Official trailer for Line of Sight - a spectacular and scary view of underground bicycle messenger racing

Victoria’s Planning Minister, Matthew Guy, has taken a pasting over his decision earlier this month to expand Melbourne’s Urban Growth Boundary (UGB) by 5,858 hectares, as recommended by the Logical Inclusions Advisory Committee he set up.

The media point out this is the fourth time the UGB’s been expanded since it was promulgated in 2002. Moreover the property industry is currently struggling to sell lots in a depressed market.

Some are also concerned about “the power and influence wielded by big developers.” Two developers who benefited from Mr Guys decision are allegedly major donors to the Liberal Party.

Mr Guy responded to criticism by emphasising the expansion is not about current market circumstances but rather the long term.

The Government isn’t expanding Melbourne’s growth boundary and bringing forward new supply so that we can get that to market tomorrow; we are readying Melbourne for the next five, ten and fifteen years. And this is what good planning policy is about. It is about planning your city in advance – not for the next two or three years but for the next twenty years.

That’s not a convincing justification because the change doesn’t have a big effect on supply. While 5,858 hectares is substantial, it’s relatively small compared to the existing area of land available for development within the UGB.

Supply was boosted significantly in 2010 when former Labor Minister Justin Madden added 43,000 hectares (that’s 430 sq km). He claimed it was such a large increase that no further review of the UGB would be needed in his lifetime (BTW he was 49 years at the time).

Of course there’s no reason why we should give any more weight to Mr Madden’s word than those of any other politician. But it was a very large area, equivalent to almost a fifth of Melbourne’s current built up area. And it was a mere two years ago.

But equally, the insinuation that Mr Guy somehow set up the logical inclusions process so he could intervene on behalf of favoured developers is not a convincing argument either. He was very well-insulated from the process.

To be included within the UGB, any land had to be proposed by both the relevant Council and the Growth Areas Authority. Moreover it had to be located within a designated Growth Area and be adjacent to the existing boundary (essentially contiguous).

Proposals were reviewed by the Logical Inclusions Advisory Committee on the basis of defined decision criteria. Six of the seven members of the Committee, including the Chair and Deputy Chair, are members of Planning Panels Victoria. The process was transparent – the Committee’s reports are available here.

Another possible reason for the change is that the existing boundary might be flawed. Perhaps some arguable technical decisions were taken by the planners who worked on the existing alignment.

Deciding where to draw a line on a map and consequently what land to exclude from the prize isn’t by nature a process that’s anywhere near black and white. It’s not like science or maths – different interpretations are possible.

It also seems eminently plausible to me that some highly politicised judgements might’ve been made by the former Government with regard to matters like who’s land was in and who’s was out. Let me emphasise that I don’t know if any were but this is, after all, an essentially political process.

It must be said though that the process set up by Mr Guy is superior to what was done on previous occasions. It is more rigorous, more inclusive and more transparent. The various publicly available reports prepared by the Committee explain in considerable detail why 14 areas were recommended for inclusion within the UGB and why 37 were either rejected outright or set aside for possible further review.

Ultimately though, there’s no arguing with the fact that Mr Guy has simply delivered on an explicit election promise. The Victorian Liberal Nationals Coalition Plan for Planning promised a Coalition Government would:

Work with relevant municipalities for the immediate assessment of logical inclusions in Melbourne’s UGB to facilitate billions of dollars worth of much needed development‐ready housing projects.

But this is also where it gets interesting. Once that promise was made, any landowner with a property contiguous with the UGB and suitable for development had good reason to be optimistic when the Liberal Nationals won Government. It shouldn’t surprise anyone that some of the land that met this criteria is owned by developers.

What Mr Guy provided landowners with was the opportunity to make their case and get a green light if their property were suitable i.e. met the technical criteria laid down by the Committee. The owners of such properties didn’t need to seek to influence the Minister while the Committee was deliberating.

I think the key issue with this and future reviews though is that they’re conducted without any real understanding of the need for, or effect of, bringing additional land within the UGB. As the Government has also promised to review the boundary every two years, we might have to get used to the idea that small areas of land will continue to be added.

Such land will undoubtedly be suitable for development but there won’t be any evaluation of whether it’s actually needed. That’s symptomatic of a bigger problem. The Government simply doesn’t know how much developable land needs to be within the UGB because it barely understands when and why landowners bring their land into development.

The Government needs to put much more effort into understanding and modelling this process. Arguing that x years of supply is needed is crude and unreliable. Land supply is incredibly important and warrants much more effort.

The Government also needs to think more deeply and carefully about possible policy levers that could be used to make the land supply process more responsive and effective.