Comment: ramifications of the new Melbourne Planning Scheme changes

Has the baby been thrown out with the bathwater? Quite possibly.

It has been a week since Planning Minister Richard Wynne introduced significant and immediate changes to central city planning that will inhibit the scope in which much of Southbank and Melbourne's CBD can be developed into the future.

In recent days, various sources have sought to analyse the changes applied to the Planning Scheme for the aforementioned areas. Alan Davies via The Urbanist has provided comment, Ratio Consultants have provided a concise summary of changes implemented, yet perhaps the best indicator has come via Urban Melbourne's forum where the changes have garnered pages of discussion since their implementation.

Of the many forum posts on the topic, one factor has become abundantly clear: a week's discussion has led to contradiction and uncertainty when trying to interpret and notionally apply the new rules. And therein lies the blunder in how the new changes have been implemented.

I have yet to see one person, representative or peak body state that the changes applied to the Melbourne Planning Scheme are unnecessary. The Victorian Government on the face of it does indeed have the best of intentions in mind; essentially promoting quality residential development over poorly conceived, maximum yield-driven developments.

Perhaps the best summary of the main issue surrounding the changes was from the Urban Development Institute of Australia (UDIA):

While the Institute will support the intentions of the Central City Planning Review, it has vigorously opposed the Minister’s action to introduce interim controls of this nature overnight, without any consultation with the urban development industry.

The merits of addressing issues such as amenity and preserving Melbourne’s liveability are very much supported by the urban development industry. However the blunt action by the Minister in introducing interim controls without warning has set the tone for this important and complex discussion.

Swift, uncanvassed action such as that taken overnight by the Planning Minister serves only one purpose – to undermine investor confidence, which can only lead to reduced activity.

Danni Addison, Victorian chief executive, UDIA

This is where now the baby is in danger of disappearing down the gurgler entirely.

It is all well and good to implement changes to the Melbourne Planning Scheme, but where was the tact or transparency in the process? By going about it the way they have, the Andrews Government has left the door ajar to stymie investment in central Melbourne. The ambiguity now cast over the approvals process is tantamount to inviting trouble.

I would assert that the method these changes have been implemented may undermine investor confidence, specifically in the short to medium term. And of course I refer to the rivers of investment capital flowing from Asia into Melbourne. This investment and subsequent boom in construction in Melbourne's heart represents a hefty and buoyant portion of the Victorian economy at present, with billions of dollars in play.

If prospective investors (of which there are no shortage) perceive the changes and the heavy-handed manner in which they were implemented to be counter beneficial, they will simply shun Melbourne altogether. Investment capital in this sense relates to the foreign-backed developers and is liquid; it will find the path of least resistance. Whether the capital remains in Melbourne or whether we are shunned in favour of other Australian or international cities remains to be seen, but on the face of it the events of the last week certainly will not help the cause.

This potential to forsake an untold amount of investment in Melbourne would have surely been enough to prompt the current Victorian Government to approach changes to the Melbourne Planning Scheme in a more thoughtful, encompassing manner… apparently not.

Lead image courtesy


Qantas743's picture

Very good analysis.

Sums up what many of us are thinking in a more tempered way.

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Bilby's picture

It's a difficult balance. Had the government allowed 6 months for the development industry to consider the proposed changes, no doubt we would have seen a massive spike in (possibly) ill-considered, rushed development proposals. To some extent, we have already seen this effect under the previous government's policy agenda for central Melbourne. And given the increasing volatility in terms of risk to property values and rental demand, this would only have served to tip the balance even further.

Likewise, the potential long term impact of a raft of rushed, poorly conceived buildings under the current planning regime needed to be considered. What would the Melbourne CBD have been like after the consultation period? How many more sites with 5m (or less) setbacks from neighbouring towers would we have seen? How many more small-scale heritage buildings and streetscapes would have been lost as a result? It's hard to know exactly, but the risk needed to be taken seriously by the Minister, and for my money, this was the only sensible approach.

The controls we have now are interim controls, after all - and as you say yourself, Mark, now that we have a year to make comment, the early signs are that almost everyone in the industry agrees that something along these lines was needed, and in general terms, the changes are positive for Melbourne.

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Nicholas Harrison's picture

I believe that the statement in the explanatory report that the amendment will not have any significant economic effects as the changes made are temporary is rather simplistic.

Even if the controls are temporary the fact that the government saw it necessary to introduce such significant amendments in such an abrupt manner is a clear signal to the market that the government is likely to introduce very significant permanent restrictions on the development potential of sites in central Melbourne.

The likelihood of significant restrictions on development in the future and the uncertainty in the meantime will have an immediate impact upon the market and investment decisions.

Politicians have to be very cognizant of how there decisions and statements are viewed by the market. A good example is when Bob Carr made the statement that Sydney was full in 2000 and the impact that statement had on development in Sydney for the next decade.

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Nicholas Harrison's picture

The statement in the explanatory report that there has been no significant update of the planning controls guiding development in the Central City since 1999 is completely wrong in relation to Southbank.

There was there was an extensive review, including an independent panel, which resulted in amended planning controls for Southbank in 2013.

Despite this the interim controls have been applied to both the Hoddle Grid and Southbank.

The government has not explained why the interim controls had to be mandatory rather than performance based.

I believe the poor outcomes the government has sought to address are the result of outdated, poorly drafted and inadequate policy direction in the Melbourne planning scheme rather than a failure of performance based planning controls.

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Qantas743's picture

My biggest fear is that the government will seek to enshrine any permanent controls through legislation thereby making it virtually impossible for a future administration to reverse parts or all of these changes.

At the moment, it would be just as easy for a future planning minister to overturn these changes to the planning scheme as it was to introduce them - and I'm sure Tricky Dicky knows this.

Like Nick has said, I'd be very interested to know what's in the MoU signed by Wynne and MCC.

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Riddlz's picture

Did anyone find any mention of whether or not there is flexibility with the new setback controls similar to the minister's discretionary power to vary the plot ratio?

Say in the case of Collins House with the 200m blank wall, if 468 Collins ends up being developed, surely some allowance of flexibility could be made to its setbacks from the eastern boundary to help cover up the blank wall where there wouldn't be any detriment to breaching that minimum setback.

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Nicholas Harrison's picture

In the interim controls there is no flexibility for the setback and overshadowing controls. Even the minister cannot approve a variation.

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Riddlz's picture

Ah, that's disappointing.

Can put that, along with the stricter overshadowing requirement, on the negative side of the new controls.

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db2's picture

@Nicholas Harrison,

No, there is "some" flexibility even with these new strict controls, please read this carefully:

"The amendments will not be applied to existing developments currently under assessment and the Minister for Planning has also indicated that there is scope for individual proposals to be exempt from some of these new provisions based on individual circumstances."

If the new proposal at 477 Collins Street is outstanding, and comes with open space, then the Minister, Tricky Dicky Wynne, "can" use his discretionary powers to let it through.

My suggestion to every one is to be calm. The sky is not falling.

I believe a reasonable balance will be struck. Daniel Andrews and the building unions will not want to kill a golden egg.

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Adrian's picture

The ratio report there says the 24:1 ratio is 'discretionary' not mandatory like the site setbacks.

Can anyone clarify with certainty ?

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Nicholas Harrison's picture

Plot ratio is discretionary the setback and overshadowing requirements are mandatory.

I have read all of the amendments and that is my interpretation.

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Adrian's picture

And the setback rule ..

Buildings above 100 metres in height will require tower setbacks to be the equivalent of five per cent of the building's overall height, and likewise these tower setbacks will be required to all boundaries or from the centre of a laneway above the podium height.

So the way I read that is that if the boundary is a main road or a wall of another site then it must be 5% from edge of site boundary, but if it's a laneway then the distance is taken from centre of laneway to above the podium.

So in other words for a site that buts up against another site (eg. Lighthouse, Vic One) the podium is OK to but up immediately against the neighbor (the 'concrete wall' we see on so many new ones eg. EQ) but the setback must be 5% from the edge of boundary for the main tower body itself - or in case of Vic One to the middle of laneway at rear.

Sound right ?

Also that plot ratio for New York - how the hell are those new super thin supertall towers being built with that supposed rule in place ?

PS. Oops I meant to post this reply here not the other related article !

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