He’d actually foreshadowed these changes before, but this time there’s some more detail:
“These sensible changes to the planning scheme will allow expansion of new and existing retail businesses in Victoria.
“We have revised the bulky goods definition and removed floorspace restrictions, which will allow businesses to open smaller stores in areas where a large store may not be viable” Mr Guy said.
“These reforms give certainty to the retail industry about where stores may be developed.”
The background to this debate is well put in the Retail Policy Review discussion paper prepared under the previous government, which you can find here. As noted in that review, the “restricted retail” definition in planning schemes was an attempt to recognise that some kinds of shops would struggle to afford floor space in traditional retail centres:
The restricted retail premises definition has its genesis in furniture and floor covering stores and the former ‘peripheral sales’ definition. Originally, these stores were genuinely selling bulky goods – such as furniture, lighting equipment, carpet and floor coverings – and they required larger floor areas for display of goods and vehicle access for loading and unloading of goods. There was logic in being able to locate such uses on the ‘periphery’ of existing centres and not impact on the ‘core’ retailing within the centre. These peripheral locations also tended to offer lower site costs offsetting lower retail turnovers relative to floor area.
To aid such businesses in finding places to locate, restricted retail premises get preferential treatment in industrial zones. So while shops are normally prohibited in these areas to avoid them driving up rents to a level industry couldn’t afford, restricted retailing is allowed, subject to getting a planning permit. Think of your classic homemaker centre: often those are in industrial zones, out of activity centres and away from public transport.
However, as the review notes there has been continued pressure in those centres for a wider range of goods to be sold. The classic example is a place like JB Hi-Fi which has some nominally bulky goods (giant screen TVs) but which is also selling phones, DVDs, cameras, computers, memory cards, and so on. As the discussion paper put it:
…there is significant concern about the increasing number of ‘non bulky’, high-value goods on sale at restricted retail premises (such as small household electrical goods) which were traditionally sold from in-centre locations. According to BIS Shrapnel (2008), audio-visual and data processing equipment now accounts for the greatest expenditure in ‘bulky goods retailing’, outselling furnishings, floor coverings and household appliances. This adds to confusion about the role and relevance of the restricted retail premises definition.
Until now there have been two main safeguards that stop a wider range of retailers from taking advantage of cheap industrial land: a list of approved types of premises in the definition of restricted retail; and a minimum floor space (usually 1000m2). The reasoning here is that of you are able to operate in a smaller store, there is no need for you to be locating in fringe locations and you should be in an established centre.
The existing review into all this stalled after the release of the discussion paper in 2008. While that paper recognised various competing imperatives, it ultimately came down on the side of limiting restricted retail. Its recommendations included retaining the focus of the restricted retail definition on bulky goods:
Maintain the existing definition of ‘restricted retail premises’ in planning schemes and the VPP and limit any future changes that would broaden the range of goods able to be sold at such premises.
Furthermore, it recommended that restricted retail be prohibited in industrial areas, meaning that when new out-of-centre premises were proposed, they had to go through an amendment process to demonstrate that their use of the land was appropriate:
Ensure that if large retail facilities are proposed in locations that have not been designated as activity centres, they should be required to undertake a strategic assessment and require rezoning to an appropriate zone.
This all has a basis in long-standing activity centre policy, which tries to direct retailing toward centres that are close to public transport and other facilities.
The new announcement moves in the opposite direction. It flags changes to both of the existing limitations on restricted retailing: the definition will broaden, and the floor space requirement will be removed. As I write the exact terms of the changes are not yet online: neither Planning Schemes Online or Planning Amendments Online has yet been updated to reflect the foreshadowed Amendment VC88. We therefore also do not have the explanatory report that might provide strategic justification for the changes. (The press release tries to cover this by using the word “sensible” a couple of times).
Yet it seems clear that this is a big free kick for retailers, allowing more of them access to cheaper industrial land. How this supports policy to focus retailing in existing centres, close to transport and other community facilities, is not explained. Nor is it explained how the supply of industrial land will be protected from increased property values as retailers take advantage of the new controls. All in all it seems like a vote for the big box.
It will be interested to see what happens to the retail policy review from here. As of today it remains a nominally live project, with a forlorn page on the DPCD website headlined by the October 2008 discussion paper. I wonder how long that page will stay up. After all, one of the most important questions to be addressed by that review has now been resolved, and in a manner contrary to the direction in which the initial work had been leading.
The previous government deserves the dig Guy directs at them in his press release for never finishing that review. But he hasn’t done so either. And when the government rolls out a policy without even finishing the strategic work underlying it, it’s not even pretending to plan any more.
Photo by Martin Hopkins and used under Creative Commons licence. Click it for details.