The Thorny Topic of Planning & Development Viability

The question of how much weight should be given to development viability often arises in urban planning debates. It is a difficult and controversial topic.

The Greater Sydney Commission’s paper ‘A Metropolis that Works’ makes a hefty contribution to this topic.

The Paper deals with planning for employment land in Sydney. It makes a strong case for the need to provide small and large industrial precincts evenly across the Sydney metropolis in order to cater for everyday ‘urban service’ activities as well as manufacturing, logistics, knowledge and creative industries.

The Paper tackles head-on the role of planning in shaping land values and development viability. It argues that in relation to employment land, the case can be made for planning to shield lower-yielding activities from market forces:

“…While viability-driven, developer-led speculation and risk shape much of the urban landscape, there are also significant components integral to city function – whether in terms of productivity, sustainability or liveability – where spaces need to be safeguarded from the wider pressures of land value uplift. This is not only in terms of current needs and functions but also to ensure they have capacity to respond to future shocks, technological and economic transformation and community needs.” (Source - 'A Metropolis that Works' GSC, page 20)

This is an important issue that lies at the heart of many land rezoning debates.

The Paper argues that a certain amount of any well-functioning city needs to be zoned to provide affordable, well located land for the everyday ‘urban service’ activities and the creative industries that are needed both today and in the future to cater for growth.

It identifies various risks associated with residential and certain other types of uses driving out employment uses from such precincts, and it also promotes the use of ‘up-lift’ (in the form of height or density bonuses) as a mechanism to provide additional affordable maker spaces, and startup spaces.

In Victoria, we now have a new planning tool for promoting jobs and investment (the Commercial 3 zone). In deciding how and where to apply this zone, planners will need to consider many of the thorny issues flagged in this Paper – including what impact applying the Commercial 3 zone might have on achieving the desired local economic outcomes and on the market feasibility impact of the zone of various types of industrial, commercial and ‘mixed use’ development models contemplated under that zone.

Echelon Planning and Conceptus Property recently undertook an assessment of the planning and development feasibility of various commercial and mixed use development models in inner Melbourne. This work was commisioned by the Victorian State Government and it forms part of the evidence base behind the new Commerical 3 zone You can read more about this report here.