On 25 February 2025, the State Government announced a new ‘townhouse and low rise’ code for townhouses/low rise apartments, with Amendment VC267 gazetted on 6 March 2025 and to be in force by 31 March 2025.
The amendment primarily changes the residential suite of zones and overhauls existing Clause 55 as it relates to townhouses and apartments (up to 3 storeys), known as the townhouse and low rise code. The amendment also introduces a new Clause 57 for 4 storey residential buildings although this article focusses on the Clause 55 changes.
The amendment removes, amends and expands existing standards of Clause 55 in summary as follows (but not limited to):
We suspect that the Garden Area requirement within most GRZ sites (which is 35% for lots exceeding 650sqm) will limit the opportunity to reach the higher 65% site coverage.
The big change relates to the removal of the ‘qualitative’ consideration of neighbourhood character from Clause 55 itself, which going forward will instead dealt with via measurable deemed to comply standards pertaining to street setback, building height, side and rear setbacks, walls on boundaries, site coverage, access, tree canopy coverage and front fences. As revised Clause 55 appears to exempt any ‘fully compliant’ application for multi-dwellings from the consideration of neighbourhood character in the zone and planning scheme more broadly.
Ratio Consultants have undertaken some preliminary built form testing of the reformed standards to better understand the potential outcomes and implications of the new Clause 55 provisions. As pictured below, the diagrams show a ‘theoretical’ envelope that would be permissive in both the NRZ and GRZ. These diagrams are intended to illustrate the general size, scale and massing of a development that would be (technically) compliant with the key built form metrics of the new ‘deemed to comply’ framework – and therefore, in turn, would benefit from the ‘certainty’ and more ‘streamlined’ process offered by this planning reform.
NRZ
NRZ Rescode Diagram by Ratio Consultants
GRZ
GRZ Rescode Diagram by Ratio
There is a significant opportunity for more intensive housing growth arising from Amendment VC267. Evidently, the built-form analysis shows the size, scale and massing of these built-form outcomes are larger and more intensive than would be typically achievable for multi-dwelling developments in many low-rise locations throughout Melbourne and regional towns. Hence, it can expected that housing developments of greater scale and diversity will be permitted in more locations in future, and shall be deemed compliant, irrespective of the site constraints, neighbourhood character, policy settings and / or local political influence.
We understand that a further impending amendment is the ‘deletion’ of the many zone schedules across Melbourne that ‘vary’ Clause 55 character relates standards in a more restrictive way (ie increased private open space provision and more stringent side and rear setbacks).
The intention is to create a consistent across-the-board approach to the zone schedules. The schedules will retain the ability to vary standards relating to ‘street setbacks’, ‘site coverage’, ‘private open space’ and ‘front fence height’, but only where it allows more development potential (for instance, higher site coverage or street setbacks less than 6 metres).
The new controls aim to ‘cut’ waiting times for planning approvals by up to 60 percent. This reduction will be achieved by the introduction of ‘deemed to comply’ standards. If a proposal meets all standards in the code, the intention is for Councils to approve these projects.
In a situation where the zone is the only permit trigger (i.e. no other overlay triggers), and the proposal meets all the new Clause 55 standards, an application would be exempt from third party appeal rights (i.e. objector appeals) at VCAT via Section 82 of the Planning and Environment Act. However, such an application will still notify neighbours, who can make a submission / objection to Council during the process for consideration as per the current situation.
In this scenario the intention is that the Council must grant a permit if all standards are met. There would be no Notice of Decision to Grant a Permit as objectors would not have appeal rights.
Clause 55 has been amended, it appears, to exempt such an application from the broader considerations of the Zone, Planning Policy Framework and Municipal Planning Strategy, thus confining considerations to the standards of Clause 55. Accordingly, if the standards are met a permit is to issue.
By exempting consideration of the purposes and decision guidelines of the zoning, this may, to a degree, ‘dilute’ the current structure and hierarchy of residential zones (i.e. NRZ vs GRZ vs RGZ etc.) whereby the intensity of development and housing typology/format that is permissible in different zones will be less discernible. In effect, this would potentially unlock greater housing densities and improved housing choice in more locations.
If a proposal does not meet one or more standards, the intention is that the relevant considerations would be limited to the objective and decision guidelines of those standards and the broader policies of the PPF and MPS where relevant to these standards only. It would not open the door to consider other planning scheme considerations more broadly or components of a development where the applicable standard is met. In this scenario, an application would proceed under the usual application process and be advertised with objectors retaining rights of appeal under Section 82 of the Act.
It is also understood that if an overlay control applies, an application would still need to be assessed under the overlay.
Despite this intention, the proposed exemption wording of Clause 55 could be interpreted to suggest that any application under Clause 55 (irrespective of whether the standards are met or not or an overlay applies) is exempt from requiring assessment against the zone, the MPS, PPF and Clause 65.
This may limit the important guidance of the PPF and MPS to the consideration of whether an appropriate outcome has been achieved where a standard has not been met or where an overlay applies (i.e. Heritage Overlay or Design and Development Overlay).
Transitional provisions apply such that any application, existing or new, lodged prior to the 31 March 2025 will be assessed under the former Clause 55 standards, with any new application to be assessed against the new provisions.
The advice of DTP is that an existing application could be amended via Section 50 or 57A of the Planning and Environment Act and take the benefit of the new controls.
The controls outline that an amendment of an existing permit via Section 72 of the Planning and Environment Act must be assessed against the old provisions.
Overall, the amendment places a strong emphasis on increasing housing provision in accordance with Government directives and with a focus on sustainability, internal amenity, and landscaping.
The codification of neighbourhood character will simplify and minimize the consideration of the built form itself, including the scale, massing and appearance of development. A risk of this approach is that there appears to be little or no scope to assess important matters such as neighbourhood character, site context and design quality. Notwithstanding the focus of Government to drive housing growth, the quality and presentation of built form to the public realm and neighbouring interfaces including response to ‘opportunities and constraints’ of a sites context are fundamental aspects of the Planning Policy Framework, and ought not be diminished or excluded without due regard.
How this plays out on the ground will be interesting to observe should the market pick up and construction of medium density projects inevitably starts ramping up. Will the market choose to do the right thing by the public realm, or will cutting the quality of builds/materials become the norm?
Clearly, reforms that assist in facilitating the provision of new housing at this time are welcomed but as everyone acknowledges, reforming the planning system is a small part of the equation in addressing the housing crisis. In the past the former Clause 55 provisions did not prevent development occurring and the query will be whether the changes will assist to encourage and catalyse new housing construction. This remains to be seen, although we suspect other factors are at play such as interest rates, construction costs and taxes that are more pressing impediments.
There may be some approval timing benefits for development (if indeed all standards are able to be achieved) and some additional certainty to developers wanting to avoid Section 82 objector appeals to VCAT.
Achieving all standards of Clause 55 may not be a realistic proposition depending on site circumstances and the want to achieve viable projects in a climate of high construction costs/taxes. The benefits of increased site coverage and reduced front setbacks will not be realized until the mandatory garden area provisions are removed from the zones or some thought is given to the relaxation of the garden area definition perhaps to exclude driveways and allow for reverse living product.
Ratio is well placed to advise on how to understand and apply (and best take advantage of) these new controls. We can provide detailed low rise code assessments to accompany applications to Council.
Please reach out to us at mail@ratio.com.au to discuss how we can assist with providing advice on the new controls as they relate to any existing or proposed upcoming residential projects.
