UDIA NSW Industry Luncheon

I'm pleased to have the opportunity to talk with you today about my vision for Sydney in the context of the State Government reform underway -the planning White Paper, Draft Metropolitan Strategy, the Sansom Local Government Review and rewriting of the Local Government Act and City of Sydney Act.

These reviews —currently being undertaken separately —are, in fact, inextricably related. In Australia (and globally) planning and development are key responsibilities of local and city governments.

That's not a coincidence. Planning is the complex business of managing and developing cities and towns, and protecting sensitive rural and environmental areas. The role of planning is to help create high-quality, inviting, liveable and sustainable places.

In parallel, the role of a democratically elected local council is to provide leadership and governance for its local area. Good local government engages with its communities to establish an integrated vision. It understands the aspirations of its people, leads debate on important issues affecting our future, and delivers results on its vision.

The City of Sydney endorses the need for a modern, 21st century system of local government and planning in New South Wales to secure the environmental, social, cultural and economic sustainability of our city.

We agree with many of the reform proposals but have a number of significant concerns, which I will outline shortly. Our fundamental problem, however, is with the lack of an integrated framework likely to build Sydney as the prosperous, sustainable global city that it should be.

SYDNEY'S IMPORTANCE

Our prosperity as a nation is linked to Sydney's prosperity and investment in Sydney is a national economic priority. This is Australia's global city. Its unique environmental, social, cultural and economic characteristics mean that we consistently place near the top of major global city and liveability indexes.

And the City of Sydney local government area is the economic driver and symbolic focus for Australia's global city.

Our City is home to 20,000 businesses, with 380,000 people travelling to work in the centre each day, with a further 483,000 joining them for shopping, business, entertainment or education.

Our local government area has an annual Gross Regional Product or more than $100 billion. This is about 7.5 per cent of the nation's Gross Domestic Product, and almost one-quarter of the NSW economy.

We are Australia's leading business and financial centre; a major tourist destination; and a centre for retail, education and cultural offerings.

But, as many of you know, Sydney's share of GDP has declined, partly due to the decline in the resources boom. In international rankings, we are regularly held back by poor environmental sustainability, congestion, public transport and affordability.

IMPLEMENTING SUSTAINABLE SYDNEY 2030

When I became Lord Mayor in 2004, I wanted a long-term vision and plan to secure the future sustainability of our City. We consulted widely and the result was Sustainable Sydney 2030, a plan that has won broad acceptance.

The City Council is in a robust financial position to deliver on its strategy to secure our environmental, economic, social and cultural sustainability. We have balanced budgets, no debt and a $1.9 billion infrastructure program over 10 years.

Sustainable Sydney 2030 set ambitious goals to reduce greenhouse emissions across our own operations and across the City by 70 per cent of 2006 levels by 2030.

At the City, we have always made the case that action in cities is critical because these centres of mass population cause around 75 per cent of the world's emissions. With global warming of two degrees, we risk catastrophic climate change—yet recent projections show we are headed for a four to six degree change.

We are doing extensive work to identify the lowest-cost and most effective options to reduce green-house gas emissions—strategies that others can replicate to help achieve city-wide targets. We've cut emissions from our own operations by 19 per cent since 2006, and current contracts for projects such as building retrofits, LED street lights and solar panels will further reduce emissions by 29 per cent by 2016.

Funding is also in place for major works associated with joint City and State projects and priorities.

We are providing $220 million to transform George Street with the light rail. It will be a tremendous boost for Sydney and a real game-changer—not just for better transport, but also the transformation of our CBD for the next century. Our plans for the laneways along the pedestrianised main street will provide opportunities for a rich new mix of businesses and feed new life into the surrounding streets.

We've allocated $37 million to integrate Barangaroo with Millers Point and the CBD, to help re-establish the long-lost connections obliterated by roads and flyovers and badly sited buildings. The development is an opportunity to reclaim the City's western edge, to provide necessary new office and residential space, new cultural venues, new parklands and more public open space in an increasingly dense city.

And we have $70M committed to cycleways. The State Government's strategies recognise cycling is a vital to ease congestion, with targets to more than double the mode share of riding by 2016. Subject to State approvals, we are "shovel ready" on Kent Street, a route that provides access to Barangaroo and the whole western financial district, where cycling is hugely popular with workers as a way of avoiding congestion and staying fit.

For Green Square, we've $440 million in projects approved to catalyse the $8 billion development that will provide for a projected 40,000 new residents and 22,000 workers. Our central role has been to ensure that planning controls allow for growth, while keeping development innovative, sustainable and respectful of existing neighbourhoods.

The funds will provide for basic physical infrastructure— including new roads, footpaths, sewer and drains—as well as essential environmental, social and cultural infrastructure.

We've engaged the winners of an international design competition for an innovative library and plaza in the Town Centre. We've endorsed a concept plans for a recreation and aquatic facility; approved a master plan for community facilities and childcare in the former South Sydney Hospital site; and planned new open green space, including a 6,500 square metre park in the Town Centre, a larger park of 15,500 square metres in the nearby Epsom Park precinct and other smaller parks. A project is underway to harvest and reuse stormwater for residential, retail, commercial and public facilities.

Our program across the City of Sydney local government area also includes capital works such as revitalising city laneways, creating and improving parks, planting trees and gardens, and renovating community buildings - as well programs to encouraging greater diversity through supporting small bars, planning for a night-time culture, encouraging creative businesses and start-ups, and supporting our urban villages.

And we have established a reputation for leadership and excellence that has been recognised by numerous local national and international awards.

Our major events—including New Year's Eve, Chinese New Year, Biennale, Sydney Festival, Sydney Film Festival, Sydney Writers Festival and Art and About—bring visitors and tourists to the city.

This is just some of the diverse range of work is needed to foster a multilayered, diverse and energetic city where Sydneysiders want to live and work — and that attracts global capital and global talent.

"ONE-SIZE-FITS-ALL" - DOES NO FAVOURS

In our submissions to the State Government reviews and reforms, the City of Sydney has put the case that our local government area is unique within the NSW context, and that its unique requirements need to be acknowledged and addressed.

A "one-size-fits-all" approach does no favours to NSW.

The Sansom Local Government Review proposes amalgamating up to seven inner-Sydney councils to create a new "super Sydney" council area. The proposed council area would be five times bigger than the current size of the City of Sydney, with over 800,000 residents by 2030 - that's a population larger than the entire state of Tasmania.

The Review claims that only a "super-council" can engage in significant strategic planning, or undertake regional projects such as light rail or cycleways. But that is precisely what we're doing at the City, with our extensive studies and planning for George Street light-rail, and our expanding cycle network, both aimed at reducing road congestion.

I know from experience of the 2004 amalgamation of Sydney City, South Sydney and part of Leichhardt that the changes take years to bed down. It involved integrating more than 1600 staff and three sets of planning controls; aligning IT systems and multiple rate categories; and standardising all services and contracts.

A new mega-amalgamation would divert time and resources from urgent projects such as the George Street light-rail, the Green Square Town Centre, or pressing needs such as child-care centres for city workers.

And as the mayors of the affected councils pointed out in a joint submission, such an amalgamation would be high-risk, with no demonstrated benefit. There has been no cost-benefit analysis and no business case.

The Government's proposed revision of the Metropolitan Strategy would also subsume the City into an enormous region of 17 councils, from the CBD to north of the Harbour, east to the ocean and west to Ryde.

This is unwieldy and unmanageable. Willoughby and Burwood and the City of Sydney have few challenges in common. The distinctive needs of the City of Sydney could be ignored and the scale of development and transport issues within the City could easily overwhelm needs in neighbouring areas.

In 2012-2013, the City processed around 3.5 billion worth of development applications, with major urban renewal projects across the City, and a residential population forecast to grow by an additional 35,000 by 2016.

The Planning White Paper, as it stands, also does not acknowledge any essential differences between the centre of the metropolis and other areas. Yet the success of the approach in Vancouver, Canada—presented as a model in the White Paper—points in a different direction.

VANCOUVER AS A MODEL

Through the Vancouver Charter, the Provincial Government of British Columbia provides the capital city with a more flexible planning regime than elsewhere in the Province.

It is generally recognised in Vancouver that sound and progressive planning and quality urban design have been significant for the city's success. The system provides significant autonomy for local government and encourages city planners to be creative city-builders facilitating better results—rather than gatekeepers of the rules.

The over-arching vision for Vancouver is to be "the greenest city in the world". The planning system has made the case - through health statistics, satisfaction surveys, and cost-of-living analysis - that the way to get there is through ecologically sound, denser cities, with less reliance on cars and freeway construction. The pay-off for consolidation is improved physical and social amenity and general quality-of-life.

The Vancouver system, however, depends on a variety of tools, many of which the NSW White Paper proposes be abolished.

The Vancouver system is based on a well-defined hierarchy of a progressive and innovative vision and plans, and the effective implementation of those plans. Importantly, the Vancouver system rejects the idea of choosing between fast decisions and great outcomes. "Faster and worse" is not an acceptable outcome.

Vancouver retains tools like Floor Space Ratios; density bonuses, a heritage density banking system rather like our own transferable Heritage Floor Space scheme; and Community Amenity Contributions that are similar to Voluntary Planning Agreements, but with more flexibility for innovation than envisaged in the White Paper.

FLOOR SPACE RATIOS

Vancouver - and Brisbane, another city referenced in the Review - both rely on detailed locality-based zonings and Floor Space Ratios.

In a city centre, with very open land use zoning, where rising land prices mitigate against certain uses, regardless of their value to the city as a whole, differential FSRs are an effective tool to manage uses - for instance, the competitiveness of hotel accommodation and commercial offices compete with more financially attractive high-rise residential.

FSRs provide a straight-forward way to approximate development land values for different uses without the time and cost to prepare detailed architectural schemes. They provide certainty for investment and were expressly included in the Sydney LEP 2012 because of the community's desire for certainty.

We are especially concerned about unintended impacts on the commercial core of the CBD if FSR controls are removed. And absolutely no evidence is provided to back the case. It would remove one option for us to use in broad zoning to manage, for example, the hotels and commercial uses essential for the functioning of Sydney as a global city.

It would increase the potential for residential to price commercial uses out of the city if they competed to fill the same envelope height. Fewer and broader zones, as proposed, can only work if floor space ratios for different uses can act as incentives for strategically significant uses.

It would also remove an important long-standing tool in the City's development incentive schemes in Central Sydney and Green Square. FSR controls can be used through exemptions to encourage particular uses or particular objectives, such as end-of-trip facilities, or the fine-grain retail on laneways, and as density bonuses to achieve community infrastructure in the Green Square urban renewal area.

Floor space ratios are essential to our Heritage Floor Space scheme - there is currently a "bank" of $28 million worth of tradeable floor space in the hands of various private owners which provides an incentive to conserve heritage buildings.

Our submission on the Planning White Paper argues that if the Government intends to introduce envelope controls for all sites in NSW, it must retain the FSR system as an option - at least for the City of Sydney and possibly other urban centres.

Every other major city mentioned in the White Paper retains FSRs, as well as other planning tools. If envelopes alone became the planning tool in the City Centre, planning proposals would replace DAs. That would not be "efficient".

THE CITY OF SYDNEY AS A MODEL

In many ways, the City of Sydney has the sort of planning environment that the White Paper aims to achieve.

We have done the hard work in developing a common vision through consultation - it's there in our strategic plan, Sustainable Sydney 2030.

In the Central Sydney Planning Committee we have an efficient determination body achieving outstanding results in a timely and efficient way.

At Harold Park, we used an up-front planning process with the site owners and the local community to revised planning controls. We achieved an extraordinary level of consensus for increased densification in exchange for new parkland, community facilities, affordable housing and improved connections for walking and bike riding.

Given our thoroughness and commitment to quality, the City has achieved some outstanding results that will continue to benefit Sydney in the longer-term.

To quote one of these, the Dexus development at Number 1 Bligh Street. In May 2010, before the building's completion, Tony Gulliver, then Dexus head of development, wrote commending the "significant role" the CSPC and the City had played in the project's development.

He wrote that "We were aware that a number of the standard planning controls and constraints in the approved site master plan had been deviated from in the final scheme" and the company was concerned that this could, in other regulatory realms, have led to "a failed application and a massive opportunity lost".

His letter continued that "the support we received was professionally enthusiastic and encouraging at all times, and focussed on the best outcome for the City…The fact that our subsequent Stage 2 Development Application did not receive one objection following public exhibition is testament to the merit of the entire process."

Our Design Excellence provisions have delivered other quality buildings—The Hyde and The Residence, Eliza, Lumiere, ANZ's new tower in Castlereagh Street and VSQ North among them.

The provisions require a competitive design process for buildings higher than 55 metres in the City Centre, or 25 metres elsewhere. FSR controls are essential to this approach, as the City offers 10 per cent additional floor space for undertaking a competitive design approach.

Envelopes without FSRs typically lead to blocky buildings that look like the envelope. The experiment was tried for four years in Ultimo-Pyrmont, with the Regional Environment Plan for residential buildings.

This resulted in a rash of awkwardly shaped, bulky apartments and courtyards - buildings with low floor-to-floor heights, low and minimal foyers, and no roof expression at all.

When the controls were reviewed, the State agreed that FSRs should be reintroduced to save Ultimo-Pyrmont.

CODE BASED ASSESSMENT

The White Paper refers to a streamlined assessment path in Queensland, but development there still needs to demonstrate good and compliant outcomes.

There are some claims that code-based planning in Brisbane has led to substantially reduced determination times for major projects. This, however, is true only if the developments actually comply with the code.

In the case of two Brisbane Meriton Apartments projects - Infinity and Soleil - the actual determination times averaged 277 days. This compares unfavourably with the average merit assessment determination times delivered by the CSPC in Sydney for projects of a similar scale.

And the actual 276 days taken for Infinity did not, by the way, include any public notification or exhibition period, whereas applications before the CSPC always include a public notification period of at least 28 days. So it seems that our City is doing better than the "models" referred to in the White Paper.

Based on our record of quality and newly-adopted planning controls, the City has put the case for using our exiting planning controls as locality-based codes that meet our unique need. Generic codes developed by the State should be optional 'model codes' rather mandatory codes.

INCREASED COMPLEXITY

In many areas, the White Paper seems to propose a system that is more complex than the existing system, without guarantees of the quality outcomes we have been able to deliver so far in Sydney and of which many of you have been a part.

There are six paths for a development application, with multiple decision bodies and decision paths. This is one of the areas that most need transparency, clarity and simplicity - along with accountability.

The excessive weighting towards up-front consultation alone is unlikely to benefit anyone. It will be expensive for you, with the need to employ new consultants making promises that the assessment system won't be able to deliver. Projects take time and, without ongoing engagement, people are likely to object.

Successful cities genuinely engage with the whole cross-section of their constituents - whether it's the business community, residents or institutions or other levels of government. We did that in formulating and delivering on our Sustainable Sydney 2030 strategy, giving all stakeholders a sense of ownership and commitment to the plan.

The public has the right to be informed on all planning decisions that will affect it, and community participation should be included throughout the process, not only at the strategic phase.

The White Paper seems to suggest that community input stymies development.

Yet the Vancouver model encourages early and continuing dialogue that influences outcomes and strengthens consensus, trust and ownership. The culture of community engagement established in Vancouver has been characterised as "QUIMBY"—Quality in My Back Yard—rather than NIMBY.

A BALANCED APPROACH

The City takes a holistic - and I would argue, more responsible - approach to development, one that balances various interests to create a liveable, workable, sustainable city for the long-term.

Other cities around the world that are regarded as comparable to Sydney - such as Vancouver and Seattle, and New York and London—have set the environmental agenda front and centre.

The White Paper has no reference to adaptation for climate change. This is now a key area of responsibility for planning regimes around the world; a matter of risk management for key urban assets that is being pursued by our competitor cities.

Ecologically Sustainable Development, energy efficiency, heritage preservation, design quality and social infrastructure are all crucial issues that are not explicitly addressed in the list of NSW Planning Policies.

The independent Moore/Dyer Review which preceded the White Paper noted that planning systems create the settings to balance economic interests and public interests. It concluded that the broad purpose those settings must serve was that of "sustainability".

Long-term sustainable economic growth is dependent on good amenity, quality design, fiscal incentives, and environmentally sustainable choices.

Yet the new Strategic Planning Framework sets a relatively narrow, economic focus that ignores the multi-faceted role of planning and is in fact far removed from the international best-practice that the new systems claims to achieve.

Today, a world-class city-building planning system includes a broad range of outcomes including the meeting of housing needs, low-carbon development, and quality design. It must balance financial feasibility with long-term economic, environmental and social benefits.

Sustainability and economic growth are not antithetical. They are, in fact, partners for the long term.

CONCLUSION

We are committed to building the City's economy and leaving a strong legacy of environmental sustainability, economic resilience, design excellence, and good governance. Our record so far shows significant progress towards those goals.

Any new planning system must ensure social equity and protect the public interest, even as it fosters new development. The measure of its success will be the quality and long-term sustainability of the places and the economy that it promotes.

If, despite its good intentions, the new system produces poor quality development and infrastructure, makes promises it can't deliver, degrades the atmosphere and ecosystems, and entrenches social inequality - then undoubtedly it will have failed for all of us.