Levies for Non-Residential Land Uses Overview The Terms of Reference require the Committee to provide: Advice on how development contributions should be applied to residential and non‐residential development, including retail, commercial and industrial development, in each of these Development Settings. The Committee determined not to deal with this issue as part of its Stage 1 process, as it was keen to consult more widely about a non-residential levy and receive specific submissions on this aspect. It is proposed by the Committee that residential levies be set as follows: Growth Areas: per net developable hectare; Strategic Development Areas: per net increase in dwellings; and Urban Areas: per net increase in dwellings. The issue addressed here is how the levies set could apply to a wide range of non-residential uses in addition. The overarching principle adopted by the Committee is that non-residential development should be levied in proportion to the demand for infrastructure that the development generates a demand for. The current development contributions system provides for levies to be applied to some non-residential uses. The Development Contributions Guidelines 2007 applies levies to a ‘demand unit’ where one dwelling is one demand unit. The Guidelines include a table to convert a range of other uses to the common base of a demand unit. This equivalence table is reproduced as Table 25. Table Equivalence Table from the DCP Guidelines, 2007 Land Use Infrastructure Category Road Drainage Parkland Community Facilities Residential 1 dwelling = 1 demand unit 1 dwelling = 1 demand unit 1 dwelling = 1 demand unit 1 dwelling = 1 demand unit Retail premises 19 m2 fl. space = 1 demand unit 300 m2 site area = 1 demand unit not applicable not applicable Office/ service industry 121 m2 fl. space = 1 demand unit 360 m2 site area = 1 demand unit not applicable not applicable
Transport infrastructure External apportionment permitted in proportion to projected external It should not be permitted where the need for the infrastructure is entirely dependent on the development in the planning unit, even if there is some minor benefit to external users. Drainage infrastructure External apportionment permitted in proportion to projected external usage. It should not be permitted where the need for the infrastructure is entirely dependent on the development in the planning unit, even if there is some minor benefit to external users. Community and Recreation infrastructure External apportionment permitted for higher order infrastructure items only and in proportion to projected external usage. It should be based on standard population thresholds for the provision of infrastructure where these exist. STRATEGIC DEVELOPMENT AREAS Transport infrastructure Funds collected through application of the Standard Levy may be expended either inside or outside the defined development area but expenditure outside the area must be justified. External apportionment is permitted based on proportion of projected usage. External funds will generally be rate revenue or grants, not other planning units. Grants will generally be deducted before apportionment of external usage. Drainage infrastructure As for transport infrastructure (where relevant). Community and Recreation infrastructure External apportionment permitted for high order infrastructure items only and in proportion to projected external usage. URBAN AREAS All infrastructure External apportionment not permitted. a Supplementary Levy is permitted, external costs may be apportioned and where this occurs they should be based on both the principles set out in this chapter and the provisions in Table 30 above. Recommendations The Committee the following recommendations: That external apportionment be minimised by the careful choice of planning unit boundaries and the use of Supplementary Levies across a number of planning units. That external apportionment not be permitted for lower order community and recreation infrastructure. That external apportionment generally only be permitted for larger and more complex planning units, and in accord with the conditions set out in Table 30.
Conclusions and Recommendations Response to the Terms of Reference The Committee’s Terms of Reference require it to make findings to the Minister on a number of matters and a summary of the response to each of these is summarised in Table 35. Table Response to the Terms of Reference of Reference Committee response Report Chapter Any required changes or improvements to the proposed framework as outlined in the attached Position Paper, A new Victorian Local Development Contributions System (July 2012). The framework proposed by the Committee adheres broadly to that proposed in the Position Paper but includes a number of proposed adjustments and refinements. 2 - 7 Advice on the definition of the development settings for which levies will be established. These may include, but are not limited to, growth areas (both Melbourne’s growth areas and similar scale growth areas in some regional cities), regional settlements, rural settlements, established areas and strategic redevelopment sites. Three Development Settings are recommended: Growth Areas; Areas; Strategic Development 2 Advice on how development contributions should be applied to residential and development, including retail, commercial and industrial development, in each of development settings. The Committee has recommended Standard Levies for each setting and for residential and non-residential development. 3 - 7 Advice on how the new system should operate in different development settings Standard Levies, and in some instances the possibility of applying for a Supplementary Levy, have been outlined for each of the proposed Development Settings. 3, 5, 6 The scope of basis and essential infrastructure to be included in the Standard Levy for each of the infrastructure categories (community facilities, open space facilities, transport infrastructure, drainage infrastructure, public land). The Committee is recommending lists of Allowable Items upon which revenue collected may be expended. 4 The circumstances, if any in which a simpler apportionment of development contributions levies is needed. For example the ability to apportion standard rates may need to be retained, for transport infrastructure on or across the boundary of a contribution area. General principles upon apportionment should be permitted are proposed and apportionment principles are proposed for particular infrastructure types. 9 The circumstances, if any, in which councils should be able to agree to the provision of infrastructure or building works in kind, (including their valuation), in lieu of cash. Works in kind are to be permitted at the discretion of the Collecting Agency. Works in Kind are encouraged in Growth Areas and 10
each Metropolitan Growth area corridor and for different regions of Victoria, including: – per linear metre, by type. Signalised intersections – per item, by type. Roundabouts – per item, by type. Pedestrian operated signals – per item. Culverts – per linear metre, by type. Pedestrian paths – per linear metre. Cycle paths – per linear metre. Shared paths – per linear metre. Standard bridges – per square metre by type (e.g. vehicular or pedestrian/cycle over creek, road or railway). items due to the wide variation in local standards and conditions. The Committee has instead proposed that Design Guidelines be developed that provide benchmarks for what could normally be expected to be provided by a Standard Levy. The Committee recommends that the Design Guidelines be developed by the GAA in consultation with Councils and the development industry. A definition of non‐standard transport infrastructure for a standard construction cost cannot be determined and which will need to be individually costed (e.g. larger, more complex structures). The Committee has recommended Design Guidelines be developed that provide benchmarks for what could normally be expected to be provided by a Standard Levy. The recommended framework provides for Supplementary Levies to be available where the scope of works required is clearly greater than standard. The list of Allowable Items identifies items that may be allowable in a Supplementary Levy. 4 The level of justification required to access the levies for each development setting. The Committee has recommended varying levels of justification for each development setting, ranging from simple access to the ‘default’ Standard Levies to more rigorous justification for Strategic Development and Supplementary Levies. 3, 5, 6 An analysis of the issues identified by the Committee. The report includes detailed analysis of the key issues raised in these Terms of Reference and other issues raised in submissions. 2 - 13 A list of persons and organisations consulted. Lists of all those consulted with are provided in the Appendices. App B, C Consolidated Recommendations The Committee makes the following recommendations:
Kathryn Seirlis, Team Leader Integrated Planning Country Fire Association (16 April) Phil Harbutt, Manager Research and Strategy Greg Esnouf, Deputy Chief Officer, Regional Manager, Northern and Western Metropolitan Region Peet Ltd Penny Forrest, Senior Development Manager, South East Region Kris Wilson, Development Manager, West Region Discussion Group with Valuers Bradley Papworth, Director Residential Subdivision Practice, Charter Keck Cramer Brian Dudakov, Director Urbis City of Melton Forum (22 April) Ten Council officers, led by Bronwyn Pettit (Coordinator Major Developments) and approximately 25 industry and developer representatives MAB Corporation (1 May) Hall, Chief Operating Officer Maxine Cooper, Consultant to DPCD (31 January) Greg Bursill (28 February) B2 Small Group Meeting Participants Metropolitan Councils, 22 February Yarra David Walmsley, Manager City Strategy Mollison, Senior Strategic Planner Glen Eira Ron Torres, Manager of Planning & Transport Rocky Camera, Coordinator Strategic Planning Darebin Chris Meulblok, Manager Assets and Property Frankston Fiona Johnstone, Acting Coordinator Strategic Planning Manningham Vivien Williamson, Manager – Economic and Environmental Planning Metropolitan and Non Metropolitan Growth Area Councils, 27 February Cardinia John Holland, Manager Strategic Planning Hilary Rutledge, Coordinator Growth Area Planning Casey Liam Hodgetts, Manager Strategic Development Kathryn Seirlis, Team Leader Integrated Planning Greater Geelong Rob Anderson, Coordinator Urban Growth Shelly Taylor, Project Engineer Development Contributions Hume Michael Sharp, Manager Strategic Planning Aaron Chiles, Growth Areas Planning Coordinator Melton Bronwyn Pettit, Coordinator Major Developments Laura-Jo Mellan, Strategic Planning Coordinator
Whether there are physical or other conditions that warrant introduction of one or more Supplementary Levies for particular items; Whether the Standard Levy achieve an acceptable level of infrastructure provision without introduction of a Supplementary Levy/s; Whether infrastructure could be provided at a lesser standard/cost to avoid introduction of a Supplementary Levy/s; The standard and costing of the Supplementary Levy project/s to ensure that they have been reasonably defined and costed; and The affordability implications of the inclusion of a Supplementary Levy. Meeting the tests does not guarantee approval of the Supplementary Levy by the ISAC. Exhibition If the ISAC supports the application of the Growth Areas Standard Levy the Planning Authority when preparing a Planning Scheme Amendment can request the Minister: Exempt it from the notice requirements of Section 19 of the Planning and Environment Act 1987; and Authorise it to approve the Amendment under Section 11 of the Planning and Environment Act 1987. The approved Development Levy Plan must be in accordance with the approved Precinct Structure Plan for the areas The normal Planning Scheme Amendment process will need to be undertaken if a Supplementary Levy is proposed. Implementation A new Overlay such as a Development Levy Overlay (or VPP Implementation tool) will need to be prepared to implement the Development Levy Plan. The Schedules to the Overlay are illustrated in the table below. Schedule 1 Urban Areas Schedule 2 Strategic Development Areas Schedule 3 Growth Areas The Overlay should generally be applied to land that is zoned to allow for residential, business or industrial purposes. The Overlay does not need to follow zone boundaries but it should only be applied to zones where permitted use and development create a need for local infrastructure. The following table illustrates what zones the Development Levy Overlay can be applied to. Can the DLO be applied? Residential Zones Yes Industrial Zones Yes Business Zones Yes Rural Zones1 No Pubic Land Zones No Special Use Zones2 Yes 1 May be applied to the Living Zone 2 May not be applied to the Urban Floodway Zone Monitoring and Review It is important that the Development Levy System is regularly monitored and reviewed. Council’s Annual report will provide an overview of revenue collected and used, and Schedules to the Development Levy Overlay will be reviewed concurrently with Council’s Municipal Strategic Statement.
Table A Summary of Recommended Levies in each Development Setting Setting Standard Levy Residential Standard Levy Non-residential Additional Levies Growth Areas Metropolitan Residential $268,000 per net developable hectare Retail $161,000 per net developable hectare Commercial and Industrial $80,000 per net developable hectare Supplementary Levy available only in specific circumstances for transport or public land Residential $210,000 per net developable hectare OR $120,000 per net developable hectare Retail $126,000 per net developable hectare Commercial and Industrial $63,000 per net developable hectare Supplementary Levy available only in specific circumstances for transport or public land Drainage Levy available Areas Metropolitan Residential $3,000 per dwelling Retail $46 per square metre, Gross Floor Area Commercial and Industrial $16 per square metre, Gross Floor Area Not available Residential $1,500 per dwelling OR $3,000 per dwelling Retail $36 per square metre, Gross Floor Area Commercial and Industrial $13 per square Gross Floor Area Not available Strategic Development Growth Areas Metropolitan Residential $4,500 per dwelling OR $6,000 per dwelling Retail $46 per square Gross Floor Area Commercial and Industrial $16 per square metre, Gross Floor Area Supplementary Levy available only in specific circumstances for drainage, transport or public land Residential $4,500 per dwelling OR $6,000 per dwelling Retail $36 per square Gross Floor Area Commercial and Industrial $13 per square Gross Floor Area Supplementary Levy available only in specific circumstances for drainage, transport or public land Notes to Table A: Growth Area Standard Levy include all public land contributions, including Clause 52.01 contributions In Urban Areas, the Residential Standard Levy applies to the net increase in dwellings or lots. The Non-Residential levies apply to all new floor space, based on Gross Floor Area, above 100m2
This overlay applies to all land identified on the planning scheme map as DLO2 2.0 Levy to be Applied The levy to be applied is shown in the Table to the Schedule. to Schedule 2 AREA SUPPLEMENTARY DLO2(a) New Gumnut Strategic Development Area Residential $X,000 per dwelling Retail $XX per square metre, Gross Floor Area Industrial/ Commercial $XX per square metre, Gross Floor Area As approved in the DLP DLO2(b) Name Strategic Development Area Residential $X,000 per dwelling Retail $XX per square metre, Gross Floor Area Industrial/ Commercial $XX per square metre, Gross Floor Area As approved in the DLP Each Strategic Development Area to be identified separately (a, b, c). Strategic Development Area Standard Levy Options Metro Residential $4,500 or $6,000 per dwelling Retail $46 per square Gross Floor Area Commercial and Industrial $16 per square metre, Gross Floor Area Residential $4,500or $6,000 per dwelling Retail $36 per square metre, Gross Floor Area Commercial and Industrial $13 per square metre, Gross Floor Area SCHEDULE 3 TO THE DEVELOPMENT OVERLAY (COMMITTEE Shown on the planning scheme map as DLO3. GROWTH AREAS 1.0 Area covered by this development levy plan
Footpath upgrade Sid St 2011 $0.6m 10% In conjunction with replacement Footpath upgrade South Gumnut industrial park 2011 $3.2m 50% To facilitate new incubator sites North foreshore park upgrade 2012 $0.7m 80% From tourism strategy Proposed Levy expenditure budget 2013 – 2018 (updated July 2013) Project Planned delivery Estimated Cost (2013 $) Proportion attributed to growth Comments Roads and traffic Southcoast Road widening 2014 $5.4m 15% North Gumnut traffic calming 2013 $0.9m 100% Nutgum South industrial precinct traffic plan 2015 $1.4m 60% From Economic Development plan Bus shelter upgrade 2013 - 2015 $0.5m 50% In conjunction with replacement program East Road intersection upgrade $2.8m 20% In conjunction with VicRoads funded works Gum Bay trail 2015 - 2017 $1.5m 55% Tourism strategy, bicycle strategy, part State funded Gumnut footbridge 2018 $3.5m 50% Access to new residential Traffic light upgrade South St 2018 $0.4m 40% Improve access Community and Recreation Facilities Memorial Hall extension 2014 $1.8m 90% New adult day care Gumnut Meadows Community Centre 2015 $4.8m 40% New facility Part funded. Services Newgumnut as well Gumnut East maternal and child health centre upgrade 2015 $1.8m 95% Consolidating two centres and extending Gumnut North Senior Citizens Centre upgrade 2017 $0.9m 75% Extending to cater for growing aged population