Review of Development Contribution Plans in Victoria

Published:
30 May 2011
Author:
Property Council of Australia

The Property Council of Australia has welcomed the Coalition Government’s recent announcement that it will embark on a programme of reform to Development Contribution Plans (DCPs) in Victoria.

The Victorian Government’s announcement follows the release of a landmark study by the Property Council in April 2011, into the current state of Victoria’s development contributions and the severe impact on housing affordability and land supply.

The Property Council’s report, Development Contributions in Melbourne’s Growth Areas – Why Contributions are Escalating, provided the Victorian Government and industry with an evidence-based understanding of the current state of DCPs and the impact of DCPs on housing affordability across Victoria.

Jennifer Cunich, Victorian Executive Director of the Property Council, said that, “the firsthand experiences of developers and other stakeholders operating within Melbourne’s growth areas in particular, is that the evolution of DCPs to their current form is unprecedented.”

The impact of continuing time delays and cost increases in DCPs as well as the ever expanding scope of DCPs is a significant contributor to the erosion of housing affordability in Victoria.

The level of detail in current DCPs also has the effect of delaying the approvals process and is clearly a contributing factor to the delays encountered in approval of Precinct Structure Plans through the necessity for involved panel hearings and other resolution mechanisms.

Ms Cunich stated that, “the core purpose of DCP documents is to contribute to the cost of the construction of new infrastructure to support the new community. Current DCPs do not correctly reflect the accurate distribution of responsibility between developers, growth area councils, Victorian Government agencies and other stakeholders and this must be reformed.”

The findings of the report have led the Property Council to formulate two key recommendations:

  1. The current approach to DCPs must immediately be reformed to institute a fixed charge across all of the Growth Areas.
  2. There must be a rigorous review of DCPs addressing scope and standards of provision in close consultation with industry.

The Property Council welcomed the Victoria Government’s announcement to establish a new DCP system and will work closely with the Victorian Government as part of the stakeholder reference group to ensure this initiative achieves positive reform across Victoria.

“The Property Council has noted rapid escalation in land and housing prices in the growth areas which has resulted in the erosion of housing affordability in that sector of the market. Without DCP reform, Victoria is going to face further impediments to the resolution of housing affordability issues both in Melbourne’s growth areas and across the entire state.”

“The Property Council demonstrated this clearly in our report earlier this year and I am pleased see that the Victorian Government has taken this step toward achieving reform with a clear view to involving stakeholders in the process,” said Ms Cunich.

The Property Council looks forward to working closely with the Victorian Government as part of the stakeholder reference group and will continue to advocate for measures to improve housing affordability across Victoria.

 

-ENDS-

Jennifer Cunich, Executive Director – (03) 9650 8300

Danni Addison, Public Affairs Manager – (03) 9664 4230 or 0408 861 408