Submission Better Apartments Draft Design Standards Arnold Bloch Leibler September 2016
1 Who are we? 1.1 This submission, prepared by Ken Gray, Partner (Head of Practice) and Andrea Towson, Senior Associate on behalf of the Property and Development Practice of Arnold Bloch Leibler Lawyers and Advisers ( ABL ), is written in response to the Better Apartments Draft Design Standards released by the Department of Environment Land and Water ( DELWP ) on 14 August 2016 ( Draft Standards ). 1.2 ABL s Property and Development Practice acts on behalf of Victoria s most prolific residential apartment developers, including: Bensons Property Group, Digital Harbour Consortium, Fridcorp Australia Pty Ltd, GurnerTM, LK Property Group, MAB Corporation, R.Corporation, Salta Properties, SP Setia and Walker Corporation. 2 ABL s Property and Development Practice is designed to be a one-stop-shop, covering all aspects of property acquisition, financing, development, construction, sales and leasing. As such, ABL is uniquely positioned to make submissions on the Draft Standards on behalf of the property development sector. 2 Key issues 2.1 While we support and endorse the development of a clear and unambiguous set of performance standards in respect of apartment design, in isolation the Draft Standards will fail to deliver better apartments. 2.2 In order to deliver better apartments, at the same time the Draft Standards are adopted, the supporting legal framework must also be changed in order to provide: less uncertainty during the planning permit application process; or increased consumer awareness and protection in respect of off the plan apartment sales. 2.3 In this submission we do not propose to comment on the merits of the various performance standards (as there are other design and planning experts, much better qualified to comment on this), except to say that: we agree with the Government s decision not to prescribe mandatory minimum apartment sizes. In our view, the development industry is best placed to determine and deliver apartment product which meets the needs of the market; and the Government s decision to focus on performance standards which will result in better design outcomes (i.e. the prohibition of borrowed light and snorkel apartments) is broadly consistent with the direction of Victorian Civil and Administrative Tribunal ( VCAT ) in recent cases and has already been adopted as best practice by leading developers in the residential sector. 2.4 Instead, our submission will outline the supporting legal framework required to enable the development sector (working collaboratively with Government) to deliver better apartments in a certain, timely and cost effective manner; for the ultimate benefit of the end consumer. 3 Adoption and implementation of performance standards should result in increased certainty during the planning process 3.1 In our experience, the majority of developers want to deliver quality apartments. It is what the market demands and what sells. Submission Better Apartments Draft Design Standards page 2
3.2 The difficulty many developers experience in delivering quality apartments is uncertainty during the planning permit application process. 3.3 The feedback we receive from many clients is that atypical or innovative apartment building types are often refused at the Council level (where the approval process is often highly political) and the matter is then referred to VCAT for determination even if the apartment design has been peer reviewed as part of the planning process and has the support of Council Officers and DELWP Officers (in respect of major projects). 3.4 As you are no doubt aware, the VCAT appeal process (even if a matter is eligible for inclusion on the fast-tracked Major Cases List) is both time consuming and costly. These costs in turn increase the overall project cost and are reflected in the end price of the development. 3.5 In our view, developers would more willingly adopt the performance standards set out in the Draft Standards if this resulted in increased certainty as part of the planning process. 3.6 The Draft Standards have been developed to address the specific apartment design and amenity issues raised through public consultation 1 listed below: (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) Building setback; Light wells; Room depth; Windows; Storage; Noise impacts; Energy efficiency; Solar access to communal open space; Natural ventilation; Private open space; Communal open space; Landscaping; Accessibility; Dwelling entry and internal circulation; Waste; and Water management. 3.7 In the absence of adopted design standards in the Victorian Planning Provisions, these amenity concerns have typically been assessed on a case-by-case basis during the VCAT appeal process. 3.8 Notwithstanding that the Draft Standards now comprehensively address the above listed amenity issues, there is still no certainty that a permit will be granted if each and every performance standard is complied with (and as a consequence each amenity issue which the particular performance standard has been designed to address has been satisfactorily addressed). In other words, a development proposal which strictly complies with the Draft Standards can still be: refused by Council (or DELWP in the case of major projects); or 1 Page 7 of the Draft Standards. Submission Better Apartments Draft Design Standards page 3
the subject of a third party (objector) appeal in VCAT. 3.9 In order to encourage early adoption and voluntary compliance with the Draft Standards by the development industry, strict compliance should be recognised and rewarded and the legal framework amended to reflect this. 3.10 Appropriate provisions should be drafted into the Planning Schemes which limit third party notice and review rights in respect of planning permit applications where a proposal complies with each and every performance standard set out in the Draft Standards. 3.11 In the event that a developer at the responsible authority s request participates in a formal design review and consultation as part of the planning permit application stage, the responsible authority should be bound by the recommendation of that design review. For example, if the design review recommends the issue of a planning permit in respect of the reviewed design, this recommendation should be reflected in the Council Officer s Report. 3.12 Provision should be made for the formal establishment of a design review panel to give a responsible authority specific independent design advice, which must hold legal weight (such as the inclusion of the panel s recommendations in the Council Officer s report), similar to that which exists in New South Wales ( NSW ). 3.13 The NSW State Environment Planning Policy No. 65 ( SEPP 65 ) allows a Council to appoint a design review panel during the development assessment process. The design review panel can advise on whether an apartment development meets the design principles and, if not, make recommendations on ways to comply. 3.14 The general function of the NSW design review panels is essentially advisory and is to: 2 provide independent expert design advice on applications and policy for apartment buildings; and assist in improving the design quality of apartment development in NSW. 3.15 The advice and recommendations of the NSW design review panel hold legal weight and can be relied on by Council when determining a development application under SEPP 65. 3.16 The implementation of a Victorian design review panel will deliver an increased level of expertise and understanding as to assessing alternative design solutions to comply with the Draft Standards (once finalised and implemented). A similar mechanism to the NSW assessment process should also be provided for in Victoria to ensure confidence and certainty during the planning permit application process. 4 Increased consumer awareness and protection off the plan apartment sales 4.1 A key driver of the Draft Standards is the Victorian Government s desire to crack down on Melbourne s dog box 3 apartments. 4.2 In our view, while adoption of the Draft Standards by the development industry may result in the delivery of larger apartments, the most appropriate and effective mechanism to crack down on dog box apartments is through increasing consumer awareness and protection in respect of off the plan apartment sales. 2 NSW Apartment Design Guide, Part 5 Design Review Panels 3 For details see Victorian Government to crack down on Melbourne s dog box apartments, published on 14 August 2016, 1:37pm on http://www.abc.net.au/news/2016-08-14/melbourne-dog-box-apartments-targeted-innew-design-guidelines/7732678 Submission Better Apartments Draft Design Standards page 4
4.3 Currently, there are countless examples of off the plan contracts of sale which fail to provide purchasers with clear, legible and scaled copies of plans and even the most basic design specifications. 4.4 If the Victorian Government seeks to increase consumer awareness and protection, the vendor disclosure obligations contained in section 32 of the Sale of Land Act should be amended to make it a requirement that a developer (vendor) provides the following precontract disclosure: (c) clearly legible, scaled version of plans and certain minimum specifications (making allowances for and acknowledging that consequential changes to plans and specifications may arise during the detailed design and construction phases of a development as live on site issues are identified by construction, engineering and design professionals, as is currently provided for and governed by section 9AC of the Sale of Land Act); the lot size of the apartment (by reference to a uniform standard of measurement, e.g. the Property Council of Australia Method of Measurement Residential), exclusive of any balcony or other open space areas identified, on the draft Plan of Subdivision annexed to the contract of sale 4 ; and an electronic link to scaled, coloured versions of the apartment plans and specifications for download and review by the Purchaser (at its election). 4.5 By imposing minimum pre-contract disclosure requirements, a purchaser will be equipped with the necessary information in order to be make an informed decision as to whether or not to enter into an off the plan contract of sale. 5 Conclusion 5.1 To summarise, in isolation the Draft Standards will fail to deliver better apartments. 5.2 In order to deliver this outcome, at the same time the Draft Standards are adopted, it is essential that the supporting legal framework must also be changed in order to provide: less uncertainty during the planning permit application process; or increased consumer awareness and protection in respect of off the plan apartment sales. Arnold Bloch Leibler, Lawyers & Advisers September 2016 4 See the decision of: Birch v Robek & Anor [2014] VCC 68 Submission Better Apartments Draft Design Standards page 5