developers saw the opportunity to develop a precinct or campus of apartments with retail, child care, medical facilities and restaurants all included. Examples in Sydney include Central Park on Broadway, Harold Park in Glebe, Discovery Point near the airport, Barangaroo, Darling Square, Pagewood and much of the new development in South Sydney and Green Square.

This new scale of development brings with it the need to interact with state government agencies like roads authorities and public transport agencies to ensure that surrounding infrastructure can accommodate the new development. Indeed these larger sites are often encouraged by the state planning agency to be near new metro rail stations or in priority precincts.

The leverage of relatively small councils to coordinate with these state agencies is limited and the state government must become involved. State involvement is even more important when developments are responding to new infrastructure proposals announced by the state government, such as new metro rail lines. Local plans will not have anticipated the new infrastructure, so a planning proposal that seeks to vary the council rules is needed.

Understandably, local councils often object to proposals outside their own planning rules, so the project goes to the state government. We seem to be in a confused governance structure with these large projects that respond to state government initiatives but have to be assessed by local councils, who are often negative.

What is needed is a new governance structure that keeps small local projects at the local level and lifts large regional projects to a regional or state level. An analysis of data from the NSW Department of Planning’s Local Development Performance Monitor where annual planning data is collected demonstrates the problem with the current system.

In Metropolitan Sydney, there were 29,210 development applications in the 2014/2015 year (the latest on the DoPE web site) but only 377 of these were over the value of $20 million. That works out to only 1.3 per  cent of all DAs that were big projects but, amazingly, they represented 47.3 per cent of the value of all DAs. Small in number, but massive in value.

The big difference between large and small projects is that those under $20 million averaged 86 days to be approved while those above $20 million took three times longer, at an average of 271 days. Clearly there must be a better approach to managing the planning process for these large projects that represent only one per cent of the total but almost 50 per cent of the value of projects.

A better way to process large housing projects

The government’s Housing Monitor for Metropolitan Sydney indicates that two-thirds of new housing approvals are for apartments, with one-third for detached houses. This is a dramatic shift from a decade ago, and clearly the planning system must change to acknowledge this.

The process of change did begin in 2007 when the Planning Minister initiated Joint Regional Planning Panels (JRPP) to process large projects over the value of $20 million. The panels were composed of three state experts, including an independent chair and two local council representatives. The reports for the JRPP were prepared by the local council, which often led to tensions. With the arrival of the Greater Sydney Commission (GSC), the chair has changed to be the GSC’s District Commissioner who is nominated by the local councils. This leaves an even more confused governance situation with the panels now being more local and less regional.

There is a better way. With the arrival of bigger housing projects and the arrival of the Greater Sydney Commission with its six districts comes the proposal for six district planning offices (DPOs) that would process large projects over $20 million in value. The 1.3 per cent of large-scale development applications and all planning proposals would be processed by the relevant DPO under the direction of a district planner.

The remaining 98.7 per cent of local projects would be handled by the local council. The DPO would have direct relationships with government departments and it would prepare all planning reports for projects over $20 million in value. Staff would come from the individual councils in the district.

As other Australian cities get more larger apartment projects being proposed, they will also need to develop a governance system that ensure that district or regional thinking drives outcomes rather than local issues.