Proposed Design and Place SEPP

In brief 10 min read

The Explanation of Intended Effect for the proposed Design and Place SEPP, presently on public exhibition, signals major change to the assessment requirements for all development in NSW. Improving design outcomes in the built environment is important, but will the proposed SEPP be the right vehicle to achieve this objective, or will it add another layer to an already complex planning system?

In this Insight, we highlight some of the key changes and potential issues.

The Department of Planning Industry and Environment (Department) has been working with the NSW Government Architect to develop the Design and Place SEPP, a new planning instrument which will apply to the development of all urban land in NSW. The detailed drafting of the proposed SEPP is not yet available, however the Explanation of Intended Effect (EIE) indicates the SEPP will introduce a suite of new and revised design controls that must be considered at both the rezoning and DA assessment phase, and will apply to three scales of development (precinct development, significant development and all other development).
In addition to replacing State Environmental Planning Policy No 65—Design Quality of Residential Apartment Development (SEPP 65) and State Environmental Planning Policy (Building Sustainability Index: BASIX) (SEPP BASIX), the Department proposes to update the Apartment Design Guide (ADG) and introduce a new Urban Design Guide specifying criteria for precinct planning and large-scale development. Other changes are expected to follow, including consequential amendments to a number of other planning instruments to align with the Design and Place SEPP.
While the aim of fostering well-designed built environments is to be applauded, the proposed Design and Place SEPP has the potential to add yet another layer of complexity to Australia's most complex planning approvals system. The adoption of a 'principles-based approach' will require a significant shift and leaves unanswered some fundamental questions about how this will tie in with the existing statutory framework for DA assessment under Part 4 of the Environmental Planning and Assessment Act 1979 (EPA Act). Planning reform should seek to enhance confidence in the system, which comes through predictability and timeliness in decision making, and reducing the cost of participation where possible. The EIE foreshadows a proliferation of additional policy and guidance documents, the legal status and relevance of which is unclear. Will this come at the cost of clarity, timeliness and predictability of outcomes in the decision-making process, and is the SEPP the right vehicle to achieve more systemic change?
The EIE is presently on public exhibition and, in response to calls from industry for more time to respond, the Department has extended the time for making submissions to 28 April 2021. Later this year we expect the Department to exhibit the draft SEPP instrument, together with the design guides. The SEPP is targeted to commence at the end of 2021.

Overview of key changes

Given its wide reach, we have summarised some of the key changes foreshadowed by the Design and Place SEPP. We expect there will be more to say once the detailed drafting of the proposed SEPP becomes available later this year.

Design controls a new focal point for all development

The Design and Place SEPP will introduce a range of controls according to five principles for the design and assessment of places, applicable to all urban land in NSW. These controls will be mandatory considerations in the assessment of DAs and, in some instances it seems, planning proposals. The controls will apply to three scales of development (precinct, significant development and all other development):

This proposed approach to design controls leaves unanswered some fundamental questions about how this will tie in with the existing statutory framework for DA assessment under Part 4 of the EPA Act.

Precinct design considerations would apply wherever a requirement for ‘precinct plan’, ‘precinct study’ or ‘master plan’ is specified in another instrument, to any planning proposal greater than 10ha or 1,000 people, to any community scheme subdivision or subdivision of more than 50 lots, areas identified for local strategic planning and other similar special arrangements.
Significant development design considerations would apply to development on land within a precinct or bounded by a street on all sides, sites greater than 1,500m² in metropolitan centres (and sites greater than 4,000m² elsewhere) or with more than 500 people, all regionally significant development and state significant development (SSD) on urban land and all state significant infrastructure (SSI) including critical SSI on or adjacent to urban land. DAs for SSD and SSI will be required to demonstrate how the design considerations are achieved, and template Secretary's Environmental Assessment Requirements will be updated to align with the design considerations.
Other development design considerations would apply to development of individual buildings and spaces that fall within this development scale. Without any further criteria to understand what is within this proposed category, it is likely the design considerations would apply to a wide class of development, such that even complying development may be captured. The Department is still considering how the design considerations would apply to complying development, however this has the potential to introduce an unwelcome layer of complexity in obtaining a complying development certificate if private certifiers are required to assess subjective design matters.

This proposed approach to design controls leaves unanswered some fundamental questions about how this will tie in with the existing statutory framework for DA assessment under Part 4 of the EPA Act.

Assessing DAs under the new design controls

The intended mandatory design considerations have been canvassed only at a high level and will be refined as the Design and Place SEPP is developed this year.

While largely implemented through two guideline documents (discussed below), the EIE foreshadows a proliferation of other policy and guidance material, the legal status of which is unclear. This raises concerns about the potential for a lack of clarity, timeliness and predictability of outcomes in the decision-making process.

The ADG will be significantly updated for the first time since publication in 2015. The Department intends to specify 'place led' performance-based outcomes that must be achieved for matters such as solar access, natural ventilation, noise, apartment size and layout, deep soil and landscape design and car parking. For the time being, these design requirements will apply only to residential apartment developments, however in time it is intended to expand the ADG's application to other housing typologies. The ADG was only ever intended to be a 'guide', used flexibly, but the reality of its strict and prescriptive application by many councils has meant this intention was not realised. How will the Department ensure that the experience is different with the updated version?
A new Urban Design Guide will specify criteria to be met in the design of precincts and large-scale development. For larger projects, it is intended that developers use both documents depending on the project stage, commencing with urban design before using the ADG for architectural concept development and detailed design resolution.

There remain a number of other matters to be clarified during drafting of the Design and Place SEPP, including how it will apply to decisions being made under Part 5 of the EPA Act where the applicant is a public authority. Unless all decision-making authorities are required to have the same regard to the design considerations according to the relevant development scale, this creates a risk of inconsistent decision making.

Removing some layers, adding others

SEPP 65 and SEPP BASIX will be repealed by the Design and Place SEPP, with amended design and sustainability controls to be incorporated into the Design and Place SEPP.

However, the Design and Place SEPP will intersect with a number of other planning instruments for complying development, infrastructure, educational establishments and childcare facilities, Sydney region growth centres and the Western Sydney Aerotropolis. The relationship between these instruments and the Design and Place SEPP is yet to be determined, however the Department has foreshadowed that changes to the existing instruments are likely to be required.

There is likely to be a period of uncertainty after the Design and Place SEPP comes into effect, at least until the other instruments are amended to align with the new controls. In the near term at least, there seems to be an acceptance that the SEPP is likely to be inconsistent with some existing controls. This presents obvious potential for confusion in the decision-making process – and within the broader community in identifying which are the relevant controls, or 'principles' where there are no controls – which will need to be carefully managed.

The Design and Place SEPP will also intersect with the proposed Housing Diversity SEPP, with the new design requirements expected to apply to housing typologies such as build-to-rent, co-living and student accommodation. As the Housing Diversity SEPP remains in draft, there is an opportunity for the Department to ensure consistency with the Design and Place SEPP.

Changes to local controls

While no immediate change to existing local environmental plans (LEPs) and development control plans (DCPs) is proposed, the Department envisages that each council will revise its controls where necessary to align with the Design and Place SEPP as part of the next five-year review process that LEPs and DCPs are required to undergo. However, the Department has foreshadowed a change to the operation of clause 4.6 of the template LEP which provides a mechanism to vary development standards relating to matters such as height and floor space ratio where this can be justified on environment and planning grounds. The Department proposes that in order to justify such a variation, developers will need to demonstrate that the variation results in an improved planning outcome and 'public good'. Based on feedback from the NSW Government Architect, this latter phrase – not used at all in the EPA Act – appears to be interchangeable with the concept of public benefit.

As a sequel to the matters discussed in the Design and Place SEPP EIE, on 31 March 2021 the Department released its discussion paper on reforms to clause 4.6 variations which are intended to improve accountability in decision making under clause 4.6, including a new requirement for consent authorities to publish reasons for approving or refusing clause 4.6 variations.

Design review panels

The Design and Place SEPP seeks to expand the role of design review panels for all types of development. Design review is already an integral part of the assessment process for state significant and local development proposals, including through design excellence requirements in LEPs.

The Design and Place SEPP will introduce additional thresholds for design review which may be triggered based on project location, type, capital investment value, height and site area. These changes will be implemented through a new Design Review Guide which will address the required expertise on design review panels and clarify the scope of a panel's advice, and will give consideration to review timeframes. The Department expects design review panels to act as an advisory service to planning assessment teams within consent authorities, with design review to be conducted as part of the pre-DA consultation process.

If use of the design review process is to become more widespread, it will be critical to ensure the availability of a sufficient number of appropriately qualified panellists to avoid this additional pre-DA process delaying the overall assessment timeline.

Design skills

The Design and Place SEPP will place a focus on design qualifications of consultants. At present, a qualified designer is required for residential apartment developments.

Under the Design and Place SEPP, a registered architect (being qualified designer under the existing definition) will be required for all buildings with three or more storeys, and in the case of multi-residential buildings, four dwellings. New definitions will be introduced to recognise the qualifications of:

a registered landscape architect who will be required for the design of all open space greater than 1,000m²and
a qualified designer (ie an urban designer, architect with master planning skills or a landscape architect), who will be required for master planning of all precincts and significant development. Developers will need to provide a certificate from their designers to confirm they have the requisite qualifications.

The Explanation of Intended Effect does not examine the additional cost these requirements might introduce for projects, nor any consequential impact on housing affordability. These are matters which should be carefully weighed in the process of refining these provisions.

Planning proposals

In the rezoning context, these reforms propose a preliminary assessment be required to demonstrate how a planning proposal will satisfy the requirements of the Design and Place SEPP. This assessment will be considered at the Gateway stage, and the Department may impose conditions on its Gateway determination requiring consistency with the Design and Place SEPP.

In order to give effect to the Design and Place SEPP in the planning proposal process, we expect the more detailed package of amendments to include potential changes to the EPA Regulation and the Ministerial Directions made under s9.1 of the EPA Act. It is unclear whether only the precinct design considerations will apply, and we expect this may lead to some duplication in demonstrating satisfaction of the design requirements at both the planning proposal and later DA phase.

Actions you can take now

The period for making submissions closes on 28 April 2021 (extended from 31 March 2021). The draft SEPP is intended to have a very wide reach. Please contact us for more information, or if you would like assistance with preparing a submission.
Similarly, the discussion paper on reforms to clause 4.6 is now on public exhibition and submissions are invited until 12 May 2021. Please contact us if you would like further information.
We will continue to monitor the progress of the Design and Place SEPP and we expect a further opportunity to make submissions will arise later this year once the Department publishes the draft Design and Place SEPP and design guides. At that point there will be more detail about the proposed controls and how they will operate.

Proposed Design and Place SEPP – creating further complexity in our planning system?