Mixed reactions to changes to new CBD height limits

In brief

The Melbourne Planning Scheme has recently been amended to introduce mandatory built form controls to the central business district and Southbank area. Managing Associate Meg Lee and Associate Kate Kirby report on the changes and on the reactions of key stakeholders.

Background

The Victorian Planning Minister, Richard Wynne, has introduced additional built form controls to Melbourne's CBD and Southbank that came into force on 4 September 2015. The amendment (C262) to the Melbourne Planning Scheme made the following changes for an interim period of 12 months:

• introduced mandatory controls to limit overshadowing to identified public spaces, including the Shrine of Remembrance, Federation Square and the State Library Forecourt;
• introduced wind analysis requirements for planning applications;
• changed discretionary height controls to be mandatory height controls;
• introduced a 24:1 site plot ratio for much of the CBD area; and
• applied mandatory podium height and setback requirements in other areas.

The planning scheme amendment also made Council a 'recommending referral authority' (an authority that is notified about planning permit applications, but does not have the power outright to have an application refused or conditions added to a permit), for permit applications for developments with a gross floor area exceeding 25,000 square metres. This change allows the council a say in large developments in the CBD area and to be a party to any appeal where the Minister for Planning is responsible for determining planning permit applications. Previously, Council was consulted by the Minister, but had no statutory role or right to appeal decisions.

The changes have sparked debate in the media because of the speed with which the controls were implemented and the lack of notice to stakeholders, as well as the perceived restricted nature of mandatory height controls. While the Minister since taking office has been outspoken in the media on apartment size and street level impacts (see our Focus on the Hodyl Report) and has carried out consultation on apartment design guidelines, the mandatory height controls came as a surprise to many. The changes, rationale behind them and the reaction of stakeholders are discussed in detail below.

Details of changes to Melbourne Planning Scheme

Below is a detailed overview of the build form controls that have been introduced to the Melbourne Planning Scheme for a period of 12 months. These controls sunset on 4 September 2016.

• Schedule 1 and 2 to the Capital City Zone (which covers most of the CBD and Southbank) have been amended to:
  • create a prohibition on the construction of buildings and work that would cast any additional shadow across the north bank of the Yarra (or within 15 metres of its north edge) or any open space at Federation or City Square or the State Library Forecourt;
  • add requirements to carry out wind analysis as part of permit applications;
  • require applications for developments with gross floor area exceeding 25,000 square metres to be referred to Council as a recommending referral authority, in addition to the other existing referral authorities; and
  • add a requirement that the responsible authority consider 'whether the development promotes a public realm which has acceptable wind conditions' and 'the views of the referral authority'.
• Schedule 3 of the Capital City Zone (which covers parts of Southbank) has been amended to:
  • create a prohibition on the construction of buildings and work that would cast any additional shadow across the Shrine of Remembrance and its northern forecourt;
  • require applications for developments with gross floor area exceeding 25,000 square metres to be referred to Council as a recommending referral authority, in addition to the other existing referral authorities; and
  • add a requirement that the responsible authority consider 'the impact the proposal will have on the Shrine and its northern forecourt in terms of amenity and overshadowing' and 'the views of the referral authority'.
• Design and Development Overlay Schedules 2, 40 and 60 have been amended to add a prohibition on granting planning permits for buildings and works that exceed the specified maximum building height (between 14 and 80 metres, dependent on the location of the development site) with the exception of architectural features, building services, landscaping, reconstructed or replacement buildings or existing buildings (subject to restrictions).
• Design and Development Overlay Schedule 7 ('Former Fishmarket Site Northbank' relating to an area bordered by Flinders Street, Spencer Street and King Street) has been amended to prohibit the construction of buildings or works that overshadow the Northbank Promenade 15 metres north of the north river bank and that increase overshadowing of Batman Park.
• Design and Development Overlay Schedule 62 ('Bourke Hill' relating to an area near Parliament House) has been amended to make all the listed maximum building heights (between 15 and 100 metres, depending on the location of the development site) mandatory instead of preferred, with the exception of architectural features, building services, landscaping, reconstructed or replacement buildings or existing buildings (subject to restrictions).
• Design and Development Overlay Schedule 10 ('Built Form Controls') has been added to the Melbourne Planning Scheme to cover large parts of the CBD and Southbank areas. This overlay prohibits the granting of permits that exceed the requirements set out in its schedule relating to podium height, street setbacks or tower setbacks, with the exception of architectural features, building services, landscaping, reconstructed or replacement buildings or existing buildings (subject to restrictions). The Schedule also specifies that permits cannot be granted for buildings or works that exceed the site plot ratio of 24:1, unless certain requirements and standards can be demonstrated. Applications for a permit must be accompanied by a site analysis and urban context report.
• Clause 22.01 of the Melbourne Planning Scheme ('Urban Design within the Capital City Zone') has been amended, so that where Capital City Zone Schedules 1 or 2 apply, new design standards have been introduced, as follows:
• the maximum site plot ratio should not exceed 24:1;
• towers above the podium must be set back a minimum of five metres from street frontages (rather than 10 metres as previously required); and
• there is no longer a design standard that developments above 45 metres be set back 24 metres from any surrounding podium tower development; instead, tower separation should demonstrate that towers are offset, and habitable room windows do not directly face one another and where considerations are given to the development potential of adjoining lots (noting that these were previously circumstances in which tower separation could be reduced from the mandated 24 metres).

Where Capital City Zone Schedule 3 and Design and Development Overlay Schedule 10 apply, the maximum site plot ratio must not exceed 24:1.

Clause 22.02 of the Melbourne Planning Scheme ('Sunlight to Public Spaces') has been amended to prohibit developments:

• in the Capital City and Docklands Zones from casting:
  • a shadow across the south bank of the Yarra River; and
  • any additional shadow across the north bank of the Yarra River (15 metres from the edge);
• casting additional shadows across St Paul's square, the Plaza and Atrium in Federation Square, open space in City Square, Queensbridge Square or the State Library forecourt; or
• casting additional shadows across the Parliament House steps and forecourt, and the Shrine of Remembrance and its northern forecourt.

Where, previously, shadowing was often assessed on 22 June, the amendments have largely changed the dates of assessment to be more restrictive. In most cases, assessments now need to take place on 22 September, or from 22 March to 22 September.

Transitional arrangements have been put in place, so that the amendments will not apply to permit applications already lodged before the commencement of the amendment, being 4 September 2015.

Reasons for changes

Amendment C262 was introduced as part of a long-term vision for Melbourne, with the aim of avoiding issues arising from an increase in the density and scale of developments. Such issues include poor amenity for neighbouring sites and public open space, due to wind and loss of sunlight, reduced opportunity for development on neighbouring blocks, and excessive population pressure on infrastructure and spaces such as footpaths and open areas. The Minister has stated that '[t]here hasn’t been a significant update of the central city planning rules since 1999, and it is our duty and obligation to bring plans in line with our evolving CBD'.¹

The implementation of the new controls follow the publication of the Churchill Fellowship report by Leanne Hodyl (see our Focus), which highlighted the challenge faced by planners at the Council and the development approvals division of the new Department of Environment, Land, Water and Planning, who currently have only non-binding tools and guidance to assist with assessing the appropriateness of tower proposals and balancing equitable development rights between adjacent lots.

Stakeholder reactions

Although there had been indications that the Minister intended to tackle the issue of high-rise and high-density development in the CBD, the 'overnight' nature of amendment C262, with no exhibition period or consultation, resulted in it being largely unexpected by Victoria's development sector. The amendment was exempted from the usual public exhibition and submission requirements. However, the controls will only be in place for a 12-month period while permanent controls are being drafted. The permanent controls will be subject to the usual processes, including public exhibition.² The effect of the interim controls is that there now cannot be a flood of planning applications lodged during the exhibition period.

While the Urban Development Institute of Australia supports a planning review of central Melbourne, it opposed the introduction of the new controls without consultation, and has expressed concerns about the 'longer term implications' of the decision to introduce the interim controls, indicating that it could 'undermin[e] investor confidence'.³ The Property Council is also apprehensive that the development of some CBD sites would now be unfeasible.⁴ Since the introduction of the new controls, there have been no new applications for planning permits to build inner-city towers in Melbourne.⁵

Some developers are now considering alternate mechanisms to avoid application of the controls to their sites. For example, CBus Property had previously applied to build a 74-storey tower at the former Suncorp site at 447 Collins Street, Melbourne, and the application was refused by the Planning Minister because of concerns that it would overshadow the Yarra River.⁶ CBus did not lodge an amended application before the new controls came into force, and has subsequently requested an amendment to the planning scheme to exclude the site from the new controls.⁷

While some have concerns that the amendments decrease the value of CBD land, the head of development at Grocon, Dan McLennan, was quoted in the Australian Financial Review in September saying that it was 'a bit too early' to know if the interim measures would reduce investment.⁸ Josh Rutman, sales director at CBRE, told The Age that the new height and density controls are 'still extremely generous in a global context when compared to high density cities like Hong Kong and Tokyo'.⁹

It is undeniable that it is important to ensure that CBD development is sustainable and to preserve development opportunities on neighbouring blocks, rather than allowing the 'first in' to maximise development opportunities, and compromising the design of later developments.¹⁰ The interim controls will assist in achieving this development equity. Additionally, the interim controls will help to preserve amenity in public spaces, by maintaining access to sunlight and helping to decrease the creation of 'wind tunnels'.

While the Minister's approach in bringing in interim controls without consultation or warning has caused some shock and initial anger, particularly from the development sector, few would disagree with the rationale of the Minister's decision to review central Melbourne's planning 'to ensure the city maintains its character and celebrated liveability'.¹¹ The Minister has indicated that he will  'work closely with the City of Melbourne, CBD businesses, residents and the development industry to introduce strategic plans.'¹² No doubt this consultative approach will be welcomed by the council, residents and the development sector. The challenge for the permanent controls will be to strike an appropriate balance between encouraging development and investment opportunities in Melbourne, and retaining and enhancing the city's character.

Next steps

The Planning Minister has indicated that he will consult with stakeholders on the final version of the built form controls, to be implemented in the second half of 2016. Developers and landowners who have a significant interest in the controls should monitor the Council and Department of Environment, Land, Water and Planning websites for opportunities to participate. In the interim (until September 2016), the new build form controls are likely to require developers to be more creative with their designs, but may also cause some to stall proposed developments until there is greater certainty about the final controls.