Major Zoning Overhaul for the State: A Review of Proposed Changes to Commercial and Rural Zones

Planning Minister Matthew Guy has announced the State Government’s intention to make the most significant changes to Victoria’s planning zones since the introduction of the standardised Victorian Planning Provisions (VPPs) over a decade ago.

In the last edition of BDAV News we looked at the proposed changes to the Residential Zones. This month we look at the proposed changes to the Commercial and Rural zones.

Rural Zones Changes

The proposed changes retain all of the existing rural zones, but dramatically change the status of many activities and uses within each zone. Generally, the changes seek to support agricultural uses and allow more activities relating to the farming sector to become established without first seeking planning permission. In addition, other changes seek to provide for retail and tourism uses and remove the need for these uses to be ancillary to agricultural uses.

The other dramatic change is the relocation of many prohibited (Section 3) uses to ‘permit required’ (Section 2) in the Table of Uses contained within each zone. In some zones, this means that medical centres, primary and secondary schools, plant nurseries and places of assembly can now be established with a planning permit, when previously, they were prohibited activities and a permit could not issue. In addition, any use not specified in the table now becomes a Section 2 use, whereas the current provisions state that any unspecified use is Prohibited. The change from a default position of a ‘if it’s not on the list, it’s prohibited’, to ‘if it’s not on the list, lodge a planning permit and Council will determine it based on merit’ is a dramatic shift in the way that rural land is regarded and acknowledges that complimentary retail and tourism uses have a place within the rural hinterland, as long as they are appropriately managed.

Following is a summary of the specific changes for each zone.

Farming Zone (FZ)

The changes in the Farming Zone are based around the need to support rural communities and allow agricultural business to expand and diversify without undue interference by the planning process.

The changes to the Farming Zone have been detailed below:

Changes to the purpose of the zone	Amended to remove ‘protection and enhancement of natural resources and biodiversity’.
Changes to use requirements	10 guest B&Bs permitted as of right Primary produce sales and Rural Store a Section 1 Use Rural Industry a Section 1 Use with several conditions Many Section 2 uses deleted from the table, will be treated as unspecified Section 2 Uses Residential Hotels and Restaurants do not need to be used in conjunction with an agricultural or winery use. Primary and secondary schools, accommodation, motor racing track, warehouses, are now Section 2 Uses.
Changes to Subdivision requirements	Removal of requirement for a S173 agreement to be applied to new allotments to prevent further subdivision.
Changes to buildings and works requirements	100 sqm outbuilding and 100 sqm dwelling extension permitted as-of-right.
Changes to 3^rd party notification and appeal rights	None
Changes to Schedule	None

Rural Activity Zone (RAZ)

The changes in the Rural Activity Zone once again reflect the move towards removing current restrictions which are frustrating agricultural development within rural areas. Warehouses, retail uses and accommodation restrictions are removed under the proposed changes.

Other changes to the Rural Activity Zone are listed below:

Changes to the purpose of the zone	None
Changes to use requirements	10 guest B&Bs permitted as of right Primary produce sales, rural industry, and rural store have now become Section 1 uses. Retail premises and accommodation can now be established with planning permits, where previously they were Prohibited.
Changes to Subdivision requirements	Removal of requirement for a S173 agreement to be applied to new allotments to prevent further subdivision.
Changes to buildings and works requirements	100 sqm outbuilding and 100 sqm dwelling extension permitted as-of-right.
Changes to 3^rd party notification and appeal rights	None
Changes to Schedule	None

Rural Conservation Zone

Once again, the changes remove many of the restrictions surrounding alterations and extensions to dwellings and farm buildings. Schools and some types of accommodation are now contemplated within the zone.

Changes to the purpose of the zone	None
Changes to use requirements	10 guest B&Bs permitted as of right Many Section 2 uses deleted from the table, will be treated as unspecified Section 2 Uses Residential Hotels and Restaurants no need to be used in conjunction with an agricultural or winery use. Accommodation, animal boarding, leisure and recreation, community markets, plant nursery and any other use not mentioned in Sections 1 or 3 are now Section 2 uses.
Changes to Subdivision requirements	Removal of requirement for a S173 agreement to be applied to new allotments to prevent further subdivision.
Changes to buildings and works requirements	100 sqm outbuilding and 100 sqm dwelling extension permitted as-of-right.
Changes to 3^rd party notification and appeal rights	None
Changes to Schedule	The RA’s ability to stipulate the maximum number of restaurant and hotel patrons/guests within the zone has been removed from the Schedule

Green Wedge Zone (GWZ) and Green Wedge A Zone (GWAZ)

The proposed changes to both the GWZ and GWAZ are similar, as illustrated in the table below.

The Green Wedge Zone has seen arguably the most dramatic changes of the rural zones, with significant changes to the uses which can be considered by Council as Section 2 uses. Previously many uses were listed as Section 3 (Prohibited) and any non-specified uses were Prohibited by default. We foresee some dramatic changes within GWZ areas if these changes are adopted.

Similarly the Green Wedge A Zone has been modified to make more agricultural uses and some farming uses exempt from planning permit. Schools, markets and medical centres can now be established with a planning permit, where previously such uses were prohibited.

Changes to the purpose of the zone	None
Changes to use requirements	10 guest B&Bs permitted as of right Agriculture, primary produce sales, and Rural Store a Section 1 Use Rural Industry a Section 1 Use with several conditions Many Section 2 uses deleted from the table, will be treated as unspecified Section 2 Uses. The number of Section 2 Uses significantly increased. Function Centres, Group Accommodation, Residential Hotels and Restaurants no need to be used in conjunction with an agricultural or winery use. Place of Worship and Plant Nursery now Section 2 Uses Primary and Secondary Schools can now be established with a Planning Permit.
Changes to Subdivision requirements	Removal of requirement for a S173 agreement to be applied to new allotments to prevent further subdivision.
Changes to buildings and works requirements	None
Changes to 3^rd party notification and appeal rights	None
Changes to Schedule	The RA’s ability to stipulate a maximum number of patrons at a function centre, group accommodation, hotel or restaurant has been removed from the schedule

Rural Living Zone (RLZ)

As with many of the zones previously mentioned, the requirement for a S 173 agreement precluding further subdivision has been removed. The most dramatic change to feature in the draft Rural Living Zone is the reduction of the minimum lot size for subdivision from eight ha to two ha.

Changes to the purpose of the zone	None
Changes to use requirements	10 guest B&Bs permitted as of right
Changes to Subdivision requirements	Removal of requirement for a S173 agreement to be applied to new allotments to prevent further subdivision. Minimum allotment size reduced from 8 ha to 2 ha
Changes to buildings and works requirements	None
Changes to 3^rd party notification and appeal rights	None
Changes to Schedule	None

Commercial Zones

The proposed changes reduce the number of “commercial” zones from five to two, by:

Amalgamating Business 1, 2 and 5 zones into a new Commercial 1 Zone; and
Amalgamating Business 3 and 4 zones into a new Commercial 2 Zone.

Commercial 1 Zone

The changes reflected through the proposed Commercial 1 Zone can be summarised as follows:

Changes to the purpose of the zone	Amended to move from a focus on business centres to commercial centres, with a broader range of uses contemplated including high density residential.
Changes to use requirements	Accommodation becomes a Section 1 (as-of-right) use (except for a corrective institution); All retail uses become Section 1 Uses (except for adult sex bookshop); A place of worship becomes a Section 1 use up to 250m² gross floor area; Education and Office uses to have conditions removed; Education to become a Section 1 Use; Childcare Centre becomes a Section 1 Use subject to conditions; The conditions for Office have been removed, now an unconditional Section 1 use; Industry becomes a Section 2 use; A number of uses previously prohibited in the Business 5 zone become a Section 2 use, including Warehouse and Industry; Tavern becomes a Section 1 use (as a type of Retail Premises); A timber yard currently prohibited in the Business 2 zone will become a Section 2 use.
Changes to Subdivision requirements	None notable
Changes to buildings and works requirements	None
Changes to 3^rd party notification & appeal rights	None
Changes to Schedule	No schedule proposed
Other notable changes	Advertising sign categories have been amended so that all sign requirements will be Category 1 (least restrictive). Previously Business 2 and 5 zones had Category 2 and 3 signage provisions respectively.

The changes appear to allow a broader range of uses within fewer zones. This will provide greater confidence to investors and developers and less constraint in the scope of projects. The changes will result in a greater range of uses within Commercial 1 Zone, potentially placing industry close to accommodation or dwellings. Where industry is existing and dwellings can establish as of right (subject to conditions) this has the potential to cause amenity impact issues. The changes to the signage provisions will enable a greater number and amount of signage in areas previously zoned Business 2 and 3. More broadly, the changes have the potential to increase property prices within areas currently zoned Business 2 and 5 where office use is restricted or capped at a maximum floor area, and various types of retail use are limited or controlled. This in turn may change the type of uses able to tenant properties in traditional shopping centres.

Commercial 2 Zones

The changes in the new Commercial 2 Zone can be summarised as follows:

Changes to the purpose of the zone	Amended to acknowledge potential impacts on adjacent sensitive uses and remove reference to bulky goods retailing.
Changes to use requirements	Restricted retail, cinema and cinema-based entertainment facility, food and drink premises and trade supplies become a Section 1 (as-of-right) uses, some subject to conditions; Office use floor space restriction removed; Education becomes a Section 1 Use; Accommodation (except for “dwelling”) becomes a Section 2 Use, previously prohibited; Removes the 30 metre threshold distance for uses not listed in Clause 52.10 (uses with potential amenity impacts); Exempts small scale supermarkets (up to 2000m²) and associated shops (up to 500m²) from a permit requirement; Service Station, previously as-of-right, becomes a Section 2 use; The Trade Supplies floor area caps removed; Warehouse threshold distances removed.
Changes to buildings and works requirements	None
Changes to subdivision requirements	None
Changes to 3^rd party notification & appeal rights	None
Changes to Schedule	No schedule proposed
Other notable changes	Advertising sign categories have been amended so that all sign requirements will be Category 1 (least restrictive). Previously the Business 3 zone had Category 2 signage provisions.

These changes will also remove constraints to establishing certain uses within commercial areas, particularly shops and other retail. Use of land for small scale supermarkets (up to 2000m2) and associated shops (up to 500m2) will be exempt from permit requirements for ‘use’ and become as-of-right.

The changes also allow office development of any size, keeping in mind that the planning permit requirements of buildings and works, car parking, loading and unloading and other relevant provisions will still apply.

Industrial Zones

While no new zones are proposed, the 500 square metre cap on office floor space will be removed and the Industrial 3 Zone will now provide for small supermarkets and supporting shops. Councils will be able to schedule in a floor space requirement where justified.

Changes to the Industrial 1 and 2 zones are limited and remove the 500m2 floor cap for Office use and Restricted Retail Premises. The Industrial 2 zone gains a schedule enabling Council to specify a maximum leasable floor area for Office.

The changes to the existing Industrial 3 Zone can be summarised as follows:

Changes to the purpose of the zone	None
Changes to use requirements	A shop/s up to total 500m² area, adjoining or on the same land as a supermarket, is now a Section 1 use; A supermarket up to 2000m² is a Section 1 use; However, if the floor area limits for Shop and Supermarket are not met, they become prohibited (Section 3) uses; The 500m² Office floor space cap has been removed;
Changes to buildings and works requirements	None
Changes to subdivision requirements	None
Changes to 3^rd party notification & appeal rights	None
Changes to Schedule	Maximum Office floor area removed; Minimum restricted retail floor area removed.
Other notable changes	None

The main changes to the Industrial zones is the removal of restrictions to Office and Restricted Retail Premises floor space which will provide opportunities for large office developments to establish in Industrial zones, often on town fringes. In certain areas this may impact on office vacancy rates in the existing and traditional office areas, mainly Business zones in town centres. The provision for small supermarkets and limited areas of associated shops provides greater competition in the market place and allows for the smaller format and independent supermarkets to establish. This may provide greater accessibility for shoppers, particularly to those working in and around industrial zones.

One Planner’s Summary

Overall the proposed changes to the Rural Zone will substantially increase the number of uses permitted within Victoria’s rural areas.

Similarly, the proposed changes to the Commercial and Industrial Zones will increase the number and size of uses generally permitted within commercial and industrial areas.

The impact of ‘opening up’ the use restrictions in these areas is very difficult to accurately foresee. But time will definitely tell…

For more information please visit http://www.dpcd.vic.gov.au/planning or contact Clause:1 on 03 9370 9599.