Ending 'developer creep' in rural areas - what's changed in the seniors housing SEPP

For a long time, urban fringe councils have been concerned that State Environmental Planning Policy (Housing for Seniors and People with a Disability) 2004 (SEPP) has led to the urbanisation of rural land by providing opportunities to develop such land for seniors housing.

Media interest in the issue peaked earlier this year when some councils were said to be “in revolt” against the SEPP.

Recent amendments to the SEPP address these concerns by placing greater restrictions on opportunities for rural land to be developed for seniors housing, including for the first time, consideration of the cumulative impacts of proposed developments that are close to each other.

We discuss these amendments below.

1.   Incremental Expansion

A main concern for councils has been site compatibility certificates (SCC) being issued for concept proposals for seniors housing on rural land.

The SEPP displaces any prohibitions of seniors housing developments on rural-zoned land under local environmental plans (LEPs) where the rural land is deemed to be ‘land adjoining land zoned primarily for urban purposes.

This led to some developers of rural land which adjoins land zoned primarily for urban purposes (and which has been granted an SCC) to acquire adjoining parcel/s of rural land and expand the proposed development across a larger consolidated site despite the acquired parcel/s being further away from the urban land.

The result has been a steady expansion of rural land being developed for seniors housing, also known as ‘developer creep’ or incremental expansion.

The amendments – see clause 25(5)(c)(iv) and (5A) of the amended SEPP – address this by barring the issue of a new SCC for an expanded development site if:

• The adjoining parcels of rural land are proposed to comprise structures to be used as accommodation; and

• The total number of dwellings proposed for the expanded development site exceeds that of the original SCC proposal.

Treysten: A scenario that should no longer be possible

An example of incremental expansion was seen in Treysten Pty Ltd v Hornsby Shire Council [2011] NSWLEC 1364 (Treysten).

Council refused a development application for a seniors housing development. Among its reasons for refusal was that one allotment of the development site, which was acquired and added to the original development site later by the developer, was not in itself ‘land that adjoins land zoned primarily for urban purposes’, despite being the subject of an SCC.

The applicant successfully argued that the fact that part of the consolidated development site adjoined land zoned primarily for urban purposes did not prevent the whole development site from being considered as one contiguous parcel of land that adjoined land zoned primarily for urban purposes.

The amendments to the SEPP will prevent similar results, unless the adjoining, additional land has no dwellings and the total number of dwellings between the original proposal and the expanded proposal does not increase.

The amendments will likely reduce the profitability of adding additional rural lands to a development site and arrest the trend of incremental expansion.

The amendments have also confirmed that a current SCC cannot be modified to include additional land. Instead, a new SCC application will be required (clause 25(10)(a) of the amended SEPP).

Further, the amended SEPP clarifies that rural land developed for seniors housing remains rural land under the zoning of an LEP rather than being urban land to which other rural land could be developed as ‘land that adjoins land zoned primarily for urban purposes’ (clause 25(10(b) of the amended SEPP).

Note that these amendments do not affect the expansion of development sites within zones that permit seniors housing developments.

2.   Cumulative Impacts

Another concern of councils has been the lack of consideration given to the potential cumulative impacts of multiple developments on neighbouring areas.

Rural areas usually lack the infrastructure and local services needed to accommodate multiple, large developments of this nature and the new population they bring.

This has been addressed by a new requirement for a cumulative impact study to accompany SCC applications.

Where land subject to an SCC application is within a kilometre of two or more other parcels of land which either benefit from a current SCC or are the subject of a current application for an SCC (termed as being ‘next to proximate site land’ under clause 25(2A) of the amended SEPP), a cumulative impact study must be lodged in support of the application.

The requirements of a cumulative impact study are outlined in clause 25(2C) of the amended SEPP.

3.   Determining Authority

Previously, the determination authority for SCC applications under the SEPP was the Director-General of the DPE (or the Secretary following DPE restructure).

The amendments have now made the relevant panel the determination authority for SCC applications.

A relevant panel is defined under amended clause 3(1) of the amended SEPP to be:

… the Sydney district or regional planning panel constituted for the part of the State in which the land concerned is located.

Applications for SCCs are still to be made to, and assessed by, the DPE.

However, the determination of applications will now be made by the relevant district planning panel (Greater Sydney) or regional planning panel (regional NSW) upon receipt and consideration of a report and recommendation from the DPE.

This change increases the transparency of the process while still allowing councils the right to be notified of, and make submissions on, SCC applications.

Conclusion

The amendments will provide some relief to areas where incremental expansion of seniors housing developments has been an issue.

In addition, greater consideration will be given to the cumulative impacts of SCC sites that are close to each other.

Determination powers passing to relevant planning panels will improve transparency and independence in the determination process.

The amendments are effective now and apply to all applications for SCCs lodged, but not determined, after 10 November 2017.

Author: Steven Griffiths and Dennis Loether