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2.1 Integrated Land Use and Infrastructure Planning

Integrated land use and infrastructure planning is a powerful tool which can influence the shape, structure, and economic, social, and environmental performance of a city. Population growth creates demand for more homes, and new residents require access to utilities, roads and public transport, employment opportunities, shopping, entertainment, and health, education and community services. New infrastructure and growing communities also attract businesses and employers, creating demand for further residential, commercial and industrial construction. Better aligning land use and infrastructure planning can improve Victoria’s urban development, creating a sense of place that improves social outcomes, sustainability and adds economic value.

Integrated approaches promote higher productivity, greater social interaction and a more sustainable urban footprint. Planning land use and infrastructure together encourages development in places that can accommodate growth and where the required services and infrastructure can be delivered.

Integration means planning together

Integrated land use and infrastructure planning can better manage change in communities and unlock greater benefits. It can deliver a shared aspiration for a city or region and help coordinate investments and policy reforms to achieve that vision.1 A more integrated approach promotes higher productivity, greater social interaction and capital, and a more sustainable urban footprint. It supports better local outcomes for communities by providing the right infrastructure at the right time, including essential social infrastructure and transport connections to the things people need.2 It can also support protection of sensitive areas such as water catchments.

Integration means collaborating to achieve common objectives for urban efficiency, sustainability and equity.3 It requires different governments and agencies to understand the multiple objectives each are trying to achieve and to transparently observe, understand, contribute to, and support one another’s plans. Each organisation can incorporate this knowledge in revisions to their plans to better align their efforts.

In the past, Victorian governments have been reluctant to publish long-term plans which commit them to infrastructure projects. However, the benefits of publishing these plans outweigh the risks. Being transparent about the planning process builds community, business and local government confidence, allowing them to make decisions and investments that align with and enhance government plans.4 Publication increases opportunities for collaboration between agencies, with other levels of government, and with the private and not-for-profit sectors. Planning land use and infrastructure together means development is encouraged in places that can accommodate growth, and the required infrastructure and services are delivered sequentially when needed.

As Victoria grows and changes, building and modernising infrastructure will become more complex. Land in large cities is scarce and expensive, and development and construction become more complicated over time. Integrated planning identifies underused infrastructure, reveals opportunities for co-location,5 and considers how infrastructure upgrades can be combined to lower costs and limit disruption.6

The Victorian Government’s infrastructure pipeline provides many opportunities for better integration with land use and between infrastructure sectors. The Level Crossing Removal Project has integrated open space into its delivery and provides other supporting transport solutions. For example, the Caulfield to Dandenong rail project adds 17 kilometres of continuous pedestrian and cycling paths along with open and community spaces.7 The Suburban Rail Loop project also seeks to better connect people to jobs and services, and will require inter-agency and inter-governmental coordination to plan for land use changes and different future infrastructure demands.

Insights: Revitalising central Dandenong using integrated land use and infrastructure planning

Revitalising Central Dandenong is a long-term initiative seeking to transform Dandenong into a vibrant and thriving economic hub.8 It uses land use and infrastructure together to produce better outcomes for the area.

Dandenong was part of the Transit City Program which sought to restructure parts of Melbourne by focusing on higher density, mixed use developments around major transport nodes. In 2005, the Victorian Government invested $290 million, and the City of Greater Dandenong invested around $100 million over 10 years in revitalising central Dandenong.9

Alongside changes in land use planning controls and the transfer of some planning powers to the Minister for Planning, Places Victoria (now Development Victoria) and the City of Greater Dandenong made many significant investments to transform the centre, including:10

  • Redeveloping the Dandenong Market
  • Acquiring land next to Dandenong station to redevelop into homes11
  • Widening streets and extending a bridge to improve access to the Dandenong city centre
  • Realigning major east-west arterial roads to remove traffic from nearby streets and encourage pedestrian use
  • Building new government offices, including for the Australian Tax Office and a Victorian Government Services Hub
  • Building new municipal offices with an integrated library, civic plaza, green space, and a giant screen
  • Transforming the city’s main street to a green, pedestrian-friendly boulevard
  • Improving pedestrian and cycling links between Dandenong station and the city centre
  • Constructing a new multi-sports court stadium.

Place-making requires a sustained effort over a long time. Revitalising central Dandenong contributed to many positive changes in the area including:

  • A near doubling of people living in Dandenong
  • A fall in unemployment
  • Increased density, with units and terraces increasing as a proportion of all homes.12

The revitalisation has created more government office space, upgraded infrastructure, facilitated private sector investment, and significantly improved community infrastructure and public spaces.

Victoria can learn from examples elsewhere

Victoria is not alone in grappling with integrated land use and infrastructure planning. Around the world, governments face challenges in planning infrastructure for populations that grow, change, and move over time. Leading examples of better integrated planning use similar processes and practices, even in places with radically different institutions.

Common governance arrangements include strong laws that mandate collaboration, transparent decision-making and published plans, strong community consultation and engagement, and a public-facing coordinating institution that facilitates inter-agency cooperation.

For example, Metro Vancouver is a federation of 21 municipalities, one electoral area and one Treaty First Nation that collaboratively plans for and delivers regional-scale services.13 Metro Vancouver 2040 is the region’s growth strategy, pursuing land use policies for regional development and efficiently providing transport, regional infrastructure and community services. It is legally required to ‘promote human settlement that is socially, economically and environmentally healthy and makes efficient use of public facilities and services, land and other resources’.14 An update of the plan is currently underway alongside a regional transport strategy update.15

Similarly, legislation requires the Mayor of London to develop a spatial development strategy, known as the London Plan, alongside a transport strategy, a housing strategy and an environmental strategy.

Similarly, legislation requires the Mayor of London to develop a spatial development strategy, known as the London Plan, alongside a transport strategy, a housing strategy and an environmental strategy. All strategies are publicly available and required to be consistent. The London Plan details how ‘housing, social, economic, cultural, environmental and transport policies tie together to achieve maximum impact’.16

In Australia, the New South Wales Government set up the Greater Sydney Commission to coordinate and align planning to shape Greater Sydney’s future. The Greater Sydney Region Plan17 identifies three integrated and connected cities to rebalance Greater Sydney and place houses, jobs, infrastructure and services within easier reach of more residents. It was prepared alongside the NSW Future Transport Plan18 and the NSW State Infrastructure Strategy.19

Victoria can learn from these examples, and others, to improve the integration of its land use and infrastructure planning and delivery.

Around the world, governments face common and unique challenges in planning infrastructure for populations that grow, change and move over time. Victoria can learn from the examples of other jurisdictions to improve and inform their planning and delivery.

A new approach can overcome current challenges

Fragmented decision-making, ambiguous responsibilities and undisclosed plans hinder integrated planning. Taking an isolated, sector by sector approach ‘can lead to siloed planning and infrastructure decision-making, inconsistent outcomes, and unintended consequences for places and communities’.20 The absence of effective collaboration arrangements and transparency means that plans often only achieve narrow agency goals, and miss opportunities to deliver broader benefits. It can also duplicate effort, cause extra disruption and generate unexpected changes in communities.

Integrated land use and infrastructure planning has been a Victorian Government goal for some time. For example, it is specifically mentioned in the Transport Integration Act 201021 and Victorian planning strategies such as Plan Melbourne. However, it is still not always evident in practice.

For instance, Plan Melbourne was developed without a corresponding transport plan. The Victorian Auditor General’s Office has identified many other examples where better integration could have delivered better results. These include delivering better transport infrastructure in growth areas,22 better delivery of maternal and child health, kindergarten services and related infrastructure,23 and fewer delays, frustrations and risks.24 Inadequately integrated planning can also mean revenue is not available for services or to fund infrastructure construction and maintenance. Infrastructure in Victoria is funded from different sources, including user charges, infrastructure developer contributions, and Australian, Victorian and local government budgets.

If infrastructure construction, operation and maintenance is not properly costed and revenue sources identified, it can have unexpected impacts on the Victorian Budget, and potentially conflict with the Victorian Government’s fiscal policies and objectives. Good integrated planning means identifying funding and revenue sources so enough funding is available when it is needed.

New technologies and software combined with shared data and mapping can also assist in streamlining planning processes and integrating land use planning and infrastructure. For example, ‘Digital twins’ are a virtual representation of a system and can combine datasets from transport, utilities, property, planning and the environment to help foresee potential infrastructure barriers to development, and forecast impacts of development proposals. The Digital Twin Victoria program is seeking to support better integrated planning and decision-making, facilitate co-design of scenarios to inform decision-making, avoid duplication of effort and data, streamline approval processes and reduce the costs of maintaining assets.25 Infrastructure Victoria has conducted detailed research into better ways to improve infrastructure and land use planning in established areas for growth and renewal. In this research, we focused on population-serving infrastructure provided by the Victorian Government, local governments and the private sector. This includes schools, libraries, community facilities, open space, sports grounds, swimming pools, social housing and utilities. More detail on this research is available in the technical paper Growing together: The case for better integration of land use and infrastructure planning in established areas.

Recommendations to support integrated land use and infrastructure planning

Infrastructure Victoria makes the following recommendations to help integrate land use and infrastructure planning. We also make specific recommendations about integrating land use and infrastructure planning in established suburbs (see section 2.2) and growth areas (see section 3.4).

Recommendation 32: Produce public plans for priority infrastructure sectors

In the next five years, develop and publish long-term statewide infrastructure plans for priority infrastructure sectors for which the Victorian Government maintains substantial responsibilities, including sequencing and timelines for investment.

Current infrastructure planning approaches are inconsistent, lack mechanisms to actively coordinate investments and services, hamper local government planning and investment, and frustrate private and not-for-profit investments.26 Existing infrastructure planning is compartmentalised, and does not support or encourage agencies and departments to find synergies, combine funding and synchronise infrastructure delivery.

Integrated land use and infrastructure planning requires a willingness to discuss options openly and transparently as a priority, long before final commitments or budget decisions are made. Only when agencies make their ideas transparent to others can the process of integrating decisions begin. Agencies cannot work together to align their decisions if they do not know what others are planning. Governments and the private and not-for-profit sectors cannot align their decision-making to invest and support government objectives.

To better integrate land use and infrastructure planning, the Victorian Government should prepare and publish long-term statewide27 plans for priority infrastructure sectors in the next five years. At a minimum, these should include the following sectors, for which the Victorian Government maintains substantial responsibilities:

  • Transport infrastructure, including all transport modes (see recommendation 33) 
  • Health infrastructure, including hospitals and other health facilities 
  • Social housing and social services facilities
  • Education, including schools, TAFE and early childhood facilities
  • Justice and emergency services infrastructure
  • Water and sewerage infrastructure
  • Recycling and resource recovery infrastructure.

These plans should include sequencing and timelines for infrastructure decision-making and investment, and be informed by the Victorian Government’s Victoria in Future population projections, existing infrastructure plans, current land-use policies and early engagement with local government.28 This would require the Victorian Government to develop greater comfort with sharing ideas before final commitments are made. The plans should take account of changes in policy priorities and technologies.29 Clear plans allow other agencies, local government, important stakeholders including Aboriginal communities,30 and the private sector to align their decisions.31 For example, they can help identify the best locations for land use zone changes (see recommendation 35), acquisition of land for infrastructure, and inform development contributions (see recommendation 34). The delivery of infrastructure plans could be overseen by an infrastructure monitoring body (see recommendation 72).

Recommendation 33: Publish Victoria’s transport plan

In the next year, develop and publish Victoria’s integrated transport plan. Require the transport and strategic land use plans to align with each other.

Victoria does not have a publicly available integrated transport plan. The Transport Integration Act 2010 requires the Victorian Government to prepare a transport plan,32 but does not require this to be published. Infrastructure Victoria is unaware of a single, integrated document fulfilling the transport plan requirements of the Transport Integration Act.

Without a transparent transport plan, the proposals for addressing transport challenges and forward planning intentions are not clear. This can make integration with land use planning challenging. Victorian Government agencies, local governments and the private sector are unable to collaborate on transport planning, and cannot capitalise on opportunities to coordinate their investments in the infrastructure required for growing communities. Local governments, who manage most of the streets across the network, cannot plan local infrastructure properly without visibility of connections to the wider transport network,33 while industry is unable to confidently identify emerging long-term freight and logistics challenges.34 The Auditor-General observes that the Victorian Government’s transport reliability performance indicator does not clearly state what is being measured or how.35

A public, integrated transport plan would support the Victorian Government to effectively prepare for growth and change, demonstrate good public sector governance, and build community confidence.36 Transport planning can influence access disparities, carbon emissions and pollution, anticipate future transport technologies,37 and create a common blueprint for transport investment against which to assess potential projects and policy changes. Infrastructure projects are increasing in size and complexity and their outcomes depend on the quality of planning and decision-making.38

In the next year, the Victorian Government should develop and publish a transport plan that meets Transport Integration Act requirements. Concurrently, it should require the transport and strategic land use plans, including Plan Melbourne and the eight regional growth plans, to align. The transport plan should include: 

  • All transport modes, including motor vehicles, motorcycles and scooters, freight, public transport, active transport (walking and cycling), and emerging personal mobility and transport services
  • Aligning network development and operating plans for different modes and networks, including translating these into road and rail network operating plans 
  • Planning, prioritisation, asset management, and route and service infrastructure standards, including for roads and rail, buses, trams and trains, ticketing, data, network management, and information and communications technology capacity and capability
  • Major service and policy changes, including initiatives that manage demand, sustainability requirements, and sequencing and timing for delivering new transport infrastructure
  • Alignment with endorsed, strategic land use plans, including adopting the same time horizon (while Plan Melbourne and regional growth plans have 30-year horizons, publication dates mean the former considers the period to 205039 and the latter looks out to 204140)
  • The approach and consequent changes required to support emerging transport technologies, how these align with the wider transport network, and measures to mitigate unintended consequences 
  • How policies, reforms and projects combine to achieve the Victorian Government’s transport and broader objectives, including economic growth, social inclusion and intergenerational equity
  • Achieving net zero emissions and climate adaptation, under the Climate Change Act.41

Transport planning must be agile and adaptable to changing conditions and show how network changes already underway can combine to achieve better outcomes. The transport plan should also fully address relevant and agreed recommendations in this strategy, and be regularly reviewed and updated to reflect changing needs.

Recommendation 34: Review Victoria’s infrastructure contribution system to cover gaps

In the next two years, complete a review of Victoria’s many infrastructure contributions schemes to create a consistent and efficient system that contributes to Victorian and local government infrastructure costs. A revised infrastructure contribution system can apply more broadly, including in established suburbs, growth areas, peri-urban areas, and regional cities.

Up to 80% of Melbourne’s new homes are built in established suburbs.42 Other areas, including peri-urban areas and regional centres, also have high housing growth. Established areas need investment to support more homes or greater commercial development, particularly if infrastructure needs to be upgraded or augmented, or land needs to be acquired for infrastructure expansion.43 For example, when existing facilities can no longer accommodate extra demand in rapidly growing established suburbs, the Victorian and local governments must buy land for new schools, open space and community facilities.44 Depending on the location and extent of growth in peri-urban areas, they may also require upgrades and new infrastructure similar to new growth areas.

Infrastructure contributions schemes are widely used in new growth areas but are less common in established Melbourne suburbs, regional centres, and peri-urban areas. Arrangements can be complex, time consuming, inflexible and inconsistent.45 A patchwork of inconsistent infrastructure contributions schemes can disincentivise development, with developers avoiding areas where they would need to make contributions.46 Contributions could also suppress development in the places where it is preferred. The New South Wales Productivity Commission found New South Wales, infrastructure contributions system to be overly complex, with disparate special contributions and missed opportunities to capture value uplift around major projects.47 The New South Wales Government accepted the Productivity Commission’s recommendation to include a contribution for state infrastructure.48

Outside new growth areas, infrastructure contribution schemes are managed by local governments and are largely used for local government infrastructure. Unlike the Growth Areas Infrastructure Contribution (GAIC), which has had mixed success in contributing to funding state infrastructure,49 infrastructure contributions usually do not fund Victorian Government infrastructure.50 Infrastructure costs outside new growth areas fall more heavily on the Victorian Budget.

The Victorian Government should complete a review of Victoria’s infrastructure contributions schemes. Informed by this review, a consistent, efficient and transparent51 contributions system should be implemented with a clear scheme for the level of infrastructure costs to be collected from developers. The system should apply to areas with significant housing growth or new commercial development.52 It can help fund local and Victorian Government infrastructure required to support population and commercial growth (see recommendation 72). Broad coverage could keep charges relatively low and predictable. The revenue can fund infrastructure priorities to support and manage growth.

The revised contribution system could impose a charge on sites with extra dwellings or commercial floorspace and need not be limited to individual precincts. For example, it could extend to all subdivisions that create more dwellings. The revised system should be able to be readily implemented, and have strong monitoring, oversight and evaluation mechanisms, including set review timeframes. If it generates contributions at similar per-home rates as the GAIC, a new system could raise many hundreds of millions of dollars annually.53

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