Victorian councils are angry about changes to state planning laws that will make it easier for developers to bypass them and go straight to the state government to get projects approved.

The changes were gazetted as the state government last week announced a ten-year Housing Statement, which sets a target to build 800,000 new homes across the state by 2034 and pledges to rewrite the Planning and Environment Act “to build a modern, fit-for-purpose planning system”.

The document says under the current system decisions aren’t being made quickly enough, and if nothing changes Victoria will end up short of more than 25,000 homes a year over the next decade.

It says there’s a backlog of around 1,400 planning permit applications for multi-unit housing that have been sitting with councils for more than six months, including around 550 that have been waiting for a year.

Developers have welcomed plans to take planning power away from councils, cut the backlog and set strict deadlines for assessments and decisions.

Urban Taskforce CEO Tom Forrest said the statement should be a template for states like NSW.

“It shows how to go delivering the bold planning reform needed so the private sector property development and construction companies can deliver on the National Housing Accord targets,” he said in a statement.

The Municipal Association of Victoria (MAV) however denies councils are hindering the growth of housing stock, blaming developers instead.

“Planning permits for 120,000 dwellings are approved, but construction has not commenced,” deputy President Non-Metro Jennifer Anderson said. 

“The fact is it’s often more profitable to delay supply, so naturally that’s what some developers are doing. We need to look at how we can change the incentives at a system wide level.”

Transparency concerns

MAV says it wasn’t consulted on the newly gazette changes, which aim to fast-track ‘significant’ developments.

Under the reforms, developments can be considered significant in various ways, including how much they cost, whether they are being delivered in partnership with the state, or if they are deemed significant by the minister.

The MAV does not want to see these changes lead to less transparency for the biggest developments in the state. Partnering with local government will be critical in ensuring this doesn’t happen

Joseph Hawell

Meanwhile, MAV is also concerned that the changes give the minister the power to reduce or remove, without guidelines, a requirement for residential developments to include at least 10 per cent affordable housing to be considered significant.

The minister can also choose to ignore existing height and setback requirements,  Deputy President Metro Joseph Hawell said.

Cr Hawell said Operation Sandon had shown the need for more transperancy in the planning system, not less.

“The MAV does not want to see these changes lead to less transparency for the biggest developments in the state. Partnering with local government will be critical in ensuring this doesn’t happen,” he said.

MAV says the changes raise “questions and concerns” for local government and it will be seeking further clarity.

Levy on short stay accommodation

However, MAV has welcomed the 7.5 per cent levy on short-stay accommodation platforms like Airbnb and Stayz as a good start, saying a consistent, statewide approach is needed.

“This type of accommodation is clearly impacting on the long-term rental market and we welcome the funds being fully dedicated to social housing,” Cr Anderson said. 

The government says  revenue raised from the levy will go to support Homes Victoria in building and maintaining social and affordable housing across the state, with 25 per cent of funds to be invested in regional Victoria.

The introduction also means other local council charges on short stay accommodation will be removed.