Sydney’s growing pains: land rezoning a potential billion-dollar deal for developers after local council sidelined

A decision by the New South Wales government to fast-track rezoning for 12,900 houses on Sydney's fringe has raised questions about the potential influence of developers and their lobbyists over the timing of new land releases.

Documents obtained by Guardian Australia show an area of land at Appin, in sensitive koala habitat 80km south-west of Sydney, is being rezoned from farmland to allow for a massive new housing estate, despite departmental advice in 2019 that it was not needed for housing supply until 2036.

The area has no public transport - existing or planned - inadequate water supplies and is in a region known as a koala habitat.

Serious concerns about the proposal have also been raised by other arms of the state government including the Environment and Heritage office, Transport for NSW, Water NSW and the Department of Health.

The rezoning of the 1,284-hectare site, owned by the developer Walker Corp, along with two smaller sites owned by Ingham Property andthe developer LendLease, could lead to a dramatic increase in the value of the land to hundreds of millions, even billions, of dollars. The decision to fast-track rezoning of the sites was announced in November.

In response to questions from Guardian Australia, the NSW planning department denied lobbying by developers had influenced any decision and said the sites were rezoned as part of a new pilot program that allows developers to nominate projects for consideration under a fast-track rezoning assessment.

The department said approvals, subject to four key criteria including demonstrating public benefit and availability of infrastructure, were ultimately granted by the secretary of the department, not the minister.

But the guidelines for that program, known as the rezoning pathways program, were not released until December, the month after the Appin announcement. The department said it used the same criteria to approve the fast-tracked sites. Under the guidelines, the rezoning must be approved by July - quicker than some domestic house renovations.

Appin is the second large housing estate by Walker Corp to have its rezoning fast-tracked by the department while the planning minister, Anthony Roberts, has held the portfolio.

Three years ago the planning department advised that there was no need to fast-track the rezoning of land at Appin.

That advice, seen by Guardian Australia, was prepared in October 2019 for the former minister, Rob Stokes, for a meeting with Walker Corp.

"The release of land in Appin is not likely to be required to meet housing needs prior to 2036," the departmental briefing said. "Wollondilly Council is not supportive of rezonings in West Appin until 2036 as they want the Wilton Growth area to be established first."

The planning department's published policy on development in the region, the Greater Macarthur 2040 Plan, also says Appin should be rezoned and released "in the long term".

But the NSW government has since changed its mind.

Within days of becoming minister for planning for the second time in December 2021, Roberts met with Walker Corp, which now employs Rob Vellar, the minister's former chief of staff from 2015 to 2018, when he was previously in charge of planning.

It is not known if Vellar attended the meeting or was informed of the content of the discussion. Robert's diary disclosure simply lists it as an "introductory meeting". Neither Vellar nor Roberts responded specifically to questions from Guardian Australia querying if Walker Corp had lobbied the minister, although the department was clear that no lobbying by any developer affected decision making.

The independent mayor of Wollondilly, Matt Gould, said he was stunned by the fast-track rezoning announcement and accused the NSW government of putting "billionaire developer interests before the needs of the community to the detriment of current and future Wollondilly communities and the endangered koala population".

"Along with Wilton, these new developments would effectively triple the population of the Wollondilly Shire, putting unprecedented pressure on the Shire's already struggling road network and highlighting the lack of public transport options, schools and health care," he said on Facebook on hearing about the takeover.

He has warned that further development at Appin, on top of the major development at Wilton, will spread scarce infrastructure dollars too thinly.

Several departments - including the Environment and Heritage Office, Transport for NSW, Water NSW and the Department of Health - have also raised objections to the Walker Appin development, before and during the exhibition process. These include whether the koala corridor is sufficiently protected, concerns about preserving the Appin massacre heritage site, the lack of a detailed transport plan and future liveability.

"The precinct should not be rezoned until a satisfactory agreement [on infrastructure] has been exhibited and finalised," wrote the Western Parkland City Authority, which has oversight of development in western Sydney.

Getting more houses built has become a priority of the Perrottet government. It announced in the June state budget that it wanted to speed up the release of land and allocated $73.5m over five years for the department to "lead" faster rezonings by councils.

Rezoning - the process of changing allowable usage of land - is usually a council responsibility because they have a better understanding of local conditions and infrastructure pressures. The state government signs off on council's land use plans to ensure they are consistent with state planning objectives and policies.

But the rezoning pathways program sets up two processes, one of which removes the local council, in this case Wollondilly, from the decision-making process. Proposals are instead "state-assessed".

The department said: "Appin, Gilead Stage 2 and North Appin were identified as proposals for state assessment given their combined significance, complexity, and strong housing and environmental benefits if approved."

Asked what had changed since 2019 to bring forward the need for development at Appin, the department pointed to future housing projections and specifically a future housing supply analysis in western Sydney. It said the analysis had been undertaken by consultants Atlas Urban Economics for Walker Corp.

The study said there wasn't enough rezoned land in the pipeline to meet housing demand, with a projected shortfall of 67,00 homes by 2036 and 118,000 homes by 2041.

The department also pointed to the work done in 2020 on two of the projects - Appin and Gilead 2 - which were used as the subject of another pilot program called the technical assurance panel, described by the department as "a new way for state agencies, councils and landowners to work together to undertake strategic investigations for precincts". The panel was charged with working through some of the technical and strategic difficulties associated with the sites, such as koala corridors, water, road and transport access to prepare the sites for release in the future. The panel reported in October 2022.

The third site, owned by Ingham, which can support 3,000 homes, is between the two sites and was also included on the fast track. It was not included in the panel but the chief executive of Ingham, Matthew Ramaley, said many of the broader issues had been addressed in that process.

He said developers were extremely supportive of Roberts' approach to "get the government moving".

"He gets it," he said, pointing out that rezonings took well over two years in NSW compared with Victoria's one.

He said Roberts had made several callouts to developer groups to nominate sites that were "shovel ready", like the Ingham site, and the industry welcomed the fresh approach.

A spokesperson for the Department of Planning said: "The department's secretary selected the sites, following recommendations from an assessment panel made up of senior department staff. The minister did not have a role in nominating proposals."

One of the four criteria used was how well the proposal demonstrates public benefits, including through housing supply and alignment with state policies and land use strategies, the department said.

A spokesperson for the minister said the nominating process had been designed "in lockstep" with independent probity advisers and was being carried out in accordance with strict probity provisions.

"The Department proactively sought advice from the NSW Independent Commission Against Corruption to ensure the process safeguards against corruption risks," the spokesperson said.

When contacted by Guardian Australia, Icac said it had given general advice to the department about the rezoning pathways program in December, a month after the fast-tracking of the rezoning of Appin was announced. Icac said its advice was "general in nature not intended to be legal advice or a ruling on this issue".

The founder and executive chairman of Walker Corp, Lang Walker, is known for his forceful advocacy of his company's developments. When Labor was in power, Walker Corp tried to persuade successive planning ministers to open up sites on the edges of Sydney.

Walker Corp has been working to overcome the various impediments to developing Appin since it bought the land in the early 2000s.

In 2016 it convinced Gladys Berejiklian's government to include Appin in the Macarthur growth strategy, after it had earlier been excluded in favour of areas closer to Campbelltown. It was included as a development area in "the long term".

When Roberts was minister for planning between January 2017 and March 2019, the ministerial diary disclosures show he met with Walker Corp at least three times to discuss planning issues and housing affordability in NSW. He also met twice with the Urban Task Force, an industry lobby group in which Walker Corp is a prominent member.

In 2018 the NSW government rezoned Walker Corp's development, Wilton South East, in just over a year.

The development, also known as Wilton Greens, is now under construction. Walker Corp sold the project to a Chinese developer, Risland, previously known as Country Garden, which has started construction.

In 2018 David Shoebridge, a former NSW Greens MP who is now a federal senator, delivered a fiery speech in the NSW parliament questioning why the planning department and Roberts as minister had decided to fast-track Wilton.

"Until last year the council was involved and was following a standard planning route," he told parliament. "But this is New South Wales. So with hundreds of millions in profits up from grabs, that was not going to last.

"Wilton is a very poor choice for large-scale development. It has no public transport, an inadequate water supply, major environmental constraints and no identifiable way to dispose of its sewage.

"So the players decided to give the proposal a big push," Shoebridge told parliament, listing the meetings with the minister.

A spokesperson for the department said no development at Wilton had ben fast-tracked.

"The rezoning of the South East Wilton Precinct was the first step in the detailed planning for this section of the Wilton Growth Area," they said. "The council had since been involved in the steps to guide development in the area."

When Rob Stokes became minister after the 2019 election, he also met with Walker Corp.

The meeting took place in December that year, though the original request had been for a meeting with then premier, Berejiklian, at the behest of newly elected MP for Wollondilly, Nathaniel Smith.

Smith is part of Roberts' sub-faction and worked on his staff before running for parliament in 2019.

Briefing notes from the department ahead of the meeting urged the minister to hold the line on Appin because the land was not needed until 2036.

Stokes stuck with the departmental advice not to rezone Appin.

The former minister was not popular with NSW developers. His insistence on greater planning controls designed to ensure sustainable suburbs in Sydney's west have now been scrapped by Roberts.

When Dominic Perrottet became premier in December 2021, he reappointed Roberts to the planning portfolio. Perrottet and Roberts share the view that rezoning more land will lower the cost of housing and that developers should have a freer hand.

Despite the earlier meetings with Walker Corp when he was minister between 2017 and 2019, Roberts had an "introductory meeting" with Walker Corp on 21 December 2021, within days of becoming minister again.

The departmental spokesperson said: "No lobbying influenced any decision making."

Walker Corp's Rob Vellar is a longtime political ally of Roberts and his former chief of staff.

A fellow member of the Liberal party, Vellar has known Roberts for two decades. When Roberts became fair trading minister, Vellar was appointed deputy commissioner at Fair Trading. He moved to the resources portfolio when Roberts became resources minister and joined his personal staff around the 2015 election.

In 2017 Roberts became planning minister for the first time with Vellar as chief of staff. Vellar left in 2018 to work for the government-owned developer, Landcom, but now works for Walker Corp. There is no suggestion that Vellar is not appropriately qualified for the various roles he has been appointed to - and no suggestion of wrongdoing in the appointment processes - but they do highlight his political links to Roberts.

Vellar keeps a low profile - he has no public social media presence.

But he has made news a few times. During an Icac inquiry into the Daryl Maguire's dealings with property developers, investigating whether Maguire misused his office as an MP for his own financial gain, Vellar was called to give evidence about a November 2017 meeting he had in Maguire's office with Maguire and a developer, Jo Alha when Vellar was Roberts' chief of staff.

Maguire told Icac in 2020 a text message he sent asking Vellar to come to the office for "a glass of red" was code for the meeting with the developer.

Vellar told Icac he felt ambushed by the meeting and left straight away, feeling he had been asked there on "false pretences". Maguire described this claim as "not true". At the time Maguire was a paid lobbyist for Country Garden. Maguire has admitted he used his position as an MP to make money for himself and his associates.

Although Vellar was called as a witness in the Icac investigation into Maguire, neither he nor Roberts are or have been accused of any wrongdoing.

He is seen regularly at Parliament House. He chairs of Greyhounds Australasia and represents the industry's interests to government.

Roberts is the most senior member of the Parliamentary Friends of Greyhound Racing, a group of MPs sympathetic to the industry.

The relationship of planning ministers to developers and specifically ministers being granted the power to approve developments was the subject of an Icac report a decade ago.

In the 2010 report, Icac warned that a planning system that gave ministers wide discretion based on loose criteria could give rise to perceptions of undue influence.

"The existence of a wide discretion to approve projects that are contrary to local plans and do not necessarily conform to state strategic plans has the potential to deliver sizeable windfall gains to particular applicants," the report notes. "This creates a corruption risk and a community perception of a lack of appropriate boundaries."

The Icac report was in response to multiple political scandals over multimillion-dollar developments fast-tracked by Labor - sometimes in defiance of their own planning policies.

The NSW government's decision to fast-track the rezoning of Appin could raise the same potential perception. It is inconsistent with the published Greater Macarthur 2040 Plan and, according to the environment office, is inconsistent with koala and environmental planning policies.

A spokesperson for Roberts told Guardian Australia: "Decisions with respect to planning are made on the basis of expert advice provided by the Department of Planning and Environment. No individual or corporation has the ability to impact the decision making outside formal processes employed by the department."

Guardian Australia sent detailed questions to Walker Corp and Vellar but they did not respond.

The NSW Greens' spokesperson on planning, Cate Faehrmann, who recently visited the Macarthur region, said: "It beggars belief that the government can be approving new growth centres for upwards of 55,000 people without any guarantee of a sustainable water supply or that public transport options are available."

The Department of Planning said there were many more steps before building began.

"The approval of a planning proposal does not allow development to occur," a spokesperson said. "It simply changes the rules of a site, and importantly, would lock in the new environmental conservation lands needed for koala habitats and corridors.

"A structure plan, development control plan and development applications would still need to be lodged, assessed and finalised, which would be subject to community feedback."