17 November 2023
On 5 October 2023, the NSW Department of Planning and Environment (DPE) published new Guidelines for the Withdrawal of Development Applications (Guidelines). These Guidelines come as the NSW Government stands on the precipice of a major housing crisis which is projected to lead to a shortfall of 134,000 homes over the next five years based on data prepared as part of the National Housing Accord.
In this article, we unpack what the new Guidelines mean for the development application (DA) assessment process and explore practical steps councils can take to ensure compliance.
Section 40 of the Environmental Planning and Assessment Regulation 2021 (EPA Regulation) allows an applicant to withdraw a DA via the NSW Planning Portal at any time before the application has been determined. This gives applicants the option to withdraw a non-compliant or deficient DA on their own accord or at the council’s request.
DPE has identified an increase in the number of DAs being withdrawn before final determination. Since July 2021, a total of 9,040 DAs have been withdrawn across NSW, with some individual councils recording as many as 200 withdrawals during this period.
The withdrawal of a DA is not an inherently bad outcome if done in the right circumstances. In the case of a clearly deficient DA (as opposed to a DA which a council thinks might not be approved), withdrawing a DA can save a council’s time and resources by avoiding the need to assess the DA. This outcome is supported by the DPE’s Development Assessment Best Practice Guide 2017 (Best Practice Guide) which urges councils to encourage an applicant to withdraw a deficient DA found after lodgement.
To reduce assessment time frames, some councils have gone so far as to incentivise the withdrawal of deficient DAs at the preliminary assessment stage by offering refunds or partial refunds on DA lodgement fees.
While the early withdrawal of a DA can free up a council’s resources, DPE’s concern is that some councils may be encouraging the early and unnecessary withdrawal of a DA to improve the council’s DA processing timeframes and statistics. This practice will likely exacerbate the housing shortage crisis in NSW by slowing DA determination rates and reducing the number of housing projects in the construction pipeline. A culture of refusing DAs can also lead to dissatisfaction from applicants who want their ‘day before the consent authority’ before determination and can increase costs before the DA is even submitted.
The new Guidelines seek to accelerate the development assessment process in NSW, while ensuring that councils remain compliant with the Best Practice Guide.
When assessing an applicant’s request to withdraw a DA under the new Guidelines, a council must be satisfied that the request is consistent with six key principles:
The nature of these principles appears to indicate that there are examples of councils engaging in unnecessary requests for information and ‘practices of delay’, together with withdrawal requests which may not be justified.
There are several enforcement avenues under the EPA Act and Local Government Act 1993 (LG Act).
Section 23A(3) of the LG Act requires a council to consider any relevant guidelines published by the Department Chief Executive before exercising its functions. If a council fails to properly consider the new Guidelines, it will be open to the Minister for Planning and Public Spaces (Minister) to find that the council has not met the Minister’s expectations in relation to council performance. Such a finding may be grounds for the Minister to appoint a planning administrator and/or regional panel to exercise the council’s functions under the EPA Act.
As a first step, councils should familiarise themselves with the new Guidelines and ensure that their DA assessment procedures align with the Best Practice Guide.
Some practical tips for councils under the Best Practice Guide include:
Councils should also consider other powers available before requesting the withdrawal of a DA, including requesting additional information from an applicant under section 36 of the EPA Regulation.
It remains to be seen how these new Guidelines will be enforced in practice. Council officers should take care when issuing a request to withdraw a DA and consider obtaining legal advice to ensure that council policies are consistent with the Guidelines and principles of administrative law.
If you have any questions about the new Guidelines and how they will affect the DA assessment process, please get in touch with us below.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.