Land & Environment Court Gives Go Ahead for Two Mindarie St Lane Cove Nth Boarding Houses

The NSW Land and Environment Court has ruled Staldone Rosedale Pty Ltd (the Developer) can build boarding houses on land located at 47 and 51 Mindarie Street Lane Cove North. They will each be six storeys.  A free-standing house at 49 Mindarie Street will remain between the two boarding houses.  The owners of 49 Mindarie Street refused to sell their property to the Developer.

The Developer will be building “new generation boarding houses”.

Developers are keen to build new generation boarding houses as space bonus allow increased floor space usually around 20%, over what is otherwise permitted for residential flat/unit developments.

The Developer has been given the green light despite numerous submissions objecting to the boarding houses from residents and the Stringybark Creek Resident’s Association.

Residents were concerned about the height of the buildings and traffic and parking congestion. They were also concerned the proposed boarding houses were out of character with the rest of the neighbourhood.

Originally the Lane Cove Council approved the development on the basis of some alterations, however as the development received 10 or more objections it had to be referred to the Lane Cove Local Planning Panel.

The Lane Cove Planning Panel unanimously voted against the development at 49 Mindarie Street.   The Panel accepted that the site may be developed with a boarding house.  However, this application was denied as it was out of local character.  The development application for 51 Mindarie Street was not referred to the panel.

The Panel was of the view the Developer could lodge a new plan with a scaled-down building and fewer units.

Background Information

The Land and Environment Court (the Court) addressed the following objections:

• The proposed development at No 47 Mindarie Street exceeds the height standard.
• The proposed development, if replicated on No’s 47 and 51 Mindarie Street isolates the property at No.49 Mindarie Street.
• The resulting development is uncharacteristic of the built form in the local area.

Exceeding Height Standards

The Developer submitted boarding house developments were under-supplied in the Lane Cove local government area and strict compliance with the height standard would require the removal of the top floor of the proposed development at No 47 Mindarie Street, which would deprive the area of 195m2 of gross floor area.

The court held that strictly enforcing height requirements:

“would be to remove the top floor, may result in a complying building, but would comply at the cost of four boarding rooms to resolve an exceedance that I conclude does not impose unreasonable adverse impacts on properties in the area.”

49 Mindarie Street Isolation

The Court ruled the Developer had taken all steps to acquire 49 Mindarie Street to form part of the development and therefore an isolated house was not an issue.

The Court summarised the steps taken to acquire the property:

• On 31 March 2016, the sites at No’s 47 and 51 Mindarie Street were advertised for public tender by the NSW Land and Housing Corporation, with a closing date for tender of 20 April 2016.
• On 1 April 2016, the Developer engaged Harcourts Forest Group (Harcourts) to contact the owner of No 49 Mindarie Street, and the owner is provided with a summary of the conversation the following day.
• Between 2-20 April 2016, Harcourts seeks further contact but is unsuccessful.
• On 20 June 2016, the Developer is advised of its success and contracts on the sale are exchanged for the sites at No’s 47 and 51 Mindarie Street as well as five other properties in close proximity. A price of $2,000,000 is paid for 47 and 51 Mindarie Street.
• On 22 June 2016, Harcourts writes to the owner of No 49 Mindarie Street to advise of the purchase of 47 and 51 Mindarie Street and inviting further negotiations.
• On 27 June 2016, the owner of No 49 Mindarie Street declines the invitation, suggesting a delay of one year and an outright sale.
• On 1 July 2016, Harcourts advises that the Developer would consider an outright sale, with delayed settlement suited to the needs of the owner. The owner declines in writing the same day.
• In July 2017, around a year later, Harcourts makes contact by telephone with the owner who again declines the invitation to negotiate.
• In August 2018, the Applicant engages Belle Property Lane Cove (Belle Property) to initiate negotiations with the owner of No 49 Mindarie Street. On 14 August 2018, Belle Property delivers by hand an offer in writing of $2,500,000 via unconditional contract, a 6 week settlement, 10% deposit, a rent free period of 6 months and an additional 6 months at half the value of market rent. The owner declines and returns the offer.
• On 20 August 2018, the owner of No 49 Mindarie Street emails Belle Property to advise:

“…

We have no plans to sell under 5 mill, the developer may proceed to build around us, we have no objection.”

The Court ruled:

“I conclude that the site at No 49 Mindarie Street is capable of development for a use permitted in the R4 zone, and I also consider the attempts by the Applicant to enter negotiations for the purposes of site consolidation to be genuine, if ultimately unsuccessful.”

Not everyone wants to sell their home to developers, but if a developer makes a genuine attempt to negotiate, and an offer is not accepted, they can develop either side of a free-standing home.

Out of Character

The out of character argument was also not successful.  The Court looked at an aerial photograph of Mindarie Street and noted the photograph:

“shows anything but consistency in the rhythm of Mindarie Street. The residential flat building at 31-39 Mindarie Street appears a consolidation of four or five sites while the residential flat building at 41-45 Mindarie Street appears a consolidation of three sites. The residential flat building at 2-4 Pinaroo Place is a consolidation of 2 sites.”

Boarding Houses Development Applications in Lane Cove

There are two other current boarding house development applications being considered by Lane Cove Council.

382 Pacific Highway Lane Cove

The site is currently the home of 99 Bikes (who will continue to trade while the DA is being assessed).

The plan includes:

• 54 Single Rooms (all incl. ensuite & kitchenette;
• There will be a maximum of 95 boarders; and
• All existing structures will be demolished.

28 Longueville Road Lane Cove

A Development Application has been lodged for the demolition of existing structures and a boarding house development containing 44 boarding rooms housing on land at 28 Longueville Road Lane Cove (DA91/2020). 

Although it is located on Longueville Road many people refer to this stretch of road as Epping Road. This week, the Lane Cove Planning Panel refused to DA consent.  The developers can appeal this decision.

Are boarding houses a solution to affordable housing?

In 2019 the City Futures Research Centre at the University of New South Wales conducted a survey of recent boarding house developments. The survey found that occupants of boarding houses were more aligned in profile to renters than those “traditional boarding house occupants on social housing waitlists”.

The researchers further found that recent boarding houses were “not a particularly affordable housing option” and were being developed as “micro-apartments” rather than an affordable housing solution.

There is no requirement to set boarding fees at an affordable rent and thus be truly classified as affordable housing.  There are maximum tariffs set by Revenue NSW. If rates fall under this maximum amount owners are exempt from paying land tax. If owners charge above the threshold, they are required to pay land tax.

In 2017 the Sydney Morning Herald reported that several councils were not happy with the Boarding House planning laws.  They quoted the Canada Bay Mayor who said developers “were trying to exploit the policy” for financial gain, and said the council had “limited capacity to refuse development applications” providing developers complied with the minimum standards prescribed by the policy.

NSW Planning Reviews Boarding House Planning Rules

In September this year, NSW Planning released a paper, for public comment, on proposed changes to boarding house rules that addressed the issues above.  The public comment period has closed and NSW Planning is reviewing public submissions.  The discussion paper noted:

“Since the introduction of the ARHSEPP, councils and communities have raised concerns about the boarding house provisions in the ARHSEPP. Key community and council concerns have centred around the lack of affordability of boarding house rooms; the use of the boarding house provisions to develop student housing; the excessive scale and bulk of some boarding house developments; the compatibility of boarding house development with low-density residential areas; and the clustering of boarding house development in certain areas.

In response to on-going concerns regarding boarding house developments, the Department worked with a group of councils during July and August 2019, to prepare advice to the Minister on issues associated with the boarding house provisions of the ARHSEPP. The report prepared by the Council Boarding House Working Group made 14 recommendations. The report is now available on the Department’s website. The key recommendation of the Working Group was that the definition of ‘boarding house’ should be amended to include a requirement that boarding house rooms are affordable.”

Unregistered Boarding Houses

All boarding houses are to be registered with the Department of Fair Trading.  Lane Cove Mayor Pam Palmer tabled a Mayoral Minute at the Lane Cove Council’s September 2019 meeting which stated:

“The creation of a Boarding House Register was one of the initial key requirements of the Boarding Houses 2012 Act. It clearly outlined both General and Assisted boarding houses had to register prior to operation. Previous to this new initiative there was no existing state-wide register and data collection varied across councils. However, many properties remain unregistered, and many properties are operating as a boarding house without any formal notification nor registration with Local Government.

There appears currently to be a variety of reasons presented for the non-registration of boarding houses. These can involve operators simply being unaware of the requirement to register their boarding house with Fair Trading. However, of more concern there are just as many owner/operators who desire non detection possibly in order to evade close scrutiny and oversight.

Whilst the Register is hosted by Fair Trading, responsibility for enforcing the registration requirement was handed to Councils with no additional resources offered.”

The Lane Cove Council resolved to:

• remind boarding house operators of their obligations, possibly as part of the development application process/conditions of consent;
• lobby the State Government, including through LGNSW to:-
  • Improve compliance of boarding house operators with their obligations to register, possibly through better education or through new regulations;
  • Ensure that boarding house fees are transparently advertised to include a reference to the maximum tariffs set by Revenue NSW; and
  • Change the land tax exemption provisions to ensure they are enforceable.

It might be time for the Lane Cove Council to have in place a registration and enforcement plan for operators who fail to register.