Bradley & Anor v Manly Council & Anor
[2007] NSWLEC 491
•10 August 2007
Land and Environment Court
of New South Wales
CITATION: Bradley & Anor v Manly Council & Anor [2007] NSWLEC 491 PARTIES: APPLICANTS:
Gavin James Bradley and Sharyn Margery BradleyFIRST RESPONDENT:
SECOND RESPONDENT:
Manly Council
Director General of the Department of PlanningFILE NUMBER(S): 10859 of 2006 CORAM: Lloyd J KEY ISSUES: Development Application :- appeal - lodging house - residential dwelling - absence of concurrence - availability of sufficient comparable accommodation - financial viability - impact upon the stock of boarding house accommodation - room sizes for boarding houses - social and economic effects on the general community LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 79C
Land and Environment Court Act 1979 s 38(6)
Local Government Act 1919 Part XI
Public Health Act 1991
Public Health (General) Regulation 2002 cl 22(1)
State Environmental Planning Policy No. 10 - Retention of Low-Cost Rental Accommodation cl 7
Manly Local Environmental Plan 1988CASES CITED: BGP Properties Pty Ltd v Lake Macquarie City Council (2004) 138 LGERA 237;
Carstens v Pittwater Council (1999) 111 LGERA 1DATES OF HEARING: 23/05/07; 24/05/2007 and 25/05/2007
DATE OF JUDGMENT:
10 August 2007LEGAL REPRESENTATIVES: APPLICANTS:
A E Galasso SC
SOLICITORS:
DeaconsFIRST RESPONDENT:
SECOND RESPONDENT:
P C Tomasetti (barrister)
SOLICITORS
Pike Pike & Fenwick
C J Leggat SC
SOLICITOR:
Christine Hanson
Department of Planning
JUDGMENT:
IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES
Lloyd J
Friday, 10 August 2007
LEC No. 10859 of 2006
JUDGMENTBradley & Anor v Manly Council & Anor [2007] NSWLEC 491
1 HIS HONOUR: The property at No. 51 Wood Street, Manly contains a Late Victorian two-storey masonry dwelling constructed around 1891. The dwelling is identified as an item of environmental heritage with local significance although no issues were raised in relation to the impact on the heritage significance of the dwelling. Over time the dwelling has been adapted and used as a private hospital, boarding house and a short-term budget guesthouse. The guesthouse provided, at low cost, a right to occupy a room with shared facilities, such as communal kitchen, bathrooms, laundry and other conveniences. The building is, however, unoccupied at present and has been unoccupied for some time.
Background facts
2 On or about 26 June 1984, Manly Council granted development consent for the use of the building as a “lodging house”, subject to a number of conditions. Condition 8 states:
- Compliance with any further conditions of Council’s Health and Building Surveyor pertaining to those matters contained in Part XI of the Local Government Act [1919] or any Ordinance made thereunder.
3 On the same date, 26 June 1984, the council granted building approval under Part XI of the Local Government Act 1919 for alterations and additions to the subject building for use as a lodging house, subject to conditions. Conditions 15 of the building approval states:
(ii) The premises may be licensed to accommodate 18 boarders and lodgers, however, this will be subject to compliance with other requirements contained in this approval, and consideration of the licence application.(i) An application for a licence pursuant to the provisions of Ordinance 42 (Boarding Houses and Houses let in Longings) being submitted to Council on completion of the alterations, and such licence being obtained prior to occupation of the premises.
4 On around 19 November 2004, the owners, Mr Gavin James Bradley and Mrs Sharyn Margery Bradley, applied to the council for development consent to change the use of the existing building from a “lodging house” to two residential dwellings, together with associated demolition and construction works. The proposed use is permissible with consent within Zone No. 2 Residential Zone of Manly Local Environmental Plan 1988.
5 The council referred the application to the Department of Infrastructure, Planning and Natural Resources (as it was then called) for the concurrence of the Director-General of that Department in accordance with the provisions of State Environmental Planning Policy No. 10 – Retention of Low-Cost Rental Accommodation (“SEPP No. 10”). The Director-General refused to grant concurrence. The council subsequently refused consent to the development application for several reasons, including the absence of the concurrence of the Director-General.
6 The appeal to this Court raises three issues for determination:
(i) Whether SEPP No. 10 applies to the development. This issue raises the question of whether the use of the building is a “ boarding house ” as defined by SEPP No. 10. If not, SEPP No. 10 does not apply.
(iii) Issues raised by objectors.(ii) If SEPP No. 10 does apply, whether the development should be approved having regard to the provisions of that Policy; and
7 In stating these issues, I also note that the council initially raised a number of additional merit considerations which have been resolved through amendments to the development proposal. Consequently, no evidence was required from the Court appointed town planner Mr Lyndsay Fletcher.
8 For the purposes of resolving this appeal the Court, with the consent of the parties, is prepared to assume, without deciding the question, that SEPP No. 10 applies. That is, a finding that the development is acceptable in applying SEPP No. 10 would make the question of whether that Policy applies at all essentially redundant.
Objectors’ evidence
9 An inspection of the site and of two adjoining properties was undertaken on the afternoon of the first day of the hearing with representatives of the parties. Two objectors, Ms Loretta Reilly of 2/49 Wood Street and Ms Nancy Pageau of 20 Marshall Street, gave evidence on that occasion.
10 Ms Reilly is concerned about the proximity of the proposed kitchen area to her bedroom together with associated noise, odour and loss of privacy. She tends, however, to exaggerate her concerns, referring to toxic fumes from the kitchen. The only fumes of which I am aware that emanate from domestic kitchens, if any, are not toxic and are generally inoffensive. Ms Reilly’s concerns about privacy have been met by the provision of fixed opaque glass in the lower half of the kitchen windows. With the benefit of the site view I am satisfied that any impacts from the kitchen are not such as to warrant refusal of the development application.
11 Ms Reilly’s other concerns relate to the fact that there is a proposed swimming pool near her property boundary, the excavation for which would interfere with the roots of two trees which, she says, would probably be destroyed. She is also concerned about the construction of a swimming pool at a time of severe water restrictions.
12 There is, however, no expert evidence to support Ms Reilly’s concerns about the continued vitality of the trees. And her concern about water restrictions overlooks the fact that a large rainwater storage tank is to be provided as part of the development as required by a condition of the consent. It follows that I am not satisfied that her concerns are justified.
13 Ms Pageau is concerned about the potential of being overlooked and the loss of her present leafy outlook. I note, however, that the potential for overlooking is from windows that are set back almost seven metres from the boundary and the only window of concern is a window which will have opaque glass. I am thus not satisfied that the potential for overlooking would warrant a refusal of the development application. Ms Pageau’s concern about the removal of a tree to make way for the proposed garages is met by the proposal to have even more dense planting along the boundary to the development site. These concerns do no warrant refusal.
- The relevant provisions
14 The relevant provisions of SEPP No. 10 are set out in cl 7. Subclause 7(1) relevantly states that a person must not alter or add to the structure or fabric of a boarding house without development consent and must not change the use of a boarding house to another use without consent. Subclause 7(3) states that a council may not give development consent referred to in sub-cl 7(1) except with the prior concurrence of the Director-General.
15 Subclause 7(4) sets out the matters to be considered by the consent authority in determining a development application to which the Policy applies. It should be noted, however, that the matters for consideration do not exclude a consideration of any other or additional matters, which may be relevant to the application. Subclause 7(4) states:
- (4) In determining a development application required by this clause, the council is, in accordance with the guidelines, to consider the following in each case:
- (a) whether there is likely to be a major reduction in the number of households or units of low-rental accommodation on the land to which the application relates,
- (b) whether there is available sufficient comparable accommodation in the locality to satisfy the demand for such accommodation in that locality,
- (c) whether the development, if carried out, is likely to cause adverse social and economic effects on the general community,
- (d) whether adequate arrangements have been made to assist the residents (if any) of the building likely to be displaced to find alternative comparable accommodation in the locality,
- (e) whether the cumulative impact of the loss of low-rental residential accommodation in the council’s area will result in a significant reduction in the stock of that accommodation,
- (f) the structural soundness of the building, the extent to which the building complies with any relevant fire safety requirements and the estimated cost of carrying out work necessary to ensure the structural soundness of the building and the compliance of the building with the fire safety requirements.
16 The matters to be taken into consideration under sub-cl 7(4) of SEPP No. 10 are to be considered in accordance with the “guidelines”. The “guidelines” are defined to mean guidelines issued from time to time by the Director- General. Subclause (4)(f) was not in issue between the parties.
17 Subclause 7(5) of SEPP No. 10 specifies means of considering whether sufficient comparable accommodation is available for the purposes of sub-sub-cl (4)(b).
18 Subclauses (7), (8) and (9) of cl 7 set out the matters to be considered by the Director-General (or in this case the Court) in deciding whether to refuse or to grant concurrence. Subclause 7(7) states:
- (7) In deciding whether to grant concurrence under this clause, the Director-General must take into consideration:
- (a) in each case, the matters specified in subclause (4), and
- (b) in addition, in the case of a boarding-house, the financial viability of the continued use of the boarding-house, as determined by the Director-General in accordance with the guidelines.
19 Under sub-cl 7(8) the Director-General must refuse to grant concurrence if the cumulative impact of the continued loss of low-rental residential accommodation in the council area will result in a significant reduction in the stock of an accommodation.
20 Subclause 7(9)(b) states that, despite sub-cl 7(8), the Director-General may grant concurrence if the building cannot continue to be used for low-cost rental accommodation because it is not financially viable.
21 I have previously noted that in this case the Director-General refused concurrence. The Court may nevertheless, in this appeal, determine the appeal even though concurrence has not been granted: s 39(6), Land and Environment Court Act 1979. The considerations include the financial viability of the continued use of the boarding house as determined by the Director-General in accordance with the guidelines. The guidelines themselves contain detailed provisions for assessing the financial viability, inter alia, of boarding houses.
The evidence – matters for consideration in cl 7(4) of SEPP No. 10
22 Mr Ross Butler, a town planner, provided evidence for the Director-General and Mr Charles Hill, a town planner, provided evidence for the applicants. The council relied on the evidence of Mr Butler.
(a) whether there is likely to be a major reduction in the number of households or units of low-rental accommodation on the land to which the application relates
23 Mr Butler states that the approval would result in the loss of all 18 approved rooms. He describes this as a significant reduction in the amount of lawful low cost accommodation on the site.
24 Mr Hill states that the existing 18 rooms are limited in size, varying in area from 7.1 sq m to 25.2 sq m and having a median size of 9.8 sq m and an average of 11 sq m. He notes that neither the council nor the Department of Housing provide boarding house design guidelines. Using guidelines from the City of Sydney that require a minimum area of 10.5 sq m per person, Mr Hill calculates that only six existing rooms would satisfy this requirement.
(b) whether there is available sufficient comparable accommodation in the locality to satisfy the demand for such accommodation in that locality
25 Mr Butler states that the development application was submitted in November 2004 (the December quarter) and based on Sydney private rental vacancy rate published by the Real Estate Institute of New South Wales the preceding quarter had a rental vacancy rate of 3.4 per cent. While this satisfies the requirements in sub-cl (5) it does not address the serious imbalance between supply and demand that currently exists with a current rental vacancy rate of 1.4 per cent.
26 Mr Hill states that in accordance with sub-cl (5) there was a rental vacancy rate of 3.4 per cent, based on the guidelines it must be assumed that there is sufficient comparable accommodation in the area to mitigate the impact of the development on the demand for such accommodation.
(c) whether the development, if carried out, is likely to cause adverse social and economic effects on the general community
27 Mr Butler identifies the following socio economic effects associated with loss of low rental accommodation:
· social polarisation and displacement of residents,
· an increase in purchase/rental prices, often due to gentrification/restoration,
· increased competition for accommodation, and
· relocation of residents outside the locality.
28 In his assessment, Mr Butler concludes that the supply of comparable accommodation is extremely limited and people, on a daily basis, are unable to find boarding house accommodation. This has resulted in households being forced to move further away from the locality.
29 Mr Hill acknowledges that the loss of formal private rental accommodation can have adverse social and economic impacts. However, as the existing building was originally approved as a lodging house, no medium term, long-term or permanent accommodation was provided for low income tenants.
(d) whether adequate arrangements have been made to assist the residents (if any) of the building likely to be displaced to find alternative comparable accommodation in the locality
30 Mr Butler and Mr Hill acknowledge that no persons are to be displaced as a result of the proposed development as the building has been vacant for a considerable time.
(e) whether the cumulative impact of the loss of low-rental residential accommodation in the council’s area will result in a significant reduction in the stock of that accommodation
31 Mr Butler states that his research identifies 23 buildings that have in the past been used as boarding/lodging house accommodation in the mid to late 1990s. These buildings provided 895 approved bed spaces in the Manly locality. However, at present only 124 remain (including the site). This represents a loss of 85 per cent and the removal of 19 bed spaces would represent a loss of 15 per cent of the current available stock. On this basis, the cumulative impact of loss of boarding house accommodation will result in a significant reduction in the stock of that accommodation
32 Mr Hill notes that the current consent for the site did not limit the type of guests (transient or permanent) nor the time in which they could stay in the premises. The accommodation mostly provided short-term accommodation, which is not included under the provisions of SEPP No 10. For this reason the proposed conversion will not have a significant impact upon the stock of boarding house accommodation in Manly. For the same reasons, there can be no undesirable precedent.
The evidence – financial viability
The council’s evidence
33 Mr Butler provides three different scenarios to calculate the financial viability. These are:
· Scenario 1 is based on 34 bed spaces as shown as existing on the plans and operating expenses submitted with the developed development application. The financial viability is 8.3%.
· Scenario 2 is based on 27 bed spaces as shown as existing on the plans and operating expenses submitted with the developed development application. The financial viability is 6.6%.
· Scenario 3 is based on an assumed 27 bed spaces. All input values with the exception of operating expenses are assumed to be the same as in Scenario 2. The financial viability is 6.2%.
34 In adopting bed spaces greater than the 18 beds shown in condition 15 of the council approval of 26 June 1984, Mr Butler relies on the guidelines that state:
- If a boarding house is assessed as financially non-viable, the Department will then consider whether upgrading the boarding house will make it financially viable. Upgrading a boarding house could increase its viability by decreasing maintenance costs, increasing the number of rooms or increasing rents (within the low rental bracket)
35 As the council has no requirements for room sizes for boarding houses, Mr Butler relies on the provisions of the Public Health Act 1991 and the Public Health (General) Regulation 2002 (“the Public Health Regulation”). Clause 22(1) of the Public Health Regulation states:
- 22 Sleeping rooms
(1) The occupier of premises must not allow any room or cubicle within the premises to be used for the purposes of sleeping accommodation unless:
- (a) the room or cubicle has a floor area of 5.5 square metres or more for each person sleeping in it (in the case of long-term sleeping accommodation) or 2 square metres or more for each person sleeping in it (in any other case), or
- (b) the room or cubicle has been exempted by the Minister under subclause (2) and complies with any conditions attached to the exemption, or
- (c) the premises are private domestic premises.
- ….
36 For Scenario 1, and using the requirement of 5.5 sq m in cl 22(1) of the Public Health Regulation, Mr Butler calculates that 34 persons can be accommodated within the building if the existing walls between rooms are modified and optimally located. For Scenarios 2 and 3, and still using the requirement of 5.5 sq m in cl 22(1) of the Public Health Regulation, Mr Butler calculates that 27 persons can be accommodated in the building taking into account the available area in each of the existing rooms (without modifying the location of existing internal walls). Mr Butler acknowledges that development consent would be required from the council for an increase in bed numbers to 27 or 34. In this regard, he prepared an assessment based on s 79C of the Environmental Planning and Assessment Act 1979 (“the EP&A Act”) and concluded that "it is reasonable to expect that Manly Council would be position to approve a development application".
37 At the request of the Court, Mr Butler provided calculations for financial viability using 18 beds. The financial viability was calculated at 6.1 per cent (Scenario 4). Mr Butler also calculated the financial viability for 19 beds. The financial viability was calculated at 6.5 per cent (Scenario 5).
The applicants’ evidence
38 Mr Hill uses 18 beds as the basis for his assessment of financial viability. The financial viability was calculated at 3.3 per cent by Mr Hill and based on this assessment the operation of the building as a boarding house is not viable.
39 He rejects the approach taken by Mr Butler in considering the financial viability at an occupancy rate greater than the 18 persons as no approval has been granted for 19, 27 or 34 persons on the site.
- Findings
40 The assessment of financial viability under the guidelines issued by the Director-General is based on rental yield. The guidelines provide that the continued use of a boarding house is considered to be financially viable if the annual income, less expenses, is greater than six per cent of the current investment value of the boarding house.
41 The guidelines provide the following formula for determining financial viability:
Y – E - d > 6 %
- where:
Y = Rental income
E = Expenses
d = Annual depreciation
V = Current investment value
U = Capital upgrading
42 Mr Butler and Mr Hill provide different input data for the financial viability equation. The difference in some data is not significant and does not overly impact on the results. Some data, however, is the source of considerable differences between Mr Butler and Mr Hill. The main areas of difference in data relate to rental income, expenses and capital upgrading costs.
- Y (Rental income)
43 The differences in rental income relate to the number of beds and the vacancy rate. On the number of beds, Mr Butler adopted a high number of beds (27 or 34) largely based on the size of the building, the 5.5 sq m requirement in the Public Health Regulation and the potential for additional beds. Mr Hill, on the other hand adopts the approved number of beds (or boarders or lodgers as described in the approval).
44 In considering the different evidence, I can comfortably conclude that the approach adopted by Mr Hill should be accepted for a number of reasons. Firstly, I am not satisfied that the higher number of beds suggested by Mr Butler can be relied upon without a development consent from the council. The uncertainty of gaining consent makes any reliance on the higher number of beds in this application unrealistic. Notwithstanding Mr Butler’s evidence, it would be surprising if there were not considerable public opposition to a development application to increase the number of beds. The assessment based on s 79C of the EP&A Act by Mr Butler lacks rigour and should not be given any weight.
45 Secondly, I do not accept that the 5.5 sq m requirement in the Pubic Health Regulation is an appropriate standard for assessing an appropriate size for accommodation in a boarding house. It was unclear as to the background and appropriateness of the requirement for a boarding house in the context of the Public Health Regulation. In my view, and in the absence of any relevant requirements from the council, greater weight must be give the requirements for similar boarding houses from other local government areas, if only as a guide. This was the approach adopted by Mr Hill and it highlights the large disparity between the Public Health Regulation and the requirements of other local government areas, with the City of Sydney requiring 10.5 sq m for a single room and 16 sq m for a double room and Waverley Council requiring 18 sq m for single room. Mr Hill also notes that the Building Code of Australia, which has statutory force, requires 15 sq m for single room. If an application was now to be made to the council to increase the number of persons to be accommodated then the 15 sq m standard would be applied.
46 Thirdly, the assessment by Mr Butler in rigidly applying the 5.5 sq m requirement in the Public Health Regulation has no regard to the potential amenity impacts for future occupiers as many of the rooms are irregularly shaped and provide little useable space because of their irregular form despite satisfying the 5.5 sq m requirement in the Public Health Regulation.
47 Fourthly, only Scenario 4 of the five different scenarios prepared by Mr Butler is arguably valid. I have previously dealt with Scenarios 1, 2 and 3: see par [33] above. Scenario 5 uses 19 beds for the assessment of financial viability. This scenario must also must be rejected for the same reasons as Scenarios 1, 2 and 3; being inconsistent with the approval granted by the council on 26 June 1984. While an additional area was approved at this time, it was a designated as a caretaker’s residence and as such was not part of the approved 18 beds for boarders and lodgers.
48 For these reasons, I am not satisfied that the opportunity provided in the guidelines that provide for the upgrading the boarding house to make it financially viable are available in this case. This is reinforced by the fact that the council itself has imposed a ceiling of 18 boarders or lodgers to be accommodated in the building.
49 The issue of vacancy rate is addressed as part of the consideration of cl 7(4)(b): see par [25] above. For the purposes of establishing financial viability Mr Butler again uses a vacancy rate of 1.4 per cent. Mr Hill uses the Sydney private rental vacancy rate published by the Real Estate Institute of New South Wales for the quarter preceding the lodgement of the development application in accordance with sub-cl 7(5) of SEPP No. 10. This quarter had a rental vacancy rate of 3.4 per cent. For the reasons set out in par [26] above Mr Hill’s vacancy rate should be adopted.
- E (Expenses)
50 Mr Hill adopts a figure of 30 per cent of rental income as expenses. This was also a figure adopted by Mr Butler for his original assessment (November 2005) and Scenarios 1, 2 and 3. Mr Butler curiously (and even acknowledging that the 30 per cent figure represents a realistic maximum industry standard in his evidence) adopts a figure of 15 per cent of rental income as expenses for Scenarios 4 and 5. In the absence of any compelling reason why the figure of 15 per cent should be adopted, I propose to calculate expenses at 30 per cent of rental income.
- U (Upgrading costs)
51 Mr Butler states that the building was used as a guesthouse and was in good repair. On this basis, it would be reasonable to assume that the building would be of quality sufficient for use as a boarding house. Considering that additional parking may be required on-site and partial removal of the existing garage would be required, Mr Butler allows $10,000 for this purpose.
52 Mr Butler further states that the Department of Housing has a Boarding House Financial Assistant Program where by up to $50,000 can be made available for essential upgrades.
53 Mr Hill on the other hand, identifies necessary capital works in the order of $185,435. These works include rewiring, removal of asbestos, repairs to caretaker’s quarters, repairs to the garage, new fire resistant egress stairs and removal of concrete cancer. The required capital works identified by Mr Hill were observed on the site view.
54 The guidelines provide that not all works are appropriate for inclusion as upgrading costs. Expenditure on construction and structure can be included, whereas work of a non-essential or cosmetic nature, including repairs, maintenance and fit out will not normally accepted.
55 The items identified by Mr Hill reasonably relate to the enhancement of the value of the property rather than the preservation of the value of the property and as such are appropriate for inclusion as upgrading costs. However, for reasons mentioned in the following paragraphs a determination of an appropriate level of upgrading costs is not critical in determining the financial viability of the building as a boarding house.
56 I have not give any weight to the potential availability of grants from the Department of Housing’s Boarding House Financial Assistant Program as little evidence was provided on the likelihood of such a grant being provided for the site. The high level of uncertainty militates against any reliance on this source of funds.
57 Using the formula for determining financial viability and adopting a conservative approach by using all Mr Butlers figures in Scenario 4, except for the number of beds (18), vacancy rate (3.4 per cent) and expenses (30 per cent), the rental yield is 5.1 per cent. If Mr Hill’s upgrading costs are included in place of Mr Butlers upgrading costs, then the rental yield is further reduced to 4.6 per cent.
58 Based on the requirements in SEPP No 10 and the guidelines, I find that the use of the building as a boarding house is not financially viable.
59 The Court is also required to consider the matters in sub-cl 7(4).
(a) whether there is likely to be a major reduction in the number of households or units of low-rental accommodation on the land to which the application relates
60 The proposal will result in a total loss of the existing units of low-rental accommodation on the site, which could only be described as a significant reduction.
(b) whether there is available sufficient comparable accommodation in the locality to satisfy the demand for such accommodation in the locality
61 Subclause 7(5) stated that for the purpose of sub-cl(4)(b), sufficient comparable accommodation is conclusively taken to be not available in the locality if the vacancy rate in private rental accommodation for Sydney as published by the Real Estate Institute of New South Wales is, for the quarter immediately preceding the date of lodgement of the development application, less than three per cent.
62 The development application was, as previously noted, submitted in November 2004 (the December quarter) and the relevant vacancy rate published by the Real Estate Institute for the preceding quarter was 3.4 per cent.
63 I observe that this sub-cl overlaps the considerations under sub-cl (4)(e) which is discussed below.
(c) whether the development, if carried out, is likely to cause adverse social and economic effects on the general community
64 I have noted in pars [27] to [29] above the expert evidence on this question. The current consent for the building allows its use as a “lodging house”. “Lodging house” denotes short-term accommodation as opposed to long-term or permanent accommodation. The loss of short-term accommodation for 18 persons as approved by the council would have, in my opinion, only a marginal social and economic effect on the general community. That is, I accept the opinion of Mr Hill on this question, noted in par [29] above.
(d) whether adequate arrangements have been made to assist the residents (if any) of the building likely to be displaced to find alternative comparable accommodation in the locality
65 As noted in par [31] above, this consideration is not relevant since the building has for some time been vacant.
(e) whether the cumulative impact of the loss of low-rental residential accommodation in the council’s area will result in a significant reduction in the stock of that accommodation
66 I have noted in par [31] and [32] above the expert evidence including the availability of comparable accommodation in the Manly local government area – the proposal will represent a loss of about 15 per cent of the current available stock. As noted by Mr Hill, however, the current consent is for short-term accommodation (a “lodging house”) more akin to back-packer accommodation although the term lodging house may include the accommodation of persons who are not back-packers. The estimate of 15 per cent of the loss of current available stock is an estimate on the total available accommodation, including boarding houses. It follows that the actual loss of pure boarding house accommodation would be somewhat less than 15 per cent. I do not regard this loss as being necessarily significant, but even if it is significant, it is outweighed by the consideration of financial viability.
(f) The structural soundness of the building
67 I have referred in par [53] above to the estimated costs of upgrading the building, which include such essential items as rewiring, removal of asbestos, new fire resistant egress stairs and removal of concrete cancer. If these costs are included in calculating the financial viability of the continued operation as a lodging house, the rental yield is, as noted in par [57] above, only 4.6 per cent.
Conclusion
68 The considerations listed under sub-cl 7(4) are not determinative. They must be balanced against the other considerations in the policy and the general considerations under s 79C(1) of the EP&A Act. Those considerations include the objects of the Act (s 5, Carstens v Pittwater Council (1999) 111 LGERA 1 at [20] – [26], BGP Properties Pty Ltd v Lake Macquarie City Council (2004) 138 LGERA 237 at [100] – [104]). One of those objects is to encourage “the promotion and co-ordination of the orderly and economic use and development of land.” Once a matter is a relevant consideration it is then a question for the decision-maker to determine what weight should be given to it. In my opinion, it would be unrealistic and contrary to the objectives of the Act to which I have referred to require an owner of a property to put it to an uneconomic use. If the continued use of the subject building for its approved use as a lodging house were financially viable then, in view of the considerations under sub-cl 7(4) of the Policy, I might have been inclined to refuse the present application. But the fact that the continued use of the building is not financially viable leads me to the conclusion that determining weight should be given to the objective of the promotion of the orderly and economic use of land – in this case the optimum use of the land consistent with its zoning. There being no general merit considerations which might justify a refusal of the application, the appeal is allowed and development consent is granted to the applicants’ development application, subject to conditions.
69 Two conditions are disputed. The first is framed as a recommendation relating to the keeping of domestic cat/s and dog/s. There was no evidence to support the imposition of such a condition, which in any event is framed only as a recommendation and is unenforceable. It has been deleted. The second condition imposes a limitation on the use of the property for holiday letting. Again, there was no evidence to support the imposition of such a condition and it, too, is deleted.
70 One condition – condition 21 – agreed to by the parties has been amended by the Court, to require the provision of a rainwater tank (or tanks) for the collection of all roof water, to be used for all bathroom and laundry fittings and all external and garden taps. This should be a standard requirement on all new developments as well as alterations and additions to existing developments.
71 A further condition has been added by the Court requiring the window to the upper level bathroom at the eastern elevation to be provided with obscure glass. This condition is imposed to meet the objection of the owner of the adjoining property about the potential for overlooking.
72 Finally I acknowledge the assistance of Commissioner G T Brown, who heard the case with me.
Orders
73 The orders are:
- (1) The appeal is allowed.
(2) Development application No. 538/04 for alterations and additions to the existing lodging house at No. 51 Wood Street, Manly and conversion to two residential dwelling is granted development consent subject to the conditions annexed to these orders.
(3) The exhibits may be returned, except for exhibits A, 1 and 2.
The consequence of the Court’s decision in this appeal is the grant of development consent subject to detailed conditions. These conditions are not reproduced as part of this decision but are available for inspection at the Council. In addition, a copy the Court’s Orders and the conditions may be obtained from the Court’s registry upon payment of a fee. Details of the fee payable and process for obtaining a copy of the Orders and conditions are available on the Court’s web site at
I hereby certify that the preceding 73 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.
Dated: 10 August 2007Associate
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