Dimitri Dilles v Randwick City Council

Land and Environment Court (NSW)|2017-04-26

Judgment

COMMISSIONER: This is an appeal under s 97(1) of the Environmental Planning and Assessment Act 1979 (the Act) against the deemed refusal of a development application by Randwick City Council (the Council), for the demolition of an existing boarding house and construction of a residential flat building at 115 Dolphin Street, Coogee (the site).
The key issues contended were the impacts from overdevelopment of the site in terms of excess floor space and the lack of provision of any onsite parking. A secondary contention related to the loss of affordable housing given the removal of the boarding house.

The site and locality

The site is located on the northern side of Dolphin Street between Arden Street to the east and Hill Street to the west with Bream Street to the rear. It is located opposite Coogee Oval to the south and the access to a public car park adjoining the oval.
The site is regular in shape having a frontage of 9.57m to Dolphin Street, a width of 9.245m at the rear boundary and a depth of 33.5m with a total area of 335.1m². It has a slight fall of some 1.5m from the rear (northern) boundary to the front (southern) boundary. It currently contains a two storey boarding house with up to 12 approved rooms.
The site is in close proximity to Coogee Beach and the associated Coogee commercial centre on Coogee Bay Road.
The locality is characterised by a mixture of uses including Coogee Oval to the south but predominantly comprises residential development in the form of RFBs to the north, east and west.

Relevant Controls

The following controls are of relevance: 1. State Environmental Planning Policy No.65 (Design Quality of Residential Flat Development) (SEPP 65). 2. State Environmental Planning Policy (Affordable Rental Housing) (ARH SEPP). 3. State Environmental Planning Policy No 70 - Affordable Housing (Revised Schemes). 4. Randwick Local Environmental Plan 2012 (the LEP), specifically: 1. Clause 1.2 (Aims of the Plan) 2. Clause 2.3 (Zone objectives and Land Use Table) 3. Clause 4.4 (Floor Space Ratio) 4. Clause 4.5 (Calculation of floor space ratio and site area) 5. Clause 4.6 (Exceptions to development standards) 1. Randwick Development Control Plan 2013 (the DCP).
The relevant provisions of Clause 4.6 are as follows:

4.6 Exceptions to development standards (1) The objectives of this clause are as follows: (a) to provide an appropriate degree of flexibility in applying certain development standards to particular development, (b) to achieve better outcomes for and from development by allowing flexibility in particular circumstances. (2) Development consent may, subject to this clause, be granted for development even though the development would contravene a development standard imposed by this or any other environmental planning instrument. However, this clause does not apply to a development standard that is expressly excluded from the operation of this clause. (3) Development consent must not be granted for development that contravenes a development standard unless the consent authority has considered a written request from the applicant that seeks to justify the contravention of the development standard by demonstrating: (a) that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and (b) that there are sufficient environmental planning grounds to justify contravening the development standard. (4) Development consent must not be granted for development that contravenes a development standard unless: (a) the consent authority is satisfied that: (i) the applicant's written request has adequately addressed the matters required to be demonstrated by subclause (3), and (ii) the proposed development will be in the public interest because it is consistent with the objectives of the particular standard and the objectives for development within the zone in which the development is proposed to be carried out, and (b) the concurrence of the Secretary has been obtained. (5) In deciding whether to grant concurrence, the Secretary must consider: (a) whether contravention of the development standard raises any matter of significance for State or regional environmental planning, and (b) the public benefit of maintaining the development standard, and (c) any other matters required to be taken into consideration by the Secretary before granting concurrence.

The site is zoned R3 - Medium Density Residential under the LEP and the proposed development is permissible with consent. The objectives of the R3 zone are as follows: ● To provide for the housing needs of the community within a medium density residential environment. ● To provide a variety of housing types within a medium density residential environment. ● To enable other land uses that provide facilities or services to meet the day to day needs of residents. ● To recognise the desirable elements of the existing streetscape and built form or, in precincts undergoing transition, that contribute to the desired future character of the area. ● To protect the amenity of residents. ● To encourage housing affordability. ● To enable small-scale business uses in existing commercial buildings.
Under the LEP, the site has a maximum permissible height of 12m and a maximum permissible FSR of 0.9:1. The proposed maximum height is up to 13.5m in part, and the FSR is 1.3:1. A written request under clause 4.6 of the LEP was submitted seeking to justify the variation to both these standards.
The Council accepted the variation to the height based on the modified application but maintained a concern with the FSR exceedence sought.
The objectives of the FSR standard at cl 4.4 of the LEP are as follows: (a) to ensure that the size and scale of development is compatible with the desired future character of the locality, (b) to ensure that buildings are well articulated and respond to environmental and energy needs, (c) to ensure that development is compatible with the scale and character of contributory buildings in a conservation area or near a heritage item, (d) to ensure that development does not adversely impact on the amenity of adjoining and neighbouring land in terms of visual bulk, loss of privacy, overshadowing and views.

Objectors' submissions

In response to notification of the application, a number of objections were lodged raising concerns with overdevelopment manifesting in excessive mass, scale and bulk, height and FSR non-compliances, inadequate landscaping and building separation, poor internal amenity for future occupants, loss of privacy, parking and traffic issues, and DCP non-compliances.
At the commencement of the hearing, a site view was undertaken and the Court heard from 3 objectors being residents of Dolphin and Bream Streets including a representative of the owners' committee of the adjacent RFB to the west at 111-113 Dolphin Street. This objector supported removal of the boarding house but sought a development appropriate to the width and size of the site, arguing the site was too narrow for the scale of development proposed. She disputed the approved number of rooms within the existing boarding house and raised concerns with the application in terms of the density and the non-compliances with FSR, parking provision, front and side setbacks, building height, and external wall height. These non-compliances were seen to have adverse amenity impacts on the streetscape and on neighbours in terms of overshadowing and visual and acoustic privacy, and with increased demand for onstreet parking. This objector also disagreed that the proposal would be compatible with adjacent RFBs arguing that, in Dolphin Street, RFBs were primarily three storey and approval to the application would create an undesirable precedent. Finally, she raised a concern that the landscaping would result in mature trees located too close to the common boundary.
The other two objectors supported the concerns of the first objector but raised specific concerns with the lack of onstreet parking in the area resulting in frequent illegal parking, and with the excess FSR and height. One of the objectors had previously raised a concern with view loss but the applicant submitted that this had been addressed with the modified application.

FSR exceedence

Council's main concern with the application as amended was the FSR exceedance. The proposed FSR was 1.3:1 which the Council considered substantially exceeded the 0.9:1 FSR control in the LEP, being some 45% in excess of the control. The Council argued that the resultant building could not be said to be an outcome as good as could be achieved if compliance with the control was achieved.
The Council also referenced the planning principles in Veloshin v Randwick Council [2007] NSWLEC428 which, at para 32, states as follows: 32 Because of the frequency with which height, bulk and character are matters in contention, it is useful to establish planning principles to guide how they may be assessed. Planning principle: assessment of height and bulk ● The appropriateness of a proposal's height and bulk is most usefully assessed against planning controls related to these attributes, such as maximum height, floor space ratio, site coverage and setbacks. The questions to be asked are: Are the impacts consistent with impacts that may be reasonably expected under the controls? (For complying proposals this question relates to whether the massing has been distributed so as to reduce impacts, rather than to increase them. For non-complying proposals the question cannot be answered unless the difference between the impacts of a complying and a non-complying development is quantified.) How does the proposal's height and bulk relate to the height and bulk desired under the relevant controls? ● Where the planning controls are aimed at preserving the existing character of an area, additional questions to be asked are: Does the area have a predominant existing character and are the planning controls likely to maintain it? Does the proposal fit into the existing character of the area? ● Where the planning controls are aimed at creating a new character, the existing character is of less relevance. The controls then indicate the nature of the new character desired. The question to be asked is: Is the proposal consistent with the bulk and character intended by the planning controls? ● Where there is an absence of planning controls related to bulk and character, the assessment of a proposal should be based on whether the planning intent for the area appears to be the preservation of the existing character or the creation of a new one. In cases where even this question cannot be answered, reliance on subjective opinion cannot be avoided. The question then is: Does the proposal look appropriate in its context? Note: the above questions are not exhaustive; other questions may also be asked.
Expert evidence on planning matters was provided by Mr Betros for the applicant and Mr Harding for the Council.
Mr Betros had prepared the written request required under cl 4.6 which was amended to reflect the amended application (Exhibit B). In summary, the request sought to justify the FSR on the basis of the following: 1. The development would be compatible with the streetscape when viewed in the context of the surrounding, including neighbouring, properties in particular the taller development to the rear and the RFBs to the west and east. 2. The recessed fifth level is a relatively minor component and would not be readily visible when viewed directly in front of the site on either side of Dolphin Street and is consistent with the upper levels of the neighbouring RFBs to the east. In conjunction with the high degree of landscaping and deep soil planting, the recessed top floor and articulation of the building diminishes visual impact of the proposed built form. 3. The RFBs to the north (rear) fronting Bream Street are situated on elevated land and therefore the uppermost levels of these RFBs will continue to maintain an outlook over the site and will still dominate the skyline when viewing the site from the Coogee foreshore area. 4. The FSR standard has been frequently varied in the block in which the site is located and it is therefore unreasonable and unnecessary to impose the LEP FSR standard which would result in a development of a bulk and scale which was out of character with the surrounding established built context. Research indicated developments had been approved in the vicinity with excess FSR's varying from 0.98:1 to 3.15:1. 5. As the RFB is contained within a building envelope that is compatible with the established form of the surrounding area, it does not represent an overdevelopment of the site. 6. The variation sought will result in a desirable planning outcome as it supports a density and form of development that is appropriate for the site and commensurate with the surrounding built context. 7. There are no amenity impacts on neighbouring properties and the development will not result in any greater impacts than would arise from a proposal with a compliant FSR. 8. A development with a compliant FSR would be less appropriate in terms of context. 9. The development results in positive streetscape and landscape outcomes relative to the outdated two storey boarding house which currently exists on the site.
The research referenced by Mr Betros was included in the cl 4.6 justification request and comprised an FSR analysis of RFB developments surrounding the site summarised in a table. This table (Exhibit F) showed that 16 properties exceeded the LEP's FSR standard with 10 of these developments exceeding the proposed FSR for the site of 1.3:1. If the proposed development at 1.3:1 was approved and included, the average approved FSR would be in the order of 1.69:1.
Mr Betros advised that he had not compiled the original table which had been prepared for the development application for 123-129 Dolphin Street although he had added to it. Further, the original table had been referenced in Council reports in determining recent applications which exceeded the FSR standard in the LEP including for 81, 83 and 85 Bream Street to the rear of the site.
Mr Betros indicated that, whilst the FSR table did not take account of the site area of each property, he knew the locality and the properties were predominantly narrow lots. He accepted that there was an omission in the table in that 83 Bream Street was not included in the analysis but, as it was approved with an FSR around 1.38:1, he considered this would only marginally lower the average of the FSR exceedences in the locality.
Mr Astill, counsel for the Council, was critical of the table noting that there had been no independent check of the FSRs quoted and that a number of the referenced developments were old and preceded the current LEP, with the former LEP containing different controls. Mr Betros accepted the age of some of the RFBs but argued that the developments informed the context and were unlikely to be redeveloped, the FSR controls under the former LEP were not materially different, and that there remained a number of more recent developments approved under the current LEP with FSR exceedences.
The cl 4.6 request addresses, as is required, the objectives of both the FSR standard and of the R3 zone. It states that, in terms of the standard's objectives: 1. The development is of a size and scale compatible with the desired future character of the locality, as it was of a similar size and scale to other recent RFBs approved in the locality and consistent with the existing pattern of development and the overall form along this section of Dolphin Street. 2. In terms of ensuring that buildings are well articulated and respond to environmental and energy needs, the development contained openings along the northern and southern facades and, other than on the ground floor, all apartments were dual oriented to allow a high degree of natural ventilation, daylight and sunlight. This combined with the proposed materials, finishes and articulation meant the objective was met. The design would also provide excellent internal amenity outcomes for residents of the development and complied with solar access, daylight, ventilation, private open space and outlook and all of the core apartment design requirements. 3. Whilst there are two heritage items in the vicinity of the site, at 145 and 146 Dolphin Street, the proposed development would not detract from the value of these items (In evidence, compliance with this objective was not contended by the Council and the site is not within a conservation area). 4. There were no discernible adverse impacts on the amenity of adjoining neighbouring land arising from the additional FSR in terms of visual bulk, loss of privacy, overshadowing or view loss. As the land slopes from the southern to the northern side of Dolphin Street, the properties to the north will continue to retain upper level views across the site (noting also that the development had been modified to address a view issue that had arisen in a submission from a property to the north). Furthermore, there were no windows along the side facades limiting the potential for overlooking. 5. The site was substantially underdeveloped in terms of the LEP controls and any development of it would inevitably have some impact on adjoining neighbours.
In terms of the objectives of the R3 zone, it was not contended that the development did not provide for the housing needs of the community within a medium density residential environment nor provide for a variety of housing. The objectives relating to non-residential land uses were not applicable and the applicant's argument previously outlined in terms of the streetscape and amenity objectives of the FSR standard were repeated in the request.
The housing affordability objective was addressed by the SEPP cl 50 assessment but the cl 4.6 request also argued that the FSR sought accommodated a number of studio and one bedroom apartments which, combined with the lack of onsite parking, would contribute to the affordability of the development.
The cl 4.6 request also argued that the replacement of the existing outdated building with high quality residential units achieved the primary objectives of the zone and would be in the public interest as it would be perceived in a harmonious manner with the surrounding built context.
Consistency with State and regional planning policies were not contended and the variation request argued consistency with such relevant policies.
The cl 4.6 request therefore concluded that compliance with the FSR standard was unreasonable and unnecessary in the circumstances and that there would be no public benefit in maintaining the standard, which had regularly been exceeded in the vicinity, and that the development met the objectives of the standard to an equal or better degree than a compliant development.
Mr Hemmings, counsel for the applicant also argued that the extent of the non-compliance was irrelevant as any non-compliance needed to satisfy the same cl 4.6 test. He submitted that the development had responded to the constraints of the site with the design accommodating the additional floor space sought without any adverse consequences and leading to an improved built form outcome relative to a compliant development. He noted the flexibility in cl 4.6 is there to deliver a better outcome not only from the development but for the development and the design had beneficial outcomes with the floor space proposed than would be achieved by a narrower smaller building with a lesser FSR inappropriate in its context.
The Council accepted that the setback and articulation to the eastern boundary in the amended application gave improved amenity for neighbours but argued this demonstrated that even further reduction in floor space and increased setbacks and articulation would further improve that amenity.
In agreeing that the height exceedence had been justified through the amendments to the application, the Council considered that this presented the opportunity for compliant floor space to be provided at a higher level thus giving the ability on the narrow site to provide additional side setbacks.
It was agreed that the DCP did not specify side setbacks for sites less than 12m in width, which includes the appeal site, but that the determination of appropriate setbacks was merits based. Part C2 of the DCP includes a setback objective of ensuring adequate separation between buildings for visual and acoustic privacy, solar access, air circulation and views. It was also agreed that the Apartment Design Guide (ADG) was the guiding design document.
The Council did not contend that the 0.9:1 FSR standard needed to be complied with but did argue for a reduction in floor space to enable additional side setbacks in order to provide greater amenity, improved landscaping and better streetscape presentation. In this regard, it was contended that the FSR sought did not enable adequate side setbacks and would therefore not meet in particular objective (d) of the standard namely: to ensure that development does not adversely impact on the amenity of adjoining and neighbouring land in terms of visual bulk, loss of privacy, overshadowing and views.
Specifically Mr Astill advised that the Council was concerned that the exceedence in FSR results in adverse impacts "in terms of at least bulk, privacy and perhaps views and overshadowing". He noted at least one objector residing in the adjoining RFB to the west was concerned with bulk and the proximity of the proposed apartments.
Mr Betros argued that sites on the northern side of Dolphin Street, including the appeal site, had a north south orientation with adjoining RFBs designed with dwellings with living areas with the same orientation allowing good solar access into north facing and rear side windows without reliance on solar access from adjoining sites. Furthermore, the application had no side facing windows so privacy and visual and noise impacts to neighbours would be avoided or minimal and would be an improvement on what currently exists with the boarding house. Therefore it could be argued that the development provided improved amenity for neighbours relative to the current development on and use of the site.
No expert evidence was provided in the joint report on the streetscape impacts but, in evidence, Mr Harding contended that side setbacks made an important contribution to the streetscape and that none of the neighbours or buildings in the street had such small side setbacks for so tall a building. Therefore the side setbacks should be commensurate with the height. He did not seek a specific numeric setback to either side boundary but maintained that what was proposed was insufficient.
Mr Betros argued that the proposed side setbacks were consistent with the rhythm of side setbacks in the street and that the required provision of landscaping was provided for the development. However, Mr Harding did not accept that the current rhythm of development in the street was necessarily a desirable element for the desired future character as some side setbacks weren't as great as he considered desirable.
Mr Harding had not considered whether the area was undergoing transition but he indicated this was not an underlying purpose of side setback controls. His concern was that the development did not allow for enough articulation in terms of the extent of unbroken wall along both side boundaries had inadequate landscaping, particularly to the western boundary.
Whilst the Council accepted that the ADG and DCP requirements in terms of compliant solar and ventilation access for the development and for neighbours were met, and did not raise a concern in terms of specific privacy, noise, visual or view impacts, Mr Harding believed that the building could be better designed to provide improved solar access to proposed living spaces by further setting back the upper levels on the eastern side which would also reduce any adverse impacts on neighbours.
Mr Harding understood the design philosophy for the building in terms of orienting units to overlook the park and coast and away from the higher RFBs to the rear (north) and accepted that the 0.9:1 FSR standard could be exceeded if amenity and streetscape issues were overcome.
He accepted that, in the immediate vicinity, landscaping wasn't common between buildings, however believed this development provided the opportunity for greater side setbacks than currently exist with the boarding house resulting in better outcomes for the site, for neighbours and for the street.
Mr Harding had not looked at possible alternative or complying scenarios and considered this was the responsibility of the applicant. However, he had undertaken some solar analysis which suggested increasing the side setbacks would improve solar access in general and he suggested reduction in the rear setback to enable increased side setbacks.
In the Joint Expert Report (Exhibit C) at p17, Mr Harding's concern with improving solar access from increasing side setbacks refers to the proposed development not to neighbours. In the same report, Mr Betros states that solar access to the primary living areas of the neighbours will be improved as a result of the development relative to the existing boarding house given the increased rear setback.
Modifications during the hearing agreed to by the applicant and supported by the Council, reflected in the Exhibit L plans, provided an increased eastern setback at the uppermost level and increased side setbacks at the rear of the building which allowed north facing windows to the living areas of rear apartments and additional landscaping in the side setback areas. This design change resulted in a slight reduction of the rear setback which nevertheless still exceeded that required.
Mr Betros advised that a compliant scheme, with the same side setbacks would be 2 storey whilst Mr Harding considered it could be 3 storeys. Mr Betros considered that even at 3 storeys, but particularly 2 storeys, any development would look subservient and out of character with the higher RFB development adjoining and in the street. Mr Harding did not accept that this would necessarily be the case.
Mr Hemmings submitted that a compliant scheme had not been prepared for the Court as the parties agreed that a development at 0.9:1 FSR would not be appropriate for the site suggesting that a greater FSR was supportable, it was just a question of what that FSR should be. The application had been modified in response to the Council's concerns and the FSR reduced from 1.5:1 to 1.3:1 which the applicant maintained was appropriate for the site.

Onsite parking

It was agreed that the DCP required 9 parking bays to be provided onsite, being 7 for residents and 2 for visitors although the applicant also noted that the DCP makes reference to car share facilities as an alternative to onsite provision stating "car share facilities in certain locations are a viable option and should be discussed with Council staff". Further, the Council's website advised that one car share space was equivalent to taking 7-20 cars off the road. On this basis the application had no onsite parking but the applicant proposed to fund the provision of an additional car share bay in the vicinity of the site and to provide car sharing membership for occupants.
The Council contended that some onsite car parking should be provided. The close proximity of Coogee Beach was noted along with the limited availability of onstreet parking in the area, an issue highlighted by residents.
The Council argued that the DCP was generous to applicants in the required parking provision and the Council did not expect full compliance for onsite provision given the narrowness and constraints of the site. However, it was argued that some provision should be made as had occurred in other recent developments on narrow sites in the vicinity.
Specifically the Council referenced the developments at 81 and 83 Bream Street being two new developments on similar sized sites which provided some on street parking and gained Council dispensation for the shortfall.
The applicant argued that 81 and 83 Bream Street were on steeper wider sites where basement parking was easier to accommodate and comprised boundary to boundary buildings which were necessary in order to accommodate the design requirements of a basement car park. This was not in accordance with the Council's desire to have side setbacks. Furthermore, these developments comprised 3 bedroom apartments which generated more demand for parking than would be generated by the proposed development.
The applicant also argued that no parking had ever been provided on the site including for the current boarding house use which would have a requirement for 2.4 spaces under the ARH SEPP. The justification for not providing onsite parking was the narrow frontage, the implications for the design and the streetscape associated with trying to accommodate onsite provision, and the precedence of the Council not requiring provision in accordance with its DCP controls for other applications.
The applicant referenced numerous DCP objectives and controls for parking which promotes sustainable transport including use of public transport and car share arrangements.
Reference was also made to a Council approval (referred to as the Westpac site) at 223-225 Coogee Bay Road, Coogee where a car share bay was provided in lieu of parking. In that instance, the proposed development provided no onsite parking despite a requirement for 14 bays. As evidence by the report to Council on the application (Exhibit K), no onsite parking provision was supported by the Council planners, despite the opposition of the Council's development engineer, for reasons including that the Council's DCP controls had a strong emphasis on encouraging environmentally sustainable transport options, the physical constraints of the site, the support of the DRP to provide no onsite parking, and the objectives of the DCP which encourage provision of car sharing spaces as an alternative to onsite provision.
The Council noted however, that the circumstances in terms of the Westpac site were different, in particular that the development was for a mixed use building in a commercial zone within the Coogee town centre.
Reference in the Council officer's report on the Westpac site, was made to the Court's decision in Sheer Property Group Pty Ltd & anor v Randwick City Council [2013] NSWLEC 1168. In this decision, Fakes C upheld an appeal and approved a residential development at 143-145 Mount Street, Coogee without any onsite parking despite 4 car spaces being required, instead conditioning the consent to require the provision of a car share space and car sharing membership.
The applicant also referenced the Council's approval of 105 Anzac Parade, Kensington where car sharing was supported in lieu of onsite parking. Little detail on this development was provided to the Court although the Council indicated that, whilst car sharing was supported to offset parking, some onsite parking was still provided.
The applicant also cited Sheer Property Group noting in that decision that the Court found that providing car sharing as an alternative to onsite provision was fully in line with the thrust of the sustainable transport measures in the DCP.
The applicant also referenced the DRP's strong support for no parking being provided, noting that the DRP had been assessing applications since 2002 and therefore had considerable experience in dealing with Council's controls.
Mr Astill submitted that the DRP was not qualified to comment on parking provision and mainly dealt with apartment design requirements under SEPP65. He was also critical that the applicant was promoting use of the public street to provide the car share space, meaning a loss of an onstreet bay for general public use, rather than meeting parking demand onsite.
Expert evidence on traffic and parking was provided by Mr McLaren for the applicant and Mr Flannagan for the Council.
The experts agreed that it was not feasible to provide all of the required parking onsite, that the area was well serviced by public transport and that there were shopping and entertainment facilities within walking distance of the site. Further, that the DCP promoted sustainable transport use and car sharing.
Mr Flannagan did not agree however, that this meant that no onsite parking should be provided. He was critical that the applicant had made no attempt to provide for any onsite parking notwithstanding that sites in the vicinity with similar narrow widths had provided at least some of the required provision.
The experts disagreed on how much street parking was available in the area for residents and visitors. They also disagreed on how much parking could feasibly be accommodated onsite.
Mr Flannagan considered 4-5 spaces could be provided but Mr McLaren was of the view that 2 or, at most, 3 could feasibly be provided. In Mr McLaren's opinion, more than 2 spaces would require absolute minimum internal design requirements being met and the lift core relocated, whilst even providing 2 spaces would require cars reversing on the street and the likely loss of 1 existing onstreet car space. Mr Flannagan noted that the provision of an additional car share bay in the area would also likely result in the loss of one public onstreet car space.
Mr Flannagan accepted it would be difficult to provide both a basement car park and the side setbacks of the building that the Council planners were seeking. Mr McLaren argued that the side setbacks would need to be reduced and the building substantially redesigned if there was any prospect of more than 2 spaces being accommodated.
Mr Harding indicated that a nil side setback to the ground floor could be supported if it was required to provide a basement car park but that upper level setbacks could and should still be provided.
Mr Betros argued that providing a basement car park would require a projection to the boundary which would have adverse streetscape impacts as it would be uncharacteristic with development in the street. He also argued that any entry to a car park on the site would be opposite the entry to the public car park adjacent to the oval and that the proximity of this car park would assist in providing parking for visitors. His evidence in the Joint Report (Exhibit C) was that the absence of onsite parking was consistent with the majority of RFBs in the block containing the site and bounded by Dolphin, Hill, Bream and Arden Streets.
Should the Court grant consent without onsite parking, the parties agreed to a condition of consent requiring that the applicant make application for approval of a car share parking pod to be located adjacent to the property. If that application was approved, the applicant would provide membership entitlements for 9 occupants of the development to use vehicles provided by a relevant car share provider for a minimum period of 10 years.

Loss of affordable housing

The current use of the site is as a boarding house and therefore the Affordable Rental Housing SEPP applies. Under clause 50 of the SEPP, the Court is required to consider the impact of the loss of the affordable rental housing before determining the application. Specifically, the Court must have regard to a number of factors which derive an 'assessment' of impact including the requirement for a financial contribution to be made should the assessment indicate continued operation of the boarding house is viable.
The applicant initially argued that, based on previous Council decisions, it was assumed that the applicant would be obliged to pay a contribution for the loss of affordable housing which would adequately mitigate the loss of the boarding rooms. However, the applicant subsequently accepted that the Court is required to have regard to the factors under cl 50 before a determination of the application, and any required offset contribution, could be made. The onus was on the applicant to provide the required information for the assessment to be undertaken given consent to remove affordable housing was sought.
As an incomplete assessment had been prepared by the applicant, and with the agreement of the parties, the proceedings were adjourned to enable the required documentation to be prepared and the assessment to be undertaken and to be considered by the Council, and for the Court to then have regard to the findings.
Clause 50 of the SEPP reads as follows: 50 Reduction of availability of affordable housing (1) A person must not do any of the following in relation to a building to which this Part applies except with development consent: (a) demolish the building, (b) alter or add to the structure or fabric of the inside or outside of the building, (c) change the use of the building to another use (including, in particular, a change of use to backpackers accommodation), (d) if the building is a residential flat building, strata subdivide the building. (2) In determining a development application referred to in subclause (1), the consent authority is to take into account the guidelines and each of the following: (a) whether there is likely to be a reduction in affordable housing on the land to which the application relates, (b) whether there is available sufficient comparable accommodation to satisfy the demand for such accommodation, (c) whether the development 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, (e) the extent to which the development contributes to any cumulative loss of affordable housing in the local government area, (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, (g) whether the imposition of a condition requiring the payment of a monetary contribution for the purposes of affordable housing would adequately mitigate the reduction of affordable housing resulting from the development, (h) in the case of a boarding house, the financial viability of the continued use of the boarding house. (3) For the purposes of subclause (2) (b), sufficient comparable accommodation is conclusively taken to be not available if the average vacancy rate in private rental accommodation for Sydney as published monthly by the Real Estate Institute of New South Wales is, for the 3 months immediately preceding the date of lodgment of the development application, less than 3 per cent. (4) For the purposes of subclause (2) (h), the continued use of a boarding house is financially viable if the rental yield of the boarding house determined under clause 51 (5) not less than 6 per cent.
Contributions for the loss of affordable rental housing are dealt with at clause 51 of the SEPP which reads as follows: 51 Contributions for affordable housing (1) For the purposes of section 94F (1) of the Act, this Policy identifies a need for affordable housing on land within the Sydney region and on land within the local government area of Newcastle or Wollongong City. (2) For the purposes of section 94F (3) (b) of the Act, this Policy authorises a condition to be imposed under section 94F of the Act if: (a) the consent authority, when determining a development application referred to in clause 50 (1), is satisfied that the proposed development will or is likely to reduce the availability of affordable housing within the area, and (b) the condition is imposed in accordance with the scheme for dedications or contributions set out in subclauses (3) and (4). (3) If a condition is to be imposed under this clause, the amount of the contribution is to be calculated in accordance with the following formula: where: C is the contribution payable. L is the total number of bedrooms in a low-rental dwelling and boarding rooms that will be lost by the proposed development. R is the replacement cost calculated as the average value of the first quartile of sales of strata properties in the local government area in which the development is to take place, as specified in the 4 most recent editions of the Rent and Sales Report. (4) Despite subclause (3), where the development application relates to a boarding house that the consent authority has assessed as not being financially viable: (a) if the rental yield is 3 per cent or less, no contribution can be sought, and (b) if the rental yield is more than 3 per cent and less than 6 per cent, the contribution payable is to be reduced by being calculated in accordance with the following formula: where: C is the contribution payable. X is the contribution that would be payable under subclause (3). RY is the rental yield. (5) In this clause: rental yield means the rental yield for a period (expressed as a percentage) determined by the consent authority in accordance with the following formula and taking into account the guidelines: where: RY in the rental yield. Y is the gross rental income from the boarding house for the period. E is the total expenses for the boarding house (excluding expenses that have been charged to lodgers) for the period. D is the capital depreciation of the boarding house for the period. V is the total value of the boarding house were it to be purchased for the purposes of continuing its use as a boarding house. U is the estimated cost or carrying out work as determined under clause 50 (2) (f).
Following the adjournment of the proceedings, an assessment under cl 50 was undertaken by the applicant (Exhibit O). Mr Hemmings claimed that there was no guidance on how such an assessment should be undertaken.
However, there are guidelines produced by the NSW Department of Planning which are specifically referenced in the SEPP being Guidelines for Retention of Existing Affordable Rental Housing and dated October 2009 (the guidelines).
In this regard, cl 50(2)(2) of the SEPP requires the consent authority, in this case, the Court, in determining an application which reduces the availability of affordable housing to take into account the guidelines as well as the listed criteria. This does not mean that the assessment itself is determinative in granting consent to the loss of the existing affordable housing but it must be taken into account as must the guidelines which in essence outline how the assessment is to be undertaken and what it should address.
In summary, the SEPP cl 50 assessment which was prepared by the applicant, without apparent reference to the guidelines, found as follows: 1. In terms of cl 50(2)(a), there will be a loss of affordable accommodation on the site comprising 12 boarding rooms although arguably the proposed RFB contained some studios and with no onstreet parking, would likely be more affordable than other new apartments in the area; 2. In terms of cl 50(2)(b) and (e), whilst no information was provided by the Council on the amount of comparable accommodation lost in the locality, the applicant's research indicated that there are 12 boarding houses in Coogee and that 687 boarding rooms have been approved in recent times in the Randwick LGA, with most operational or under construction, more than compensating for the 12 rooms lost in this application. However, as required by cl 50(3), sufficient comparable accommodation was not considered to be available, as the average vacancy rate as defined in cl 50(3) was determined by the Real Estate Institute of NSW to be 1.9% and therefore less than 3%. 3. In terms of cl 50(2)(c), as the boarding rooms were all occupied by people on tourist or student visas who tend to stay 6-12 months, it was unlikely that there would be any adverse social or economic effects on the general community; 4. In terms of cl 50(2)(d), the applicant offered to pay the bond of displaced boarding house occupants to assist them in securing alternative accommodation as this was likely their biggest cost in moving; 5. In terms of cl 50(2)(f), a BCA Compliance Report was prepared which addressed the boarding house's compliance with the BCA, including fire safety requirements. A structural engineering report was also prepared. In essence, these reports indicated that upgrade works were required to make the building structurally sound and for compliance with the BCA, including with the relevant fire safety requirements. A subsequent quantity surveyor's report (the QS report) indicated it would cost in the order of $1m to carry out the recommended works to ensure compliance (Exhibit R); 6. In terms of cl 50(2)(g), which deals with any condition requiring the payment of a contribution to mitigate the reduction of affordable housing, the determination of or requirement for such a contribution is dealt with under clause 51 of the SEPP, which I will deal with shortly; and 7. In terms of cl 50(2)(h), a valuation had been prepared (Exhibit S).
The applicant then used the Boarding House Financial Calculator (the Calculator) to determine rental yields. The Calculator is an Excel based program produced by Housing NSW that allows the user to input development related data online. It then calculates the development yield of a boarding house on the basis of the formula in cl 51(5) of the SEPP.
Inputting the applicable data into the Calculator from the documentation provided, research undertaken and reports prepared for the assessment, the applicant contended that the continued use of the boarding house would not be financially viable with a rental yield of 1.67%. This was on the basis of the determination of viability under cl 50(4) of the SEPP, as the rental yield of the boarding house would be less than 3%.
Under the provisions of cl 51(4)(a) of the SEPP, no contribution is payable if the rental yield is 3% or less, therefore the applicant argued that a condition of consent requiring a contribution could not be imposed.
The Council disputed aspects of the assessment undertaken including claiming that, whilst the valuer had considered market rents in determining viability, the assessment on yield had only looked at the rents the boarding house proprietor indicated were currently being paid. Furthermore, the Calculator assessment erroneously included the cost of upgrades in the valuation, there was a discrepancy in the number of rooms purported to be in the boarding house, a number of purported boarders did not have tenancy agreements, the QS Report was based on plans the Council had not been provided with, and it was unclear what expenditure was due to inadequate maintenance.
The Council did not however, disagree with the use of the Calculator as a tool to determine viability, only with the value of some inputs. Mr Astill did advise the Court that the Council had had limited time to review the assessment. He contended that a number of items in the BCA Compliance Report had not been verified or appeared excessive. Examples of these items were given.
The applicant advised that the valuer had used market not actual rents and, even if the rental yield was recalculated using adjustments to reflect the amended valuation figure sought by the Council, which excluded the cost of upgrades, the yield was still less than 3% at 2.64%. Furthermore, the Council had not provided any expert evidence or documentation to counter the assessment undertaken by the applicant which was based on documentation prepared by experts and provided to the Court.
If the application was approved, the Council sought the imposition of a condition of consent requiring payment of a contribution of $427,950 by the applicant to mitigate the loss of the proposed low rental accommodation under the provisions of cl 51 if the SEPP. The basis of determining this amount, relative to cl 51 or otherwise, was not provided to the Court. The condition was opposed by the applicant. The parties did however, agree on conditions which require the applicant to provide assistance to the boarders associated with their relocation, and depending on their circumstances, including financial assistance.
Neither party to the proceedings specifically addressed the guidelines which the Court is required to consider under cl 50(2)(2) of the ARH SEPP prior to determining the application.
The Council tabled a letter from the Minister for Planning dated January 10, 2017 supporting the Council's commencement of processes to include the Randwick LGA within State Environmental Planning Policy No 70 - Affordable Housing (Revised Schemes) (SEPP70) to identify Randwick as an LGA with a need for more affordable housing. The letter notes that this is the first step in enabling the Council to levy for affordable housing contributions.
Mr Hemmings noted that the letter requires the Council to first prepare an affordable housing contributions scheme for the areas in which the Council wishes to levy contributions. The LEP and SEPP both then need to be amended depending on the requirements of that scheme.

Findings

In amending the application, only three issues remained in contention: namely the acceptability of the clause 4.6 request in terms of FSR exceedence and the design outcomes that result; the lack of onsite parking; and the assessment under clause 50 of the SEPP. I will deal with the clause 4.6 request first before turning to the other two remaining matters.
Although the application had been amended to provide some side articulation and increased side setbacks, the Council opposed the exceedence sought to the FSR arguing that less floor space would enable increased side setbacks and landscaping and further improve solar access and amenity for the development and for neighbours. This was notwithstanding that the Council agreed that the development complied with relevant controls in terms of the amenity of the proposed apartments and the potential impacts on neighbours, and did not seek for the FSR to be limited to 0.9:1.
The applicant argued, through a comprehensive cl 4.6 written request, and in evidence, that to impose the FSR LEP control of 0.9:1 was unreasonable and unnecessary in the circumstances of this development.
For the reasons that follow, I am persuaded that the preconditions of cl 4.6 are met largely for the reasons outlined in the cl 4.6 variation written request and based on the evidence provided. I have also determined that the application warrants approval with the FSR proposed.
The Council accepted the height exceedence sought and the issue was therefore only the appropriate amount and location of the floor space proposed. In this regard, I agree with Mr Betros that providing less floor space with greater side setbacks at an agreed height of up to 13.5m would result in a narrow building with side setbacks out of character with its context, including neighbours to all boundaries, and with other development in the street.
Further there was no evidence that a compliant FSR would result in any improved amenity for the occupants of the building or its neighbours relative to the adverse streetscape impacts which I consider a narrow building with wider side setbacks on a 9.57m wide site would create. The building as it is proposed is already less than 8m in width with a height up to 13.5m.
Reducing the height instead in response to reduced floor space would also result in a building out of character with new and prevailing RFB development immediately adjoining, in the street, and in the vicinity, being lower than much of that development.
The Council argued that less floor space would enable increased side setbacks although no specific setbacks were sought. Increased side setbacks were seen to provide greater opportunity for additional landscaping, improved amenity for occupants and neighbours, and articulation of side facades with resulting improved streetscape presentation.
The applicant, in response to this second concern, undertook modifications to the application prior to and during the hearing resulting in increased setbacks, landscaping and some articulation. I am satisfied that, to the extent that is reasonable, these address the Council's primary concerns, noting my finding regarding the questionable merits of further side setbacks in terms of the resultant narrow built form.
I also note the Council agreed that landscaped side setbacks were not prevalent for RFBs in proximity to the site, including in Dolphin Street, and that there was no numeric DCP side setback non-compliances.
Given the compliance with required amenity controls, I am not persuaded of the need to further setback the development from side boundaries, noting also that the main objector to the west requested no large trees in close proximity to the common boundary.
Whilst I accept that the development as amended provides for an appropriate contextual fit with the floor space proposed, I am still required to ensure that the cl 4.6 test has been met as a pre-condition to any approval having regard to the various authorities which address this pre-condition.
In this regard, I found the cl 4.6 request prepared by Mr Betros to be comprehensive and compelling in demonstrating that applying the LEP FSR control of 0.9:1 in this instance would not meet the intent of the objectives of the standard relative to the development proposed. In particular, the alternative development with an FSR of 1.3:1 will result in a built form outcome more appropriate to its context being of a size and scale compatible with the existing character of the area, including of recent development, and therefore is compatible with the desired future character.
I cannot agree with the Council that the FSR proposed failed to meet the objectives of the standard, in particular objective (d) as there was no evidence that the development adversely impacts the amenity of adjoining and neighbouring land in terms of visual bulk, loss of privacy, overshadowing and views, and the Council did not provide any evidence of such adverse impacts. Rather there was agreement that design controls to ensure amenity impacts did not result from development were all achieved and it was not contended that the development did not provide improved amenity for neighbours relative to the existing development on the site which complies with the FSR standard.
As I have indicated, the only real argument advanced by the Council for reducing the floor space was to provide greater side setbacks which would provide opportunities for improved landscaping and articulation, and reduce impacts. Yet Mr Harding accepted that landscaped side setbacks were not prevalent in the vicinity and neighbours did not seek this outcome. The application had been modified to provide some articulation and, given the narrow nature of the site and the proximity of adjoining RFBs to both side boundaries, the ability to view further articulation would be limited, in terms of streetscape outcomes. In this regard I agree with Mr Betros that the proposed development, in terms of side setbacks, maintains the rhythm of spatial separation between buildings along Dolphin Street.
It was not disagreed by the Council that the 2 storey boarding house represented an underutilisation of the site as the applicant contended. A new RFB development on an infill site will generally always have some impact on neighbours. It is the reasonableness of that impact based on amenity tests arising from design controls which is the relevant consideration. In this case those tests indicate the proposed impacts are reasonable, are not made unreasonable by the FSR proposed and are potentially improved as a result of the redevelopment of the site.
I therefore consider the zone and standard objectives of protecting the amenity of residents and neighbours has been met and find no basis for enforcing an FSR control that has been exceeded in many of the surrounding developments and would therefore result in a built form out of character with the area.
In terms of the remaining zone objectives, of those contended by the Council as not being met, there is a requirement to recognise the desirable elements of the existing streetscape and built form. Only in precincts undergoing transition is there a requirement to have development which contributes to the desired future character of the area. There was no evidence to indicate this was a precinct undergoing transition in fact the site view indicated that transition had already occurred. However, I have already addressed the standard objective of responding to desirable future character by noting the number of recent RFB developments which exceed the FSR control.
The desirable elements of built form were not specifically argued in evidence other than in terms of setbacks which I have already commented on, and therefore it can be concluded this objective is met.
In terms of encouraging housing affordability, whilst there is a loss of a form of affordable housing, the Council did not dispute the applicant's contention that the development which includes studio and 1 bedroom apartments with no parking would provide an alternative form of affordable housing relative to other new RFBs in the area. To that extent, the objective is met.
Having met the applicable objectives of the R3 zone and the FSR standard, the development in terms of the FSR proposed, is in the public interest notwithstanding the objections lodged arguing the contrary.
I also agree with the written cl 4.6 request that the positive streetscape outcome from this development relative to the existing development, lack of amenity impacts and replacement of an aged building with a contemporary development are planning grounds which support the FSR exceedence and meet in part the objectives of the FSR standard. Specifically these factors, along with the numerous similar exceedences of the FSR standard in the vicinity of the site which have created a built form and streetscape context which the application emulates, provide sufficient environmental planning grounds to justify the contravention to the FSR standard sought.
Having determined that it is appropriate in this circumstance to utilise the flexibility offered by cl 4.6 to enable a better outcome for and from development, the application could therefore be determined on its merits with the FSR proposed. I therefore now turn to the issue of provision of onsite parking.
It was agreed by all experts that car sharing and use of public transport as an alternative to or in addition to onsite provision is promoted by Council's DCP in certain circumstances. I find that the development meets a number of these circumstances including the site constraints and the good proximity to public transport and services.
It was not proven that the Council's desire for the building to maximise side setbacks would be compromised by basement parking provision although I accept this could be the case. I was more persuaded that there might be limited net gain in providing such parking at the expense of a substantial redesign of the building given the potential loss of onstreet parking for access. It was also not conclusive as to whether any such onsite parking would require reversing of cars onto the street in a location opposite the entry to a large public car park, which would be less than ideal.
Given the above, I have formed the view that there would be little utility in requiring the development to be redesigned to facilitate onsite provision of some parking which, at worse if an onstreet bay was lost, could result in the additional net gain of 1 car space and, at best, could accommodate 4-5 spaces but with cars potentially needing to reverse onto the street.
I also note the absence of parking onsite now, the view of the DRP to strongly support no onsite provision, and the precedence of the Council having permitted car sharing in lieu of onsite parking provision elsewhere in the LGA as well as the decision of this Court in Sheer Property Group which was in the same LGA and suburb.
On balance, I therefore believe it is a reasonable outcome to accept a car share space and car sharing membership for occupants as an alternative to onsite provision in this instance notwithstanding the resident's concerns in terms of the demand for parking in the area, which are not disputed. Car sharing conditions agreed by the parties have been imposed accordingly.
In terms of the assessment required and provided under the ARH SEPP, whilst the Council raised some concerns with aspects of it and, I accept, had limited time to review it or to secure expert advice to respond to it, adjournment of the proceedings was not sought by the Council to enable further time for this to occur. The Court had agreed with the Council that the initial assessment was inadequate and proceedings had been adjourned to require the assessment to be completed in accordance with cl 50 and 51 of the SEPP. This was done by the applicant and provided to the Council to review ahead of the hearing recommencing.
It is the case that neither of the parties addressed in evidence the issue of the guidelines that the Court is required to consider before granting consent and it would appear the applicant did not have regard to them in undertaking the required assessment under cl 50 nor the Council in reviewing that assessment. However, it does not necessarily follow that the assessment is not in accordance with the guidelines which only requires that the consent authority, that is the Court, have regard to them prior to determining an application, albeit they are only guidelines.
In this regard, I have reviewed the guidelines in considering the assessment that was submitted and specifically the required criteria to be assessed. In particular, given the requirement for a contribution was contested between the parties, I note that that, in determining any contribution payable, the guidelines reproduce the formula at cl 51 of the SEPP. I have reviewed the calculation under this formula, noted the input basis of the applicant relative to the guidelines as well as the Council's concerns, and concluded that the assessment generally aligns with the intent of the guidelines and under the SEPP for determining viability.
The exception is in terms of the sufficiency of comparable accommodation in the area. The guidelines and the SEPP make it clear that the agreed Sydney vacancy rate of less than 3% means comparable accommodation doesn't exist. Therefore there must be social and economic impacts from the loss of the boarding rooms and no weight can be given to the applicant's analysis that the loss is outweighed by the number of new boarding rooms in the LGA. It is therefore important that arrangements are in place to assist displaced boarders. These are proposed as conditions of consent agreed between the parties.
I also note that the Council was not arguing that the development would result in an unacceptable loss of affordable housing, rather only the viability of the boarding house and therefore the value of any contribution that should be conditioned payable to the Council for its loss, albeit under s94G of the Act any such contribution must be transferred to Housing NSW.
In the absence of evidence to the contrary, and given the applicant has followed the formula in the SEPP with no alternative inputs documented or provided by the Council, I find it necessary to accept the applicant's assessment, analysis, evidence and conclusion. That is that the ongoing operation of the boarding house will not be financially viable as it will have a rental yield of less than 6%.
As the rental yield is assessed to be less than 3%, under the provisions of cl 51(4) of the SEPP no contribution can be required of the applicant in terms of s94F(1) of the Act and no condition requiring any contribution can or has been imposed accordingly.

Orders

The orders of the Court are: 1. The appeal is upheld. 2. DA/935/2015 for the demolition of an existing boarding house and construction of a residential flat building at 115 Dolphin Street, Coogee is approved subject to the conditions in Annexure A. 3. The exhibits, except Exhibits E, J, L, O, 2, 8 and 10, are returned.

Jenny Smithson Commissioner of the Court 201677.16 Annexure A (C) (251 KB, pdf)

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: 26 April 2017

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