Local Representation Advisory Committee Leichhardt
2 August 2016
Item No: LL0816 Item 5
Subject: Affordable Housing over Hay Street Car Park, Leichhardt
File Ref: 16/6014/85269.16
Prepared By: Lyn Gerathy - Manager Property and Commercial Services, Leichhardt
Authorised By: Matthew Phillips - Director, Corporate Services
Leichhardt Council resolved, amongst other things, that in consultation with the registered housing provider, a PRE-DA be prepared for affordable and other housing over the Hay Street car park. Expressions of Interest were invited. The selection of a preferred housing provider became urgent in order to allow it to include this project in its tender for the $1 billion NSW State Government Social and Affordable Housing Fund. This report outlines the current position and proposed future actions.
THAT LRAC note the following recommendations proposed to be put to Council;
1. That the report be received and noted.
2. That Council pursue the acquisition of Lot 3 DP227326 from Ausgrid subject to the price being reasonable (as determined by an independent valuation), noting that a new kiosk substation will be included elsewhere on the car park site as part of the affordable housing development.
3. That Council enter into discussions with owners of properties fronting Parramatta Road and adjacent to the car park about the possibility of granting rights of way, for market value to those properties, provided that this does not adversely affect the proposed affordable housing development on the Hay Street car park.
4. That Council apply for possessory title of the strip of land known as Chancery Lane which is incorporated into the car park.
On 24 November 2015, Leichhardt Council resolved (C598/15):
1. Notes that clause 1.9A of Leichhardt Local Environment Plan 2013, permitted by section 28 of the Environmental Planning and Assessment Act 1979, provides that a covenant does not apply to the extent necessary for the purpose of allowing development on any land in any zone in accordance with the LEP.
2. Commence discussions with registered community housing providers about an Agreement for Lease and Development Deed permitting the construction and sub-lease of affordable housing above the Hay Street Car Park in Leichhardt.
3. Following discussions and in consultation with the community housing provider, appoint an architect to prepare broad concept plans and an external traffic engineer to provide parking advice and traffic impacts, and lodge a Pre-DA for supported housing, affordable housing for key workers and community housing above the ground level Hay Street car park.
4 Receive a further report after receipt of the Pre-DA advice and the reviewed discussion paper in accordance with Resolution C426/15 with recommendations on the type of affordable, supported and community housing and a list of possible registered community housing providers for this site.
5. Consider utilising the affordable housing fund for this project.
In this report, “affordable housing” is usually a generic term to cover social, affordable, key worker, supported living, below market, and other subsidised housing.
The granting of a lease of the airspace and ancillary rights rent-free is a valuable financial contribution by Council to the project but does not require any cash expenditure by Council.
It is recommended that the (Leichhardt) Affordable Housing Fund, currently approximately $700,000, be used for this project which will deliver affordable dwellings.
Relocation of the substation, probably closer to the street boundary of the car park, and the investigation of the purchase of Ausgrid’s Lot 3 is recommended. Lot 3 has an area of 31.6m2 and has not yet been valued. The purchase can be funded from the Property Reserve. The dismantling of the current substation and the new kiosk substation would be paid for by the lessee as part of the building works.
There is a prospect of obtaining funds by formalising rights of way in favour of adjacent properties provided this does not adversely affect the development including the replacement public car park at ground level. It is recommended that any funding so received be applied to this project.
OTHER STAFF COMMENTS
The report writer, Manager Property and Commercial Services Leichhardt, has consulted and is working with:
· Acting Group Manager Community and Cultural Services Leichhardt / Team Leader, Community Planning and Development Leichhardt; and
· Affordable Housing Officer Marrickville
as well as the Manager and Team Leader Traffic Leichhardt, the Transport Planner Leichhardt, the Team Leader Strategic Planning Leichhardt and other officers.
In respect of paragraph 1 of resolution C589/15 of 24 November 2015, it is noted that clause 9 of the State Environmental Planning Policy (Affordable Rental Housing) 2009 (“SEPP”) also provides for the suspension of covenants for the purpose of enabling development in accordance with the SEPP.
In respect of paragraphs 2 and 3 of that Resolution, Expressions of Interest were invited from registered community housing providers interested in a long-term lease over the public car park in Hay Street, Leichhardt for construction and management by the Lessee of affordable housing and/or housing for key workers and/or supported living housing and/or social housing and/or community housing and/or other housing which fits Council’s strategic objectives and housing objectives.
The invitation for expressions of interest was emailed to the NSW Department of Family and Community Services and the NSW Housing Association with requests that it be circulated to housing providers. The invitation was also emailed directly to a number of specific registered housing providers as advised by Council’s Team Leader, Community Planning and Development Leichhardt.
Three Expressions of Interest were received.
All had their own architects and/or other consultants either in-house or externally who had undertaken preliminary investigations and design options. It was proposed to select one to be the community housing provider with whom to continue discussions and pursue the Pre-DA (paragraph 3 of the November resolution.) This would be the preferred provider for the lease if the initial arrangements and proposed designs were satisfactory.
All three advised that they were short-listed for the NSW State Government’s $1 billion Social and Affordable Housing Fund (“SAHF”). Each wanted to include this project in its tender or proposal for SAHF funding. The closing date for the SAHF tender was 3 August 2016, but to include this project, they needed agreement from Council and they needed to do a lot of financial modelling and obtain other reports and information to support the tender for SAHF funding for this project to maximise the chance of obtaining SAHF funding for the project.
This project can proceed without SAHF funding, but not having that funding would mean less social housing (at 30% of income for very low and low income households) and more other affordable housing (eg at a rent discounted from market for moderate income earners) and/or more likelihood of a need for some market rent to cross-subsidise and/or a longer head lease from Council and/or a lower quality building, to make the project financially feasible for the lessee housing provider.
It was considered important to try to obtain SAHF funding, but it meant that the selection of the preferred housing provider became urgent in order to meet the deadlines. The Interim General Manager under delegated authority approved:
1 Link Housing is the preferred housing provider for affordable housing over the Hay Street car park.
2 It is noted that this will allow Link Housing to include this project in its tender to the NSW Government Social and Affordable Housing Fund.
3 Council will work with Link Housing and its architects and planners on designs and a Pre-DA (as per paragraph 3 of resolution C598/15).
4 The Local Representation Advisory Committee Leichhardt be briefed.
Heads of Agreement were prepared to cover the initial period of the SAHF tender and the preparation of the preliminary designs and Pre-DA application; these are the binding parts of the Heads of Agreement. The heads of agreement also outline indicative terms and matters for negotiation for the development deed, agreement for lease, lease (including the required mix of types of housing) and other documents which are to be drafted by Council’s external solicitors and negotiated in this initial period but without binding the parties to proceed if it is not financially feasible or otherwise does not work out in this initial period.
Ausgrid owns a 31.6m2 lot within the carpark. It is towards the west side but not on the side boundary. It is surrounded by the car park site. The preferred housing provider enquired about relocating the substation as part of the development. This is a good idea. Preliminary discussions have commenced with Ausgrid which is investigating. A valuation would be obtained to inform the setting of the purchase price.
Parramatta Road properties
A DA has been lodged for 305-313 Parramatta Road, with 311-313 backing onto the driveway from Redmond Street to the main part of the car park. The DA for these Parramatta Road properties proposed dedicating part of the land to widen the “lane” which would then be the main pedestrian entry way to that development. However the driveway is not a public lane but a private lot, owned by Council and part of the car park site. The Assessors have other issues with the particular DA lodged, but there is merit in entering into discussions with the owners of these properties. Granting them a legal right of access can be valued having regard to the benefit to them and their proposed dedication to Council. Any funds obtained, in addition to the land dedication, can be applied to the affordable housing project.
There is another property, 315 Parramatta Road, which backs onto the main part of the car park. It is using the car park for rear access to park cars on its site. It is using the site of the right of way in favour of 325 Parramatta Road and a bit more, but 315 Parramatta does not have a registered right of way. Rear access to that property is likely to be valuable to it, especially as there have been indications of an intention to redevelop. The width, location and specific terms of the right of way would have to be negotiated. Provided it does not adversely affect the proposed affordable housing development, this may be a source of funds to apply to the affordable housing project. It is recommended that discussions be opened with the owners after preliminary investigation of the design of the affordable housing is advanced.
In the north-west of the car park is a strip of land called Chancery Lane in Council records. Despite that name, it is not a public lane. It is not constructed as a lane. Part of it is incorporated into the car park with bitumen, line marking, wheel stops etc. Part is a garden between the car park and the adjacent property.
As it has been taken over by Council and treated as Council property for at least 12 years, it is recommended that Council apply to Land and Property Information for title to be granted to Council on the basis of its possession.
This is similar to the application Council made for title to three blocks of Marlborough Lane. However, in the case of Chancery Lane, it would not be gazetted as a public road but would become part of the car park site.
Many terms are used in connection with “affordable housing” which are defined or used differently for different purposes and by different organisations. This leads to confusion.
A draft list of definitions has been prepared and is annexed as Attachment 1 to this Report. It is intended to reach an agreed list of definitions with sub-categories, and these will in due course be included in the long-term lease. This will provide clarity when specifying the mix of housing (although for a long-term lease, there will have to be provisions for changes, for example if there are changes to legislated definitions or how statistical data is provided.)
The following matters about the definitions are highlighted.
· Some of the words have been given the same definitions in Attachment 1 as in an Act or the SEPP or the LEP / Standard Instrument, although organisations do not always use these definitions. Some phrases in Attachment 1 are commonly used but are not defined in a planning instrument and are defined differently by different organisations. Except as set out in the following bullet point, in one sense it doesn’t matter what definitions are used for a project as long as the words are defined so that all parties have the same understanding.
· “Affordable Housing” is defined in Attachment 1 as in the Environmental Planning and Assessment Act, 1979 and the State Environmental Planning Policy (Affordable Rental Housing) 2009. At least 50% of the housing at Hay Street must be affordable housing within this definition to obtain the 0.5 extra FSR and other advantages under the SEPP.
· There can, and will be, sub-categories of affordable housing set out in the final list of definitions. One is social housing, as defined in Attachment 1. Others are to be worked out, for example moderate income earners (compared to very low and low income earners) and key workers who meet the income limits for affordable housing.
· Key workers will usually fit within the moderate income band for affordable housing. However, some key workers may earn more than the limit for affordable housing as defined but still be unable to afford to rent within this LGA. There is a definition of key worker housing which is to be at less than market rent, with the details to be agreed.
· “Supported living” is a term which has been used within Council but is not defined in the SEPP. It includes but is not limited to “supportive accommodation” which is defined in the SEPP.
Further work will be done on this as part of the process to determine the required mix of housing types in the development. This will involve the Local Representation Advisory Committee.
This project was supported by the former Leichhardt Council’s Housing Advisory Committee. It is referred to in the draft Housing Action Plan which was on public exhibition.
The project for affordable housing over the Hay Street Car Park has advanced with the selection of a preferred registered community housing provider who is including this project in its tender for funding from the $1 billion NSW State Government Social and Affordable Housing Fund and will work with Council to prepare a PRE-DA Application. There will be update reports to the Committee from time to time including after receipt of the Pre-DA advice in accordance with the resolution of November 2015.
Draft list of Definitions