Land and Environment Court New South Wales Medium Neutral Citation: Gray v Sutherland Shire Council [2015] NSWLEC 1102 Hearing dates: 4 March 2015. Further submissions filed 8 & 13 April 2015 Decision date: 21 April 2015 Jurisdiction: Class 1 Before: Morris C Decision: Appeal dismissed Catchwords: DEVELOPMENT APPLICATION: boarding house, social impact, density, impact on character of the area Legislation Cited: Sutherland Shire Local Environmental Plan 2006; State Environmental Planning Policy (Affordable Rental Housing) 2009; Environmental Planning and Assessment Act 1979 Cases Cited: Newbury Council v Secretary of State for the Environment NDSC [1981] [AC578]; Renaldo Plus 3 Pty Limited v Hurstville City Council [2005] NSWLEC 315; Amazonia v City of Sydney [2014] NSWLEC 1247; Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 Texts Cited: Sutherland Shire Housing Strategy 2012 Category: Principal judgment Parties: Robert Gray (Applicant) Sutherland Shire Council (Respondent) Representation: Solicitors: Mr G McKee McKees Legal Solutions (Applicant) Mr G Green Pikes & Verekers Lawyers (Respondent) File Number(s): 10639 of 2014 Judgment 1. Mr Gray lodged Development Application DA13/0763 with Sutherland Shire Council on 23 August 2013 seeking consent to demolish two existing dwellings and construct a two storey boarding house containing 23 rooms, one of which is to be a manager's room, and associated facilities at Nos 58 and 60 Karimbla Road, Miranda. The council refused consent on 17 February 2014 and Gray is appealing that decision. 2. The main issue in the case relates to the potential social impact of the development. The site and locality 1. The site comprises two adjoining allotments on the south-eastern corner of Karimbla Road and Mooki Street, Miranda and has frontages of 39.26m and 27.43m to each street respectively resulting in a site area of 1284sqm. The land falls from the north-east to south-west with a fall of approximately 2.5m. a number of trees across the Karimbla Road frontage of the site are to be retained. 2. Existing development on the site comprise single storey dwelling houses that would be demolished to allow redevelopment of the site. 3. A modern two storey dwelling adjoins the site to the east and a single storey dwelling with attached carport sits on the adjoining allotment to the south. 4. Two child care centres are located directly opposite the site in Karimbla Road and are operated by the one entity. Development on the northern side of that road comprises a mix of detached housing and two storey multi-unit dwellings whereas the majority of housing in Mooki Street is single storey detached dwelling houses. 5. A large local park, Centenary Park, is located to the west along Karimbla Road approximately 80m from the site and another in Woona Street to the east, some 200m away. The former provides a pedestrian link to President Avenue and properties to the south. Miranda Railway Station and shopping centre is 500m from the site and Sutherland Hospital approximately 800m to the north-east. 6. According to the council's evidence approximately 60 properties used for the purpose of social/affordable housing are located in close proximity to the site, predominantly owned and operated by NSW Land and Housing Corporation, with another owned and operated by a community housing group. Background and the proposal 1. Originally the proposal was for a 23 room boarding house however, as the result of discussions during the conciliation conference held before another Commissioner of the Court, the applicant sought and was granted leave to rely on amended plans. Those plans addressed a number of contentions in the case and reduced the number of boarding rooms to 22. A maximum of 37 residents, two of whom would reside in the Manager's room, would be accommodated in the boarding house. Residents would be subject to an Occupancy Agreement that would comply with the provisions of the Boarding Houses Act 2012 and the term of stay is a minimum of three months. 2. The proposed building would be setback a minimum of 6.5m from Karimbla Road, 3m from Mooki Street. Side boundary setback range from 1.843 to 2.795m to the eastern boundary and 7.05m to 11.42m from the southern boundary. 3. Parking for 5 cars and 5 motor cycles would be provided adjacent to the southern property boundary with a 200mm wide block wall of varying height proposed along that boundary that varies in height from 1.55m measured from the existing driveway level of the adjoining site to 2.15m where it coincides with the existing carport on that land. Driveway access to the parking area would be off Mooki Street with the vehicle crossing designed to ensure the retention of a large street tree. The landscape plan provides for the planting of 4 Eucalypt trees within the carpark adjacent to the common boundary with additional planting proposed within the carpark and front setback area. All existing trees on the site with the exception of a palm tree and a lilly pilly are to be retained. 4. The proposed ground floor provides two entries, one off Karimbla Road and the second off the carpark. Two communal living areas one on the northern side and the other on the southern side of the building are proposed along the eastern side and are separated by the proposed Manager's room. That room has a private courtyard. The main area of private open space is located off the southern common room. Eight other boarding rooms, varying in size from 15.44sqm to 20.95sqm are proposed, of which 4 are accessible rooms. Laundry facilities are also provided within the ground floor. 5. A further 13 rooms would be provided on the first floor varying in size from 15.71sqm to 21.79sqm. All rooms include individual bathrooms and kitchen facilities. 6. Rooms along the northern side of the building incorporate patios at ground level with balconies at the first floor level to four rooms. 7. In an attempt to address the council's concerns in relation to potential social impacts arising from the development, the applicant has prepared a Plan of Management (POM). In addition to the usual objectives of managing the premises, the plan includes eligibility requirements that require prospective tenants to be earning income in a prescribed band, not be in receipt of government benefits and establishes rent limitations. Students attending local educational establishments would be exempt from those requirements. The proposed clauses are: 5. Boarder Eligibility Requirements Rental and employment history background checks will be undertaken for all potential boarders upon application (as allowable under the Boarding Houses Act 2012). A potential boarder will need to comply with the following requirements to be eligible to sign an Occupancy Agreement: Persons in receipt of an income support payment from the Commonwealth Government will not be accepted as boarders. This provision excludes students attending nearby education facilities (e.g. Gymea TAFE) who may be in receipt of student support payments (e.g. Youth Allowance, AusStudy, AB Study). All boarders must be over the age of 18 years. No boarder is to pay greater than 30% of their gross income in rental payments. Subject to Section 6 below, this equates to a minimum wage of $43,340 per annum. Boarder to be made aware of required weekly rent rate. 6. Rent Rent is to be set at the market rent ($250-$280/week as of December 2014), to be adjusted in accordance with the CPI on an annual basis. Regardless of the above, the rent shall not rise above 30% of the Moderate Household Weekly Income Band, being between 80% and 120% of the median personal weekly income for New South Wales. The planning controls 1. The site is within Zone 4 – Local Housing under Sutherland Shire Local Environmental Plan 2006 (LEP). The objectives of that zone are: (a) to allow low density residential buildings that complement the predominantly urban landscape setting of the zone, characterised by dwelling houses on single lots of land, (b) to ensure the character of the zone, as one comprised predominantly of dwelling houses, is not diminished by the cumulative impacts of development, (c) to allow development that is of a scale and nature that preserves the streetscape and neighbourhood character of the zone, (d) to allow residential buildings that provide a variety of housing choices for the needs of the local community, (e) to allow non-residential buildings that provide necessary services to the local community without adversely affecting the residential amenity of the zone. 1. Boarding houses are permissible with consent in Zone 4. The height of the proposed development is less than that permitted under clause 33. 2. Clause 35 provides for a maximum floor space ratio (FSR) and in Zone 4 the maximum is 0.45:1. 3. Clause 48 and 49 require consideration of urban design matter listed in those clauses. There is no contention that the requirements of those clauses are not met. 4. The council has prepared and exhibited a draft Local Environmental Plan (draft LEP) for the whole of its local government area. That plan was forwarded to the Minister to be made following a council resolution passed on 10 November 2014. The draft plan proposes to rezone the site and surrounding land to R3 – Medium Density Residential. Boarding houses would remain permissible in that zone. 5. The application relies on the FSR provisions of clause 29(c)(i) State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPPARH) that provide for an additional 0.5:1 floor space. This has the effect of increasing the maximum FSR to 0.95:1. The proposed FSR is 0.59:1 so is less than permitted however exceeds the development standard prescribed in the LEP. The issues 1. The remaining contentions in the case are the social impact and crime risk associated with the development; density and impact on adjoining residents; impact on trees; failure to provide a satisfactory POM and the issues raised by residents who objected to the application. The applicant has now prepared a POM however the council raises concerns in relation to the clauses that apply to tenancy restrictions. The evidence 1. The hearing commenced on site with a number of residents addressing the Court in opposition to the development. The issues raised are summarised as follows: * Concerned about safety, security and worsening of current anti-social behaviour in the area including vandalism, theft and malicious damage; * No need for a boarding house in the area, minimal demand for student accommodation, concerned about the type of people it will attract; * Will exacerbate existing problems associated with lack of on street parking; * Traffic safety; * Concerned about safety of children walking to and from school, using the park and childcare centres; * Area already has a large number of public/affordable housing; * Not satisfied the Plan of Management will be adhered to; * Loss of vegetation. 1. After hearing general evidence, the Court inspected the two adjoining properties in the company of the parties and the owners of those properties. The owners of the property to the east of the site in Karimbla Road were concerned the proposed building would overshadow the kitchen window of their dwelling causing loss of light and dampness. 2. The owners of the property to the south are concerned about loss of property value; the number of people who will reside in the boarding house and the impact on infrastructure and the amenity of neighbours; likely social impacts; traffic and noise associated with the use of parking areas; problems with rubbish, bin storage and collection and vandalism. 3. Expert town planning evidence was provided by Mr J Mead for the applicant and Ms D Pinfold for the council. Professor R Ryan (applicant) and Mr D Ackroyd (council) provided social planning evidence. 4. The planning experts agree that SEPPARH allows for development of the density proposed and places no limitations on population density. Whilst the proposal will result in a population density that is greater than on adjoining sites, any potential impacts of this population density can be managed by the ongoing implementation of the POM. They note the site is earmarked to be included in a medium density zone under the draft LEP and agree that the proposed built form is not inconsistent with the character of the locality proposed under that draft plan. 5. They also agree that the potential visual privacy issues are appropriately addressed through design, particularly the proposed separation of the proposal to the southern neighbouring property and boundary wall. Potential impacts of noise and anti-social behaviour can be adequately managed through the implementation of the POM. They agree the impacts of vehicle noise will be minimal given the parking layout which minimises the extent of manoeuvring required and the 2m high brick boundary fence along the southern boundary. 6. In relation to the contention of tree loss, the experts agree that, subject to the retention of the street tree near the southern site boundary in Mooki Street, the proposed landscaping indicated in the amended landscape plan and conditions of consent will appropriately balance the built and natural environment on the site and will assist in ameliorating impacts of bulk in appearance of the proposed building. They agree the proposal is acceptable in streetscape terms and will provide appropriate levels of amenity for boarders. 7. Ms Pinfold's concerns in relation to the impact of the required fire hydrant on the street tree was discussed during the site view and agreed conditions of consent have been prepared that address that issue. 8. The planning experts agree that, subject to the enforcement of the income provisions of the POM, that document, as finally agreed, would adequately address operational matters and assist in minimising impacts of the proposal on the amenity of neighbouring properties and the locality. 9. The social planners agreed that there is a need for affordable housing in the Sutherland Shire with the Sutherland Shire Housing Strategy 2012 recognising the need to expand housing options for key workers. They also agree that it would not be desirable for social/public housing in the area to be increased due to the density of this form of housing that currently exists in the area, and the existing problems with anti-social behaviour. They conclude however, subject to the proposed conditions on occupancy that would ensure that only persons within certain income groups are permitted occupancy of the rooms and set minimum and maximum rent levels, the development ought be approved. 10. The social planners agree that the relevant social impact considerations for this matter are: * The extent of reported existing anti-social behaviour indicates that the current levels of social housing has reached its maximum threshold in this locality; * The addition of further social housing has the potential to add negatively to the existing cumulative impact in this residential area, including a disproportionate number of people in the locality who are socially and financially disadvantaged; * This is not a proposal for social/public housing but for a New Generation Boarding House which will offer housing choice for people who are not very low or low income but for people on moderate incomes. 1. These conclusions are based on the ability of the Court to impose, through the POM, restrictions on the income levels of proposed occupants of the boarding house. 2. Despite this agreement, Mr Ackroyd is concerned that where there are threats or potential threats of serious social impact, lack of full certainty about those threats should not be used as a reason for approving the planned intervention or not requiring the implementation of mitigation measure and stringent monitoring. He says there is a need to balance the need for appropriately placed affordable housing alongside the need to ensure positive social outcomes. The success of the proposed development depends on its ability to attract lodgers on moderate incomes, who would be less likely to add to the cumulative social impact of low cost affordable housing that have caused ongoing problems of crime and anti-social behaviour in the local area. He says the levels of affordable housing in this locality have reached a tipping point. 3. He says that there are a range of factors that are contributing to the existing anti-social behaviour in the area and that this can't solely be confined to people who reside in social housing. It is also attributed to alcohol consumption at nearby hotels and clubs in Miranda and he considers this would increase with the additional restaurants that are to open in Westfield. Other urban design issues like the laneway link in Kirkby Place also contribute to the issue. 4. Professor Ryan notes the proposed market rent for the development has been set at a level that will attract a tenant mix that will be relatively more advantaged that the existing population. In contrast to low-cost community, social and public housing tenants, who may have a need for higher levels of assistance, affordable housing tenants require little or no assistance in meeting their needs. She says that whilst the existence of anti-social behaviour potentially associated with tenants of low-cost community, social or public housing in the locality may indicate the threshold for this particular type of housing may have been reached, it does not indicate a threshold for affordable housing relevant to this proposal has been reached in the area. 5. The POM incorporates provisions that Professor Ryan says mean the proposed development is explicitly targeted at tenants who are moderate income earners (i.e. key workers). Such tenants may include persons earning more than $43,340 per annum, in the following sectors, education (government and non-government teachers, early child area managers and teachers), health and emergency services sector (hospital registrars, police officers, nurse unit managers, ambulance officers and paramedics) and property and real estate sector (asset managers, valuers, retail centre managers, assistant development managers, commercial, industrial and retail property managers and facilities managers). 6. The experts also agreed that the premises is likely to attract retail workers who are employed in the Miranda Shopping Centre including the large Westfield complex. 7. For this reason, Professor Ryan is of the opinion that the proposed development will not contribute to any existing locational disadvantage. The proposed restriction on income and rental levels is, according to her evidence, consistent with the provisions of SEPPARH and the Boarding House Act as it allows the private sector to provide affordable housing and set rent levels which is common practice. That practice is that the rent is moderate and affordable and ensures persons are not in housing stress. In Miranda, 17% live in housing stress so that statistic indicates there is a need to set the rent in the moderate range. 8. Professor Ryan says Sydney has a housing affordability crisis and all ranges of housing are in demand. The purpose of SEPPARH is to increase the supply of housing types and range of incentives. New Generation Boarding Houses (NGBH) are not designed to cater for low incomes, there is a stereotype about boarding houses. The purpose of NGBHs is to assist people on moderate incomes. As the proposed development is to have market rental rates targeted at moderate income earners, is not targeted at persons in receipt of Commonwealth Government income support payments nor is it provided by a State or Territory Government or local council housing authority, Professor Ryan concludes that the development will not contribute to any existing locational disadvantage. 9. Despite the expert evidence, Mr Green, for the council, submits that the proposal should not be approved because the development is reliant on the restriction of persons who will be offered accommodation in the boarding house and that this issue is a fundamental principle for consent to be granted. If that provision cannot be met, he says it must fail as the site is in an area where you can't get it wrong. The Proposed Limitations on Occupancy 1. The agreement of the social planners that the development ought be approved is on the basis of restricting residency of the development to people who earn a minimum wage of $43,340 per annum and are not in receipt of income support payment from the Commonwealth Government or who are students at local tertiary establishments. Whilst the issue of discrimination on the basis of disability and the fact that the condition may be contrary to Disability legislation was discussed during the hearing, the parties did not consider the general application of this constraint. 2. For that reason, the parties were asked to provide the Court with written submissions that address the reasonableness of the proposed condition, particularly having regard to the tests in Newbury Council v Secretary of State for the Environment NDSC [1981] [AC578]. 3. The ability of a consent authority to impose conditions is found at s80A of the Environmental Planning and Assessment Act 1979 (EP&AAct 1979). The tests in Newbury require a condition to be for a planning purpose, to relate to the permitted development and to be not so unreasonable that no reasonable planning authority would impose it. 4. The proposed eligibility criteria, to be introduced thought the POM and adopted as a condition of consent has a purpose of avoiding the proposed development providing social housing or for very low to low income housing. That is because the social planning experts have agreed that the extent of reported existing anti-social behaviour indicates that the current levels of social housing has reached it maximum threshold in this locality. In addition, they agree that the addition of further social housing has the potential to add negatively to the existing cumulative impact in this residential area, including a disproportionate number of people in the locality who are socially and financially disadvantaged. Consistent with the planning principles in Renaldo Plus 3 Pty Limited v Hurstville City Council [2005] NSWLEC 315 and more recently in the review of planning principles by the Court in Amazonia v City of Sydney [2014] NSWLEC 1247, the POM requires absolute compliance to achieve an acceptable outcome for the proposal. 5. In determining whether the proposed condition is for a planning purpose and not for any ulterior purpose, I have regard to the consideration of McHugh J in Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 where he states a planning purpose is one that implements a planning policy whose scope is ascertained by reference to the legislation that confers planning functions on the authority, not by reference to some preconceived general notion of what constitutes planning. 6. The applicant relies on the provisions of SEPPARH and the aims of that policy are: (a) to provide a consistent planning regime for the provision of affordable rental housing, (b) to facilitate the effective delivery of new affordable rental housing by providing incentives by way of expanded zoning permissibility, floor space ratio bonuses and non-discretionary development standards, (c) to facilitate the retention and mitigate the loss of existing affordable rental housing, (d) to employ a balanced approach between obligations for retaining and mitigating the loss of existing affordable rental housing, and incentives for the development of new affordable rental housing, (e) to facilitate an expanded role for not-for-profit-providers of affordable rental housing, (f) to support local business centres by providing affordable rental housing for workers close to places of work, (g) to facilitate the development of housing for the homeless and other disadvantaged people who may require support services, including group homes and supportive accommodation. 1. The policy adopts the same definition of affordable housing as that contained in the EP&AAct, that is housing for very low income households, low income households or moderate income households, being such households as are prescribed by the regulations or as are provided for in an environmental planning instrument. 2. The policy seeks to provide housing to income groups ranging from very low to moderate rather than exclude two of the three groups. I do not consider that the exclusion of those groups is for a proper planning purpose, rather, it is to seek to address the social impacts that have been identified. 3. There is no dispute that the condition would fair and reasonably relate to the development proposed. 4. The third test in Newbury requires that the eligibility criterion should not be so unacceptably unreasonable that no reasonable planning authority would impose it. The proposed condition intends to exclude a large range of persons who may be seeking affordable housing. Mr McKee, for the applicant, submits that, if the Court were concerned the condition breached disability provisions, the words "and persons on any type of disability pension" could be added. I am not satisfied that this addressed the issue of reasonableness. Conclusion and findings 1. There is no dispute that the proposal is fully compliant with the standards for boarding houses in Division 3 of SEPPARH. Parking complies with the provisions of clause 29(2)(e) and therefore, consent cannot be refused on the basis of parking or other design issues in that division. 2. The other contentions in the case, apart from the social impact have been resolved through the changes to the plans and the POM. The experts agree that the changes made to the plans and POM would ensure that the development would not contribute to the locational disadvantage of the area provided the income limits were imposed. In the event that the Court found the condition could be imposed, the evidence is that the development proposes the provision of a type of housing that is currently not represented in the area. The boarding house would contribute to the range of housing provided in the locality and introduce moderate income earners. The site is well located to public transport and employment opportunities, particularly those which employ key workers such as Sutherland Hospital, Kareena Private Hospital, schools and emergency services. Proximity to the regional shopping centre would also be a likely source of employment according to the social planning evidence. 3. The application is for the development of a boarding house. It is not unusual for a POM to be required in association with such a use however, in this instance, the applicant relies on the inclusion of limitations as to the range of persons who will be accommodated within that boarding house. The proposal is to restrict occupancy, through the POM, that the accommodation is only offered to persons who earn a particular income or are students enrolled at nearby educational institutes such as Gymea TAFE. Specifically excluded would be people who are in receipt of an income support payment. This is to ensure, on the evidence of the social planners, that the boarding house will introduce moderate income earners to the area and ensure positive social outcomes. The setting of a minimum rental would also ensure that tenants are not placed in housing stress. 4. Whereas, I accept that these conclusions may be a way of addressing potential adverse social impacts, I do not accept that the proposed condition that is required to ensure the outcomes envisaged can be reasonably imposed nor is it for a planning purposes for the reasons outlined above. I would only accept that it would be appropriate to set a maximum, rather than minimum income level so as to ensure the housing would deliver the aims of SEPPARH as to do so would be for a planning purpose, that is to deliver the objects of that policy. That is not what is proposed, it is the converse and I do not consider that it would be a reasonable condition to impose. 5. For that reason, I am not satisfied, having regard to the evidence, that the site is suitable for the proposed development. 6. The Orders of the Court are: 1. The appeal is dismissed. 2. Development Application DA13/0763 for the demolition of two existing dwellings and construction of a two storey boarding house containing 22 rooms, one of which is to be a manager's room, and associated facilities at Nos 58 and 60 Karimbla Road, Miranda is refused consent. 3. The exhibits, other than exhibits A and 1, are returned. _____________ Sue Morris Commissioner of the Court ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 April 2015