The following is a response to the NSW Productivity Commission Green Paper. The Green Paper argued zoning is restrictive and recommended it be loosened. Unfortunately, the Commission misses the forest for the trees and fails to recognise the economic and strategic value of zoning.
Economic recovery has thrown up complex tasks for government, with minds across the state turning to how we can bring back jobs, economic strength and community wellbeing.
In searching for a “snap back”, governments have looked to everything from infrastructure-led recoveries to gas-led recoveries and agriculture-led recoveries. Whatever combination of sectors are chosen to lead us out of recession, one thing remains true – the proper planning of our cities, land and resources continues to be central to the work of government. In fact, the economic value of a coherent planning for cities has been counted in the tens of billions of dollars.
Every so often it becomes fashionable to decry the planning profession as “red tape” and dismiss our work as stifling economic development. Supply-side economists look at individual components of the planning system, pick apart their utility and draw broad conclusions about the usefulness of our profession. The recent NSW Productivity Commission Green Paper has taken this approach.
Planning is about setting a strategy with the community for how we want our cities and regions to grow or change. To action this strategy, we develop a suite of tools including funding processes for infrastructure, decision making frameworks and planning policies. Some of these tools are regulatory by nature, including the zoning of land, height and density controls and environmental protections.
The NSW Productivity Commission has focused so specifically on zoning it has missed the forest for the trees.
A functioning planning system is about translating our goals for a place into the policy that best achieves this intention. Zoning is just one of the many tools at the disposal of planners to do this.
However, the NSW Productivity Commission has focused so specifically on zoning it has missed the forest for the trees. It has misunderstood how zoning operates alongside other tools to achieve the strategic goals of a community. From this, the commission has drawn conclusions that threaten to undermine city and regional strategies.
The commission is particularly concerned with the operation of employment zones – those zones that permit uses such as businesses, offices, retail and industrial premises. It recommends the consolidation of employment zones as the current system “unnecessarily restricts where businesses can locate and how land can be used”.
Of course, it is true that zoning determines how land can be used; at its most rudimentary level the differentiation of employment zones stops things like heavy industry popping up next to your local café.
However, these zones also serve a more sophisticated function in achieving the economic strategy of a community; helping agglomerations of economic activity, preserving precious inner city industrial lands, creating hubs of innovation in regional communities and developing a retail hierarchy that makes sure small business can thrive in local neighbourhoods.
The NSW Productivity Commission is particularly aggrieved by rules that prevent supermarkets and other retailing from being developed in industrial lands and some business sites. While it may not suit proponents of standalone retail, this approach is critically important to the functioning of our cities.
Many, including the Greater Sydney Commission, have continued to highlight the importance of protecting employment lands in the inner and middle ring of Sydney, as it ensures residents across the city have access to the work that best suits their skillset.
The deliberate concentration of retail and service activity is the lifeblood of successful urban centres. The sporadic development of shops far from transport and services and in place of large industrial sites very rarely achieves city strategy.
Zones are a way to achieve a strategic outcome for a place. Reform of business and industrial zones in isolation from the reality of how they are used to shape places will be counterproductive and blind to the economic consequences.
The Productivity Commission has also alleged that zoning approaches are stifling housing supply. Many across our profession have done good work in unpacking the “supply-side myth” and I particularly commend the work of Tim Sneesby, Nicole Gurran, Peter Phibbs and Cameron Murray in that regard.
It is clear that governments are vexed by their failure to deliver on the promise of housing affordability, but using planning as a scapegoat is lazy economics.
Analysis shows supply has not been substantially constrained by zoned capacity and there has been sufficient stock in the pipeline for the last 20 years. Planning has actually operated to enable this pipeline, with approval rates as a percentage of determinations remaining consistently high.
Interventions proposed by the Productivity Commission to enable housing in certain commercial cores will undermine the productivity of this rare and limited land resource for offices, retail and services in the heart of our most significant centres.
It would be more productive for the Productivity Commission to focus on breaking down barriers to the delivery of affordable housing. Housing markets are supported by tax incentives which make housing investment an attractive asset class. Reforms to the planning system will not have a substantial effect on supply nor fix the housing affordability crisis while housing markets are so strongly demand driven.
Our country has a mammoth task ahead of us. Recovery from recession will take the concerted effort of government, community and industry. Planners can and will strive to make our tools more effective in achieving the outcomes of strategic planning and economic stimulus.
We can feel confident that our plans are well thought out and prepared in close partnership with the local community and industry experts. The delivery mechanisms planners use, like zoning, are more than capable of accommodating industry readjustment and innovation.
The decisions we make now will have a lasting impact. We cannot afford to throw away the processes that make our urban and regional economies strong, protect our environment and keep our communities healthy and engaged. There hasn’t been a more challenging time for NSW in living memory and as we rebuild a functioning economy, we need a functioning planning system to support it.
Juliet Grant RPIA (Fellow) is president of the PIA NSW Division and executive director of City Plan Strategy and Development.
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