The New Enterprise Zone

19/05/2013 11:25 pm

 

NSW'S New Planning system proposes the introduction of a new Enterprise Zone. The purpose of this zone is to attract investment and stimulate economic growth in areas where it is needed. The enterprise zone will be used to encourage investment by providing for the broadest range of uses.

The enterprise zone was first introduced, by the Department of Planning and Infrastructure (The Department),in the Green Paper, which stated that the zone would be characterised by very little, if any, development controls. The zone will generally aim to attract employment generating development but could provide opportunities for mixed use housing.

The White Paper has further clarified the zone by stating that the zone is to be supported by development guides that are characterised by limited controls, providing they do not result in any significant adverse impacts.

In addition to reduced regulation, additional incentives could be utilised to attract investment to an enterprise zone. Some financial incentives suggested by the Department include:

  • Local rate or land tax relief for a prescribed time frame
  • Exemption from development levies, and/or
  • State or Local Government investment in infrastructure provision or the like to support the area.

The City of New York has been a forceful innovator in its use of real estate tax incentives to both encourage new construction and ensure the renovation of existing buildings. The use of these incentives in the US, in particular New York, has become so widespread that developers routinely approach city governments to ask for them (Fuerst, 2005).

Application of the enterprise zone will need to be consistent with the vision for the area and demonstrate that strategic outcomes are being met. It is envisaged by the Department that enterprise zones could be identified through Regional Growth Plans, Subregional Delivery Plans or through Local Land Use Plans and would be given effect by a zoning change.

Enterprise zones could vary in size form precincts to whole local government areas that are eager to attract investment in employment. Could you imagine an entire city covered by an Enterprise Zone!

Another benefit of the enterprise zone to development is the eligibility of proposals for code assessment. A code assessment will have a maximum processing time of 30 days, unless it requires a public notification in which case an additional 20 days will be added. The White Paper provides that where an enterprise zoning has been developed with community participation. Council is expected to make a broad range of development activities permissible in the zone as code assessment.

The enterprise zone is a great innovation for cities around the state seeking to attract investment in a modern economic climate. The effectiveness of the zone for developers will be dependent on how active the Department is in encouraging Councils to apply the zone to relevant sites and precincts. It will also be dependent on how accessible the process for rezoning a site enterprise zone will be made available to land owners.  Once again this will be a dance of weighing up community concerns and economic demands. Concerns have been raised during the consultation period from the Green Paper to the White Paper about the enterprise zones. The Department has responded to concerns by stating that the locations for the use of the Enterprise Zone will be determined in consultation with the community as part of strategic planning.

At a time when cities globally are competing fiercely with each other to attract or retain jobs within a global economy, the enterprise zone is great innovation to provide the flexibility for the State Government and local governments to stimulate job growth and retain existing jobs.