Monash to hit developers with a major hike in public open space contributions

Monash Council are seeking to introduce a new public open space contribution rate of 10 percent which will be implemented across the whole of the municipality for subdivisions. If implemented the amendment will see people paying up to 400% more to Monash council in contribution rates subdividing lots into three or more. Currently if you own a site in Monash worth $2,000,000 and successfully subdivide it into three lots you are required to pay 2% of the value of the land ($40,000) directly to council for future public open space. Under the amendment proposal you will be required to pay $200,000 to council as the contribution for private open space. That is a 400% increase. 

The Amendment:

•Amends the Schedule to Clause 53.01 to require that all subdivision provides a public open space contribution at a rate of 10%.

•Introduces a new Local Planning Policy – Clause 22.15: Public Open Space Contributions Policy that sets out the guidance for the process on when, where and how a public open space contribution will be required, including whether in the form of cash in lieu, land or a combination of both.

•Replaces Clause 21.10 in the Municipal Strategic Statement with a new Clause 21.10.

Monash has followed in the footsteps of Frankston City Council who earlier this year proposed to increase their public open space contribution rates. However Monash have taken a much more heavy handed approach increasing their rates to one of the highest of any council.

Frankston set its rates between 2% and 8% with the highest rate of 8% only payable for subdivisions within the Frankston Metropolitan Activity Centre which has a higher population density and higher land value than in other areas of Frankston. Currently contribution rates in Monash are between 2% and 5% depending on the number of lots created but the new amendment does not take into account the number of lots or the location of the subdivision instead it is a blanket 10% rate for all subdivision in Monash. Under the new amendment those doing a 3 lot subdivision will pay the same 10% contribution rate as a person doing a 20 lot subdivision.

Below is the current public open space contributions rates in Monash

Number of lots                                 Amount of contribution for public open space

3 lots                                                     2%

4 lots                                                     3%

5 lots                                                     4%

6 or more lots                                        5%

What are public open space contributions?

When land is subdivided into 3 or more lots it is a requirement that a developer pay a contribution of the site value to the council. This is then used to create open spaces such as public parks, playgrounds and reserves. The contribution is either a percentage of the site value, a land contribution or a combination of the two.

Why the increase in contribution rates?

The new rates will see a major increase in revenue for the council which will provide funding for public open space project.  Monash reports that by 2028 there will be an increase of 14,057 people to the Monash population increasing demand for public open space areas within the municipality. 

Monash have deemed the increase as ‘necessary to deliver a reasonable standard of open space provision across the whole of Monash for a growing population’.

They said: “This contribution rate reflects the need to ensure that all residents in the future have contributed to providing an appropriate level of public open space services and recognises a need of 30 square metres per person.”

What does this mean for developers?

This amendment will have a serious effect on property developers hitting small developers particularly hard. Currently a 3 lot subdivision only attracts a rate of 2% which will be increased to five times that amount under the new amendment. Larger developers may be able to absorb the extra cost and still make a profit whereas this will not be the case for everyone. In the short term it will see developers fast forward their projects to avoid paying the new rates. But in the longer term it may see smaller scale developments being stifled. Two lot subdivisions will remain exempt from making any public open space contributions.

Are you affected by the new contribution rates?

Amendment C148 commenced public exhibition on Monday 17 June and will end on Monday 15 April 2019. People will have until then to make submissions to the council for consideration. Any person who may be affected can make a submission to the planning authority about the amendment.  Please contact us if you will be affected by the amendment and we can prepare a professional submission on your behalf to Monash council via post or email. Your name and contact details are required for council to consider your submission, and to notify you of the opportunity to attend Council meetings and any public hearings held to consider submissions.

An independent planning panel will consider the Amendment and each submission that Monash Council receives. The week of 23 September 2019 and the week of 21 October ate the dates currently proposed for the panel hearings.

More information about the amendment, including the amendment documents are available on the City of Monash website.

Sophie Thomas works in our Business Support group and has a very strong career background in marketing for business' and customer service. She has very well developed negotiation skills which assist our client's in getting favourable outcomes from other stakeholders. Sophie has previous experience working in local government in her native home in the UK and has a very well developed understanding of the inner workings of local councils.