On SEPP-Gate and why it’s a national issue

NEWS FROM THE FRONT DESK: UPDATED – At first glance, the ditching of a sustainable planning policy in NSW designed to protect residents in new housing estates – mostly in western Sydney – from severe climate and flooding, and to encourage healthy liveable communities, looks to be a state issue.

It has damaging implications for NSW Premier Dominic Perrottet, who just in December stated his strong concern for equity for western Sydney in his Bradfield Oration.

In one fell swoop, his planning minister Anthony Roberts, in lunchtime chat to a property development lobby early this month, undermined the premier’s central tenet around equity and equal opportunity for the whole of the state, when he abandoned his predecessor’s Design and Place State Environmental Planning Policy,

But this incident, or SEPP-Gate as it now deserves to be known, is far bigger than NSW. 

It’s a national issue because NSW has led the way for other states and territories on good urban design, as it’s leading on energy policy and net zero targets thanks to some of its braver political leaders such as Matt Kean, Treasurer and Energy Minister. 

Queensland in particular was hugely disappointed. It had lived through the environmental vandalism wrought by former premier Campbell Newman who eviscerated an entire store of corporate knowledge around sustainability and energy efficiency in the state’s public service and left citizens to fend for themselves when it comes to protection for what is usually their biggest investment.

The property lobby, said one insider, “has everybody by the short and curlies”. 

“They go straight to the top and the rest of us do their bidding. A lot of planners listen to the developers. Once upon a time you’d go see the architect first. Today you see the planner and they shop around for an architect.

“There are planners who promote themselves as one stop shops for developers and they’ll push [their project] through like crazy.

“It’s the world we live in which is why we thought the SEPP was so good.”

But other states too have been in touch – from Victoria, the Australian Capital Territory and Western Australia for the same reason.

It’s a national issue because the argument from the developers to ditch the SEPP perpetuates the myth about housing affordability. 

Instead of focusing on national tax policy and the cost of money, it tries to shift the blame to state planning frameworks and wallows in the same tired line that’s it’s all about supply, as if housing is the equivalent of toasters or fridges. Besides we know the developers have plenty of supply that they carefully release to the market to maximise their profits, as they’re entitled to.

While there is truth to the argument that better housing design adds something to upfront costs but pays back in spades over the medium term and long term through lower running costs and better quality of life, there is no truth to the argument that urban planning frameworks add to the cost of housing.

Here’s the thing. When developers do their feasibility studies they factor in all potential costs and immutables: construction, design, yield or the number of housing or apartments they are allowed on the site, trees canopy cover in this case, avoidance of flood plains, and profits (no-one denies them the right to make a profit; we need developers to provide our built spaces and they need to remain financially viable. No question.)

What’s left over when they finish with the abacus is what they offer the land owner. In other words when it comes to urban planning it’s the land owner who carries the cost of the better standards, not the developer, not the home buyer; the home buyer pays what the market demands, and generally not a cent more if they can help it. And the developer simply won’t go ahead if they can’t carve out a standard profit from the project, which is only fair.

So instead of offering the landowner $1 million the developer might offer just $750,000. 

And keep in mind that there was always a potential for the SEPP to be phased in to allow fair treatment of existing contracts or land holdings.

So, look in that direction to see the root cause of all this agitation that wants to damn Sydney future residents, mostly in western Sydney to an uncomfortable, hot and dangerous future.

And watch for signs nationally that other jurisdictions catch this vandalism bug. 

It’s also a national issue on equity grounds.

It opens wider the yawning divide that’s increasingly obvious and decided by postcode. We saw it in the pandemic. There is a big contrast between those lucky enough to live in established leafy suburbs and those who must go to the outskirts of the city or any new estate to buy the cheaper properties on offer. Only to find soaring costs for heating cooling and travel. Not to mention that no-one’s thought about urban design to encourage healthy active transport, nor easy access to fresh food and produce outside of big shopping centres.

At its heart it’s saying that new residents don’t deserve the protection we now know are necessary for climate resilience and healthier outcomes.

The Urban Taskforce Australia asks, why should new residents pay for amenity that the other four million people in Sydney have not had to pay for?  The counter argument is we can’t afford to repeat the mistakes of the past.

To be honest there’s a lot we know now about the health outcomes of poor planning we didn’t know 10 years ago. But you can’t “unknow” that now and keep developing our suburbs the old way.  What we do now is intentional.

This is a national issues because equity is a national issue, and increasingly a volatile election issue. 

Thanks to the growth of social media and the many social and political rights movements in recent years, there are growing numbers of people increasingly aware of their rights and of differences in opportunity. And these people are increasingly ready to vote along these lines as both major parties are only too well aware. Both at the national and state level.

We asked the NSW Premier several questions around this.

We reminded him of some key takeouts from his Bradfield Oration on 2 December, Liveable, Workable, Beautiful: a new vision for Sydney:

• Our state and our city have been through testing times before, fire, flood, famine, war and disease. We cannot choose the circumstances in which we live –  but what we can choose is how we respond
• Our starting point is that we want everyone to be able to enjoy the world’s best quality of life no matter what your postcode is
• So my government will focus on policies to make that happen
• Our WestInvest fund marks the beginning of this shift: a $5 billion fund to improve quality of life in Western Sydney, Parks, modernised schools, local pools, main streets and eat streets.”
• WestInvest isn’t just about the money. It’s a campaign mindset for my Ministers, that will endure long after every one of the $5 billion is spent. It’s a mission to make it possible for everyone in Sydney – particularly in the West – to be able to love where they live. This is about building more than bricks and mortar – but culture and community too
• A liveable city must strengthen and support our family and community bonds, because they are what keep our society together
• In the past decade, Parramatta has emerged as a new productive powerhouse.
• And today we are building the industries of the future around the Bradfield Aerotropolis.

Adam Leto executive director of the Western Sydney Leadership Dialogue told The Fifth Estate there was not a not a lot of positive response to the scrapping the SEPP and he was pleased to see  widening concern about Western Sydney.

“I think it’s great that there are so many people in the planning and design space outside of the region are commenting on this” he said.

A part of the SEPP that seems to have infuriated the developers is the issue of mandatory light roofs. This is where a sense of weirdness come into play.

The science says dark roofs significantly increase the heat island effect which in Sydney’s west is already close to 50 degrees in summer. Light roofs cost no more. 

So what’s going on?

One of the people we spoke to on the developer side was furious that architects might have had a role in this. How dare they dictate the colour of the roofs. Light roofs are reflective, then they get dirty and are ugly. 

Strangely we’ve not seen that level of outrage over the aesthetic quality (not) of many apartment buildings and housing developments that have gone up in recent years.

The only conclusion we can make is it’s an ideological position. 

“We won’t be told what to do!”

And, “Let the market decide!”

But the market doesn’t have a clue if by market, we mean people who might buy a house once or twice in their lifetime. Do we really expect these home buyers to educate themselves on the science, safety and long term cost/benefit analysis of location and quality of housing each time?

We certainly don’t expect such sophisticated analysis when we buy a car. We expect the law will underpin a level of safety and viability of the product.

It’s what we pay governments to do.

If poor housing leads to worse health and equity outcomes there’s another issue that will land on the federal agenda. Witness how the feds have needed to chip in to help with the floods in northern NSW. They must also allocate funds to the states to pick up on the poor health or social outcomes that emanate from this free rein market ideology.

So what the developers mean by “let the market decide” is actually a choice made by only one side of the market. A good free market allows transparency and assumes full knowledge of all the costs and all the consequences.

It’s not what we’re getting here.

And then there is insurance.

Last time we looked you needed insurance to get a mortgage. So who is going to insure housing built in flood prone areas?  Oh, that’s right, the taxpayer. Who makes the profit from allowing the development of floodplains? Oh, yes, someone else.

The better quality developers won’t be happy

Another reason this is a national issue is that this SEPP-Gate debacle pulls into its murky swill the reputation of all developers – whether they be green and high quality or not. 

It tarnishes the reputation of the top players who are proud to be known as global leaders in sustainability with a playbook that attracts the biggest investors in the world. 

We’ve heard some of these developers were as shocked as we were that the whole SEPP had been pulled. They had problems with “maybe 30 per cent of it” and had reasonable cause to think these problematic areas would be removed or changed.

Certainly, they were not looking for dumbing down of the BASIX sustainability rating improvements or reversals on the commercial property elements related to lower embodied carbon.

And look we know that planning is highly complex and almost impossible to get right for everyone involved. It’s made up of a huge number of moving parts that affect, as we’ve seen above, health, climate resilience, financial security of residents. And that’s before we get to the madness (risk) of development itself with all the uncertainties involved in committing to a major built environment outcomes, two, three or even five years hence and making sure you don’t go broke in the meantime. (And you think being a professional gambler is a tough gig).

And we absolutely need developers to remain viable and to deliver the quality buildings where we live, work and play.

But what’s happened with this SEPP is that a few highly connected and very determined, second tier developers, with very good access to the minister, have risked the reputation of the whole.

The minister needs to revise his decisions on the SEPP, adjust the parts that don’t work and push the industry forward on the rest.

We are in a new era, one of fierce climate that must be incorporated into all of our future planning. If parts of this nation are now vulnerable to floods or it’s too hot there maybe we should stop building there.

If we need our planning schemes to deliver better cooling, health and welfare outcomes, we should do our best to make sure that happens. Not give carte blanche to a segment of the developer lobby to act for everyone else. (We hear that some developers at the lunch where the minister made his announcement were surprised that the whole SEPP was pulled; they expected parts to be removed but were prepared to work with the balance.)

We may never know how closely the Urban Taskforce or any other industry lobby was involved in writing the speech for the planning minister to announce the axing of the SEPP; we’re still trying to get a copy through the NSW Government Information (Public Access) Act 2009 (GIPA Act) for this.

But it’s irrelevant.

What matters is that the Urban Taskforce and a bunch of their nearest and dearest were delighted with the result.

Are we?

UPDATE: 5.00 pm 22 April 2022: This article has been updated to reflect new information and views and for additional clarity.