Retail industry bodies welcome suggested rezoning

Ambitious proposals by the Productivity Commission to relax zoning and planning regulations to make it easier for new retail sites to be developed have been welcomed by the Urban Taskforce and the Australian Retailers Association.

The proposals are contained in the draft report on the Economic Structure and Performance of the Australian Retail Industry.

The draft report declares that Australian retail is suffering because of planning and zoning regulations that are complex and excessively prescriptive.

The six proposals covering planning and zoning reforms are:

  • State and territory governments should broaden zoning within and surrounding activity centres to facilitate new retail formats in existing business zones.

  • Local governments should significantly reduce prescriptive planning requirements to facilitate new retail formats in existing business zones and ensure that competition is not needlessly restricted. 
  • Governments should not consider the viability of existing businesses at any stage of planning, rezoning or development assessment processes. Impacts of possible future retail locations on existing activity centre viability (but not specific businesses) should only be considered during strategic plan preparation or major review.

  • Local governments should facilitate more as-of-right development processes to reduce business uncertainty and remove the scope for gaming by competitors.

  • State and territory governments should ensure third-party appeal processes within planning systems include clear identification of appellants and their grounds for appeal and allow courts to award costs against parties found to be appealing for purposes other than planning concerns. 
  • State and territory governments should reduce the compliance costs associated with planning systems and development approvals by implementing the leading practices identified in the Commission’s recent benchmarking report on planning, zoning and development assessments. 

Aaron Gadiel, chief executive of the Urban Taskforce, says retail productivity has suffering for a long time, courtesy of “brutal planning regulations”.

"We're pleased that the commission has unambiguously stated that governments should not consider the viability of existing businesses at any stage of the planning, rezoning or development assessment processes,” Gadiel says.

Gadiel says the federal government needs to urgently act on this issue and enlist state governments in a major effort to reform out-dated planning laws.

"This is an urgent wake-up call to every level of government," he says.

"The Australian retail industry is in a rut, but government has the power to fix some of its most serious problems."

The Australian Retailers Association agrees with the suggested reforms.

ARA executive director Russell Zimmerman says it welcomes the commission’s acknowledgement that “planning and zoning restrictions are propagating the power imbalance between landlords and retailers at the negotiation table”.

The draft report also found that planning regulations that give businesses in some locations preference over others could be counterproductive.

The commission makes reference to numerous overseas examples to demonstrate that “stringent land use regulations are an important factor in constraining productivity growth in many countries”.

“Countries that generally have more flexible planning systems, such as the United States, have experienced higher rates of productivity growth in the retail sector than other countries with less flexible regulations,” the commission says.

“In short, planning and zoning regulation which restricts the location of retail outlets or store formats has a negative influence on retail productivity growth.”

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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