The ACT Government is to be commended for its response to the Stein report. The response should put to rest any idea that land tenure in the ACT will move from 99-year leasehold to freehold or perpetual leasehold. It should also put an end to hidden subsidies to developers when leases are changed to allow more profitable uses, for example, from single residential to units or commercial offices or from sport and community use to housing. In future, the general pattern will be that owners of leases who seek to change the purpose will pay the full difference in value. However, the Government may grant remissions to encourage development, but where it does so, it put it before the Assembly for potential disallowance and must notify the amount of the remission in the Gazette.
Further, the calculation of the change of use fee … to be called a development-rights charge, not betterment … is to be clarified and based on Australian Valuation Office values. A reasonable deduction is to be allowed for demolition of existing buildings if that is necessary.
The Government has ensured security of tenure by providing for automatic renewals of leases on payment of an administrative fee and for 50-year commercial leases to be extended to 99-year leases.
The Government agreed with most of the major recommendations of the Stein report and has firmly cemented leasehold and the land tenure in the ACT. If it carries out those recommendations it will remove a lot of the uncertainty and unfairness that had hitherto dogged leasehold’s administration.
It should bring certainty to investment in the territory. Indeed, smart business investors should be attracted to the territory because they can buy leasehold property for a price that does not include an artificially inflated amount for the potential for redevelopment for a different use. That premium is only paid when an individual lease-holder seeks to change the use. If land is viewed as a business cost (rather than a speculative business itself), then that cost should come down.
The Government’s acceptance of Stein’s transparency recommendations was crucial. More thorough notification requirements and wider appeal rights can only help to improve administration of land and planning. It is perhaps a shame that the Government did not pursue Stein’s recommendation of a classic statutory planning authority with wide functions and answerable to the Assembly, preferring instead the Mant-Collins whole-of-government approach. This puts planning under ministerial control. There is some merit, though, in putting lease administration and planning under one umbrella and ultimately the responsibility of a minister who is in turn responsible and accountable to the Assembly.
Of course, in the long run the calibre of the people in the land administration and planning arms is far more important than the structure they work in. And of even more importance is the degree of transparency about their work.
Hitherto the main causes for disquiet in ACT planning have been lack of direct notification of land-use changes to those most affected; secrecy of the granting and the terms of granting changes in land use; delay and uncertainty in the process of getting planning approval for new structures and approval to change the purpose for which a lease is used.
It has meant that both developers, residents and community groups have been aggrieved. Essentially, that has been because developers got on paper a very pro-development administrative structure and ethos after self-government, but it was chipped back in a very uneven and occasionally arbitrary way … some got through with scandalously lower development-rights charges and poor planning and design controls; others were given tentative go-aheads and then shunted about. Residents, too, legitimately complained about having to do the chipping back to retain balance between development and amenity. Their elected representatives should have not put them in that position in the first place.
It has taken many inquiries and reports to restrike a balance and to get a promise to put in place a transparent planning regime. If the Government effectively implements those Stein’s recommendations that it accepts, it should go a long way to easing the disquiet. But will require attracting good staff and sensible and frugal application of any remissions to the development-rights charges. With respect to the latter, an onus will lie on MLAs to watch what happens because they will have the power to disallow changes to remissions policy.
There were 96 recommendations in the Stein report, many of them quite detailed. The Government was wise to swallow some of its own ideological proclivities to accept most of them. Having done so only question remaining is whether the Government carries through the spirit of the recommendations as well as their letter.