Greening Melbourne: Amendment C376 Melbourne Planning Scheme (Sustainable Building Design Amendment)

The City of Melbourne has set a goal to hit net zero emissions by 2040.

Currently, buildings in the Melbourne CBD account for approximately 66% of the City’s total carbon emissions. By comparison, throughout the rest of Victoria, buildings account for approximately 25% of total carbon emissions.

What does Amendment C376 propose to do?

Amendment C376 seeks to introduce sustainability and green infrastructure policy into the Melbourne Planning Scheme (Planning Scheme), through the implementation of a range of new mandatory and discretionary sustainable building design standards and requirements, which will apply to new buildings in the CBD.

What are the key changes?

We have summarised the key proposed changes that will affect property developers:

What types of planning applications will be affected?

Amendment C376 will only apply to planning applications for new buildings within the Melbourne CBD (included in either the Capital City Zone or Docklands Zone). This means that current building owners and occupiers will not be required to make retrospective changes to existing buildings to bring them into compliance with the proposed new standards and requirements.

All developments that require a planning permit will be subject to the new planning policy considerations about environmentally sustainable design (ESD).

In addition, substantial alterations and additions to existing buildings (i.e. those that result in more than 1,000 m² additional gross floor area) will be subject to specific mandatory and discretionary building design standards and requirements set out in the table above.

Relevant practical considerations for property developers

Based on the present drafting, there appears to be a lack of detail on how the aspirations of Amendment C376 can be practically delivered.

For example:

• The language in the Amendment is quite confusing. It would be of practical assistance if a more plain-language, user friendly practice note (including practical examples to achieve compliance) could also be released.
• A number of the definitions adopted in Amendment C376 (e.g. ‘green infrastructure’, ‘Hardscaping’ and ‘Ecosystem services’ – which is intended to capture stormwater and rainwater harvesting interventions) are not defined terms in the Victorian Planning Provisions. These concepts should be clearly defined so that there is certainty about what must be delivered.
• We also see practical issues in delivering the mandatory car share parking spaces – as these spaces will need to be designated as common property in the ownership of the Owners Corporation. If the car spaces form part of the common property, they will not be separately titled (or form part of the primary lot) and are therefore not considered to be property ‘owned’ by the registered proprietor (or purchaser) of an apartment or office lot. This means that:
• developers and vendors will not be able to separately price and sell the car parking spaces; and
• financiers will not take into account the car parking space that may be assigned or available for use by a lot owner for the purposes of valuation and lender security .

Accordingly, developers should be mindful of the potential impacts on pricing and purchaser financing.

• The combined requirement of bicycle and motorcycle spaces, along with associated shower and changing facilities, as well as car share parking spaces and EV charging point infrastructure increases the demand on space. This increased demand can be efficiently accommodated via the use of car stackers.
• The Planning Scheme alone cannot ensure operational outcomes. In order to ensure delivery of the mandatory standards and requirements, these provisions will need to be ‘back-to-backed’ in the relevant construction and building standards.

What happens next?

The Amendment is currently on exhibition, with public consultation open until 17 April 2023. Gadens through its Committee roles on both the Property Council of Australia and the Urban Development Institute of Australia have contributed to industry submissions on Amendment C376.

Gadens will provide further details and information regarding Amendment C376 – including any amendments proposed – this information becomes available.

If you have any specific concerns about the impact of Amendment C376 on your Melbourne CBD property, please contact: Andrea Towson, Brihony Boan, Andrew Kennedy.

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Authored By:

Andrea Towson, Partner
Carlyna Yap, Lawyer