Significant changes to central city built form controls in Melbourne were approved by the Victorian State Government in November 2016. Amongst other things, these changes – known as ‘AmC270’ – introduced a Floor Area Uplift (FAU) scheme. Proponents of developments with a floor area to site area ratio of more than 18:1 are required to effectively ‘purchase’ the additional developments rights from the approval authority. The price of these development rights is not negotiated but, rather, is set via a schedule residual land value per square metre of saleable floorspace in the precinct in question. Once the value of the additional development rights has been determined by reference to this schedule, the proponent is required to deliver in-kind public benefits to this assessed value. Public benefits can include transfer of affordable housing to registered providers, incorporation of through block links in the development, embellishments to local open space and improved public realm in the vicinity of the development site.
AmC270 is a break through development in planning practice in Melbourne and Victoria generally because it places beyond doubt the principle that development rights are, in fact, created and owned by the community rather than automatically vesting in the private owner of the development site. This sets a platform for a broader system of development licence fees linked to the value of development rights conferred through a planning approval or rezoning. Such a system shares the value of these newly conferred development rights between the private land owner and the community, and provides a comprehensive and practical system of ‘value capture’ for the purposes of infrastructure funding.
SGS developed the architecture, mechanics and business case for the FAU scheme in AmC270. When the merits of this planning scheme amendment were scrutinised in a statutory public hearing prior to referral to Government for decision, SGS was called to provide expert evidence in respect of the FAU scheme and related planning provisions.