IDC Property Management Pty Ltd v Inner West Council

Cases Cited: Australian Protein Recyclers v Goulburn Mulwaree Council [2006] NSWLEC 641
Billyard Ave Developments Pty Limited v The Council of the City of Sydney [2025] NSWLEC 22
Four2Five Pty Ltd v Ashfield Council [2015] NSWCA 248
Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118
Kelly v The Queen (2004) 218 CLR 216
SHMH Properties Australia Pty Ltd v City of Sydney Council [2018] NSWLEC 66
Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827

Texts Cited: Guidelines for the Retention of Existing Affordable Rental Housing, October 2009

Category: Principal judgment

Parties: IDC Property Management Pty Ltd (Applicant)
Inner West Council (Respondent)

Representation: Counsel:
J Reid (Applicant)
M Harker (Respondent)
Solicitors:
Thomson Geer (Applicant)
Inner West Council (Respondent)

File Number(s): 2024/319898

Publication restriction: Nil

JUDGMENT

1. COMMISSIONER: This appeal is primarily about the potential loss of affordable housing for low income households in an existing house-let-in-lodgings and if any loss has been overcome by the provision of additional affordable housing.

2. The Applicant, IDC Property Management Pty Ltd (IDC) has appealed pursuant to s 8.7 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) against Inner West Council’s (Council) refusal of Development Application No. DA/2023/0900 (DA). The DA seeks consent for the partial demolition of the former Commonwealth Bank building and construction of a three storey co-living house development with a ground floor café at 119 Booth Street, Annandale and alterations and additions to the existing house-let-in-lodgings at 121-125 Booth Street, Annandale, as well as lot consolidation and remediation across both sites.

3. With consideration of the evidence and submissions, I find that the proposal does result in a loss of some affordable housing for low income households, however this is offset by the overall increase in affordable housing proposed by the development. The application should therefore be granted development consent, subject to conditions.

The proposed development

4. The proposal has changed since its lodgement to Council. Most significantly, the proposal retains the existing development on site. At the hearing, further information supporting the DA was tendered including an Aboricultural Impact Assessment prepared by Blue Tree & Consultancy dated April 2025 (Arborist Assessment) and Remediation Action Plan and Detailed Site Investigation both prepared by EI Australia. The Court granted leave for IDC to amend their DA for an amended Plan of Management prepared by The Planning Studio dated 19 May 2025 (PoM) and amended written request prepared by The Planning Studio dated 19 May 2025 (written request). These documents were considered during joint expert reporting, and the amendments were unopposed by Council subject to costs as agreed or assessed under s 8.15(3) of the EPA Act.

5. The amended DA seeks consent for the following works:

6. Lot consolidation, site remediation and partial demolition of the former Commonwealth Bank Building.

7. Alterations and additions to the existing house-let-in-lodgings development at 121-125 Booth Street (Lodgings Development) comprising of:

(a) Increase of three rooms; (b) Upgrades to various rooms including new balconies and kitchenettes; (c) New shared lift area; (d) New communal open space areas and smaller spaces on some floors; (e) Reduction in car parking; (f) Increased landscaping; and (g) Associated works.

3. The new co-living development comprises 16 rooms, a café, building manager’s office and communal outdoor space at 119 Booth Street (Co-Living Development). The communal indoor and outdoor spaces will be shared between both developments.
4. IDC proposes to retain affordable housing for the Lodgings Development and impose affordable housing restrictions on the Co-Living Development to cap rental rates of the rooms to the greater of:

(a) 30% of 120% of the median household income for Greater Sydney; or (b) Rent chargeable under the National Rental Affordability Scheme.

6. Accordingly, IDC submits that it proposes for all 82 rooms across both developments to be affordable housing as defined under s 1.4 of the EPA Act and s 13 of the State Environmental Planning Policy (Housing) 2021 (Housing SEPP). This is in dispute between the parties.

7. Through conditions of consent, IDC also proposes to modify conditions to the existing consents of the Lodgings Development to:

8. Facilitate use of both developments together as set out in the PoM;

9. Amend condition 1 of DA3650 to delete reference to married couples; and

10. Delete condition 18 of BA/1979/10234 to permit cooking facilities in bedrooms to rooms nominated on the architectural plans.

11. IDC proposes conditions to stage the development and ensure residents are temporarily relocated to another property operated by the Applicant for the same rent, where available, or to find comparable, subsidised temporary accommodation.

The site and context

9. The sites at 119, 121 and 125 Booth Street, Annandale are legally known as:

10. Lot 1 in DP 404947

11. Lot 1 in DP 131441

12. Lot 1 in DP 912129

13. Lot 17 in DP 654078 and

14. Lot 1 in DP 916473.

15. The site is irregular in shape and approximately 1,717m2 in size. The frontage along Booth Street is 54.6m.

16. Existing on site is the house-let-in-lodgings development, approved in 1970 and modified in 1982. The existing former Commonwealth Bank building on site, to be partially demolished, is not a heritage item. However the adjoining Annandale Post Office is a heritage listed site. Directly surrounding the site is a set of shops, low density residential development, a church and a petrol station. Within the visual catchment are the Annandale Local Shops.

17. The site has a split zoning, being primarily zoned R1 General Residential and a small part is zoned E1 Local Centre under the Inner West Local Environmental Plan 2022 (IWLEP).

18. The hearing commenced on site. The site viewing included observations of the streetscape, the existing development (including viewings of several rooms), walk over of the site and views of some of the objector’s properties from the subject site.

Key Issues

14. At the hearing, Council advised that most of the contentions had been resolved through joint conferencing of the experts, amendments to the DA and conditions. The following contentions in the Amended Statement of Facts and Contentions were pressed:

15. Contention 1 – Reduction of existing affordable housing.

16. Contention 2 – Non-compliance with floor space ratio.

17. Contention 10 – Public interest.

18. During the hearing, a dispute arose relating to the calculation of contributions.

19. As directed by the Court after the hearing, the parties provided contributions calculations which now form part of Exhibit P. The parties also submitted revised conditions of consent with commentary on disputed conditions, which are substituted for those at Exhibit Q.

20. I accept the parties’ agreement that all other contentions have been resolved through joint expert conferencing, amendments to the DA and conditions of consent.

Expert Evidence

18. Expert town planning evidence was submitted in a joint expert report (Planning JER) by Ms Kate Bartlett for IDC and Mr Eltin Miletic for Council. Oral evidence was adduced at the hearing.

19. Expert heritage evidence was submitted in a joint expert report prepared by Mr John Oultram for IDC and Ms Lisa Trueman for Council.

20. Expert waste management evidence was submitted in a joint expert report prepared by Mr Paul Fuller for IDC and Ms Emma Parker for Council.

Is there a loss of affordable housing?

21. Council presses contention 1 that the proposal results in an unacceptable reduction of affordable housing pursuant to s 47 of the Housing SEPP. Council’s central issue is whether the proposed works result in a loss of affordable housing for low income households, on the basis of the works that are proposed to the Lodgings Development. Council contends that having regard to s 47(2)(a), (b), (c), (d), (e) and (g), the loss of affordable housing cannot be mitigated by a monetary contribution. Council’s key concerns relate to subsections 47(2)(a), (b), (d) and (e) not being satisfied (including some related ancillary matters throughout s 47 of the Housing SEPP). Finally, it is contended that no information has been provided relating to the structural stability of the building, fire safety requirements or viability of the development.

22. Council submits that the definition of ‘affordable housing’ is a spectrum and provides for three separate categories of affordable housing pursuant to s 1.4 of the EPA Act and s 13 of the Housing SEPP. These separate categories are not mitigated by the proposed condition from the Applicant that all rentals will be broadly ‘affordable housing’. The EPA Act and Housing SEPP relevantly state the following in relation to affordable housing.

23. Section 1.4 Definitions of the EPA Act provides:

affordable housing means housing for very low income households, low income households or moderate income households, being such households as are prescribed by the regulations or as are provided for in an environmental planning instrument.

24. Section 13 of the Housing SEPP provides:

13 Affordable housing—the Act, s 1.4(1)

(1) In this Policy, a household is taken to be a very low income household, low income household or moderate income household if—

(a) the household—

(i) has a gross income within the following ranges of percentages of the median household income for Greater Sydney or the Rest of NSW—

(A) very low income household—less than 50%,

(B) low income household—50–less than 80%,

(C) moderate income household—80–120%, and

(ii) pays no more than 30% of the gross income in rent, or

(b) the household—

(i) is eligible to occupy rental accommodation under the National Rental Affordability Scheme, and

(ii) pays no more rent than the rent that would be charged if the household were to occupy rental accommodation under the Scheme.

25. Section 45 of the Housing SEPP states:

low-rental dwelling means a dwelling that was let at a rental level no greater than the median rental level during the relevant period in relation to a dwelling—

(a) of the same type, and

(b) with the same number of bedrooms, and

(c) in the same local government area.

26. Section 47 of the Housing SEPP states:

47 Reduction of availability of affordable housing

(1) Development for the following purposes, in relation to a building to which this Part applies, is permitted with development consent—

(a) demolishing the building,

(b) altering or adding to the structure or fabric of the inside or outside of the building,

(c) changing the use of the building to another use,

(d) if the building is a residential flat building—strata subdivision of the building.

(2) In determining whether to grant development consent, the consent authority must take into account the Guidelines for the Retention of Existing Affordable Rental Housing, published by the Department in October 2009 and the following—

(a) whether the development will reduce the amount of affordable housing in the area,

(b) whether there is available sufficient comparable accommodation to satisfy the demand for the accommodation,

(c) whether the development is likely to result in adverse social and economic effects on the general community,

(d) whether adequate arrangements have been made to assist the residents who are likely to be displaced to find comparable accommodation,

(e) the extent to which the development will contribute to a cumulative loss of affordable housing in the local government area,

(f) whether the building is structurally sound, including—

(i) the extent to which the building complies with relevant fire safety requirements, and

(ii) the estimated cost of carrying out work necessary to ensure the building is structurally sound and complies with relevant fire safety requirements,

(g) whether the imposition of an affordable housing condition requiring the payment of a monetary contribution would adequately mitigate the reduction of affordable housing resulting from the development,

(h) for a boarding house—the financial viability of the continued use of the boarding house.

(3) Sufficient comparable accommodation is conclusively taken not to be available if, for the 3 months occurring immediately before the development application is lodged, the average vacancy rate in private rental accommodation for Sydney, as published monthly by the Real Estate Institute of New South Wales, is less than 3%.

27. Council submits that IDC’s proposal, whilst a form of affordable housing, would lead to a loss of accommodation for ‘low income households’ currently available by the Lodgings Development.

Evidence

28. It was agreed by the experts that the existing Lodgings Development is a low rental residential building as defined by s 45 of the Housing SEPP. It is agreed that the proposed alterations to the Lodgings Development triggers s 47(2) and consideration of the Guidelines for the Retention of Existing Affordable Rental Housing, October 2009 (Retention Guidelines).

29. The planning experts also agree that the existing Lodgings Development is best described as a ‘boarding house’ for the purposes of considering the Retention Guidelines.

30. The planning experts agree that DA3650 and DA554/81 did not grant consent for self-contained rooms and relied on communal kitchen facilities on each floor, except for the self-contained room for the on-site manager.

31. It is also agreed that there is no condition on any of the existing consents to limit the rent of the development.

32. Mr Miletic, planning expert for Council, considers that there is a reduction of existing affordable housing. The Retention Guidelines state that there are less obvious reductions in existing affordable housing where the amount of accommodation is similar, but changes in the quality, type or tenure would result in accommodation no longer being available to the low rental market. That is the case in this DA. Further, the rule of thumb for low rental accommodation in the Retention Guidelines is the tariff level to qualify for land tax exemptions. In 2023, that tariff level was $291 per week. Mr Miletic disagrees with the approach that bedsits or studios are comparable, noting that the current approval does not permit self-contained dwellings.

33. Mr Miletic’s evidence is that the proposal is absent any information on the rental levels, occupancy and financial viability of the existing development in the relevant five year period. Therefore, it is not possible to consider the reduction and change of rental characteristics to determine the change in rental characteristics, value and income generating capacity of the development under s 47(2) of the Housing SEPP and Retention Guidelines. The assessment of the loss of existing low rental accommodation as a result of the changes and the viability of the development needs to be considered, including whether a contribution to mitigate the loss of affordable housing arises.

34. Mr Miletic’s evidence is that the existing Lodgings Development is not subject to any condition for rental caps or management by a community housing provider (CHP) as the existing building is low rental due to the condition of the building and standard of accommodation. The proposal should be managed by a CHP to ensure the proposed conditions and PoM can be enforced. It is unreasonable for Council to enforce these conditions of consent to ensure rents do not exceed the maximum allowed.

35. Mr Miletic’s evidence is that the proposed affordable housing conditions seek to address the reduction in existing affordable housing that will arise from the proposal to comprehensively refurbish the standard of accommodation and enable a significant increase from existing rental levels, which were as low as $100 a week at March 2022. The proposed condition would allow the private operator to determine the market value and apply a 20% reduction, which would be a significant increase from the current rent paid by existing tenants and displace current tenants.

36. Ms Bartlett, planning expert for IDC, says that the proposal retains the existing Lodgings Development, increases affordable housing by 19 rooms and seeks to impose affordable housing conditions on both developments that are not otherwise subject to such conditions.

37. Ms Bartlett’s evidence is that the Lodgings Development can currently charge rent without any cap. The Applicant has owned the site since 2022 and those rental records have been provided which show the median rental amount as being generally below a ‘bedsit’ or ‘studio’ in the Inner West LGA. These rents range from approximately $150 to $400 a week. Whilst a maximum rental cap is proposed, the characteristics of the Lodgings Development will still impose its own cap and such a condition does not mean that rents will be raised to this level. Those rent changes could occur now. The proposed condition imposes a maximum. In responding to questions on if the rooms are rented in the low income category, Ms Bartlett’s evidence is that the income levels for tenants were unknown and that the rental amounts charged in 2024 all exceeded that year’s tariff rate.

38. Ms Bartlett’s evidence is that the PoM and Social Impact Assessment prepared by The Planning Studio dated 25 November 2024 (SIA) provide details on the careful management of the temporary relocation of residents during the construction stage, including relocation in a nearby development owned by the Applicant or potential subsidies in nearby developments.

39. Ms Bartlett’s evidence is that the proposal does not result in any loss of affordable housing and instead increases affordable housing by 19 rooms. Accordingly, subsections 47(2)(c), (f) and (h) do not apply, as the proposal overall increases affordable housing. Further, the amended DA does not rely on fire safety upgrades, structural stability issues or viability concerns as reasons to support the application. Ms Bartlett relies on the Retention Guidelines that state that care is to be taken to ensure owners are not penalised for maintaining the value and income generating capacity of their asset through necessary upgrades. It is acknowledged that the vacancy rate means that there is no sufficient comparable accommodation in the locality, however maintains that there is no loss of affordable housing from the proposal.

40. Ms Bartlett’s evidence is that as the proposal increases, not decreases affordable housing, no contribution should be imposed.

Submissions

41. Ms Reid submits that the proposed works in the Lodgings Development are for the purpose of maintenance, providing accessible rooms, fire safety upgrades and modest increases to the amenity through some balconies and communal spaces shared with the co-living occupants. The Lodgings Development will essentially remain and increase by three rooms. 16 co-living rooms are proposed by the Co-Living Development, resulting in a total of 82 affordable housing rooms.

42. Ms Reid submits that there is no loss of affordable housing. Instead, the proposal increases affordable housing stock through the proposed rental caps that are consistent with the definition of affordable housing. The upgrades to the existing rooms are a modest refresh of the 1970’s building, involve four new kitchenettes, a new shared communal space with the Co-Living Development and fire safety measures. The communal spaces are not a significant upgrade, do not include amenities such as sauna or spa facilities and are located in an undercroft area. The plans indicate that a number of the existing lodging rooms already have self-contained facilities. The proposal includes a reduction of car parking spaces, in line with the general presumption of reducing car parking for affordable housing sites.

43. IDC submits that as detailed in the SIA, rents paid by existing residents is slightly more than bedsitter rooms in the Inner West LGA and significantly less than studio or 1 bedroom apartments in Annandale. As the size of the rooms and access to private ensuite facilities will generally not change, rents are unlikely to materially increase. Temporary interruption of any existing tenants is to be managed through staged construction and relocation to similar alternative accommodation.

44. Ms Reid submits that the 1970 and 1982 consents applying to the Lodgings Development are not subject to any condition imposing a maximum rental. Despite the lack of a condition, the Lodgings Development has provided accommodation for ‘low income earners’ since it was built. In accordance with Ord 70 of the Local Government Act 1919 (NSW), the premises were historically licenced as a ‘boarding/lodging house’. There is no reduction in rooms, no loss of affordable housing and a contribution should not be imposed. There is also no need or requirement for the rooms to be managed by a CHP.

45. Ms Reid submits that a number of the matters for consideration under s 47(2) of the Housing SEPP are not relevant as there is no loss of affordable housing. Therefore, there is no need to consider comparable accommodation, cumulative loss of affordable housing, structural integrity or development viability. To the extent that any tenants might be disrupted during construction, IDC proposes to find alternate accommodation in the conditions of consent.

46. Ms Reid submits that there is no evidence from Council that the proposal will substantially increase the amount of rent that can be charged. IDC is not required to demonstrate that either, given the proposed affordable housing rent condition across both developments.

47. Mr Harker for Council submits that the affordable housing definition in the EPA Act and Housing SEPP adopts a tripartite series of categories. Affordable housing can be for a very low income household or a low income household or a moderate income household. Mr Harker submits that in construing the provision, the definition should be placed into the provision and then construed in its context and purpose: Kelly v The Queen (2004) 218 CLR 216 at [103] (Kelly).

48. Mr Harker submits that the stated purposes of the affordable housing provisions (ss 14 and 15 of the Housing SEPP) include the need for affordable housing across the State, creation of mixed and balanced communities and a socially diverse residential population representative of all income groups. Construed in this context, providing accommodation for one of the categories is a form of affordable housing. But movement from one of those categories to another is still an impact and a loss of one of the defined categories of affordable housing.

49. Mr Harker submits that the Retention Guidelines recognise less obvious or modest changes to rooms may result in some or all accommodation no longer being available to the low rental market. Improvements aren’t opposed, but accommodation for people on low incomes need to remain available. Here, as a result of the proposed upgrades to the Lodgings Development and IDC’s conditions, there would be a loss of low income household affordable housing. The proposed alterations, improvement of facilities and IDC’s proposed conditions would allow rent to be charged to the level of a moderate income household.

50. Mr Harker submits that IDC has not addressed the potential loss of accommodation for low income households, as it adopts a global approach to the definition of affordable housing.

51. Mr Harker submits that the Applicant bears the persuasive burden to demonstrate that consent should be granted: see Australian Protein Recyclers v Goulburn Mulwaree Council [2006] NSWLEC 641 at [2]. Further, IDC has not provided evidence in relation to the potential increases in rent from the proposed upgrade works. In circumstances where IDC has the capacity to provide this evidence, less weight should be given to their submissions that there will not be a reduction in affordable housing for those in the low income bracket. Mr Miletic’s evidence is that there will likely be an increase in rent, however the extent of the increase is unknown. The assessment required by s 47 of the Housing SEPP therefore cannot be undertaken.

52. Council therefore submits that given the high demand for affordable housing stated by both experts, IDC should provide evidence that there will be no reduction in low income affordable housing. In the alternative, a condition should be imposed to limit rent to the low income / tariff level. The condition would allow increases, but not beyond the low income category.

Findings

53. There is no dispute between the parties that the Lodgings Development is a lawful use subject to the 1970 and 1982 consents, pursuant to s 4.70 of the EPA Act.

54. I accept the agreement of the parties that the existing Lodgings Development is a low rental residential building as defined under ss 45 and 46 of the Housing SEPP. I also accept that the Lodgings Development is best described as a boarding house for the purposes of the Retention Guidelines, as opposed to a residential flat building as it better meets the definition of a boarding house. The existing development provided lodgers with accommodation for more than three months with shared facilities. It did not provide rental accommodation consistent with the definition for a low rental residential flat building.

55. I accept the parties’ agreement that s 47 applies as the proposal seeks to alter or add to the structure or fabric of the inside or outside of the building. In this instance, alterations are proposed to the inside and outside (s 47(1)(b)).

56. The Retention Guidelines overarchingly seek to retain or mitigate the loss of existing affordable rental housing. They also emphasise that a balanced consideration is required:

‘A balanced consideration of these criteria is required. A development assessed as having poor outcomes under some of the criteria may nonetheless warrant approval if these are outweighed by positive outcomes under the other criteria…’ (Retention Guidelines, p 5).

57. Though the criteria referred to is from the repealed State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPP ARH), these have been replicated in relatively similar terms under the Housing SEPP in s 47, with some minor amendments to the wording of some criteria.

58. Subsection 47(2) of the Housing SEPP requires that the Retention Guidelines and the criteria of the subsection must be taken into account prior to granting development consent.

Are there categories of affordable housing?

59. I accept Mr Harker’s submissions that the loss of one of the subcategories, even from shifting into another subcategory of affordable housing, is a loss of affordable housing. I make this finding on the basis of:

60. The specific delineation of three categories of affordable housing in the definition of s 1.3 of the EPA Act and s 13 of the Housing SEPP.

61. That the provision should be read with the definition and then construed in that context (Kelly). Whilst ss 14 and 15 of the Housing SEPP are concerned with the imposition of conditions for an affordable housing contribution or land dedication under s 7.32 of the EPA Act, I accept that the principles of the Housing SEPP at s 3 seek to mitigate the loss of affordable housing, as defined. Therefore, s 47(2)(a) is construed as requiring consideration of whether the development will reduce the amount of affordable housing (as defined in s 1.3 of the EPA Act and s 13 of the Housing SEPP). I accept that a loss of rental accommodation for low income households to moderate households would be a loss of affordable housing.

62. On this basis and for the reasons detailed under my consideration of s 47(2) of the Housing SEPP and the Retention Guidelines, I accept that the proposal would result in a loss of some affordable housing for low income households.

63. However, I find that the potential loss of some affordable housing serving those households is not fatal to the proposal. Ultimately, the proposed development will result in an increased amount of overall affordable housing, from 63 rooms to 82 rooms. The Retention Guidelines detail that an increase in new affordable housing is a relevant consideration and one that may neutralise any loss of low rental accommodation. In addition, whilst some upgraded lodging rooms will likely increase in cost, many lodging rooms remain as existing. As I set out below, I accept that the proposed loss of some affordable housing is sufficiently offset by the increase in affordable housing proposed. I also set out my consideration of s 47(2) of the Housing SEPP and the Retention Guidelines below.

Whether the development will reduce the amount of affordable housing in the area (s 47(2)(a) of the Housing SEPP)

62. This criterion is described, unsurprisingly, as the more fundamental element of the criteria and is also the key issue raised by Council.

63. I accept Mr Miletic’s evidence, consistent with the Retention Guidelines, that less obvious changes can result in some or all rental accommodation no longer being available to the low rental market. Some of the proposed works are squarely considered in the Retention Guideline examples, including room en-suite facilities, that would increase rents/tariffs beyond the reach of low income residents.

64. I also accept that whilst there is no condition to limit the amount of rent that can be charged, the modest conditions of the rooms serves as a cap, as demonstrated by the rental history within the relevant period (s 45 of the Housing SEPP).

65. On the evidence presented at the hearing, it is difficult to determine with certainty whether the proposed alterations will increase the amount of rent and therefore, whether those rooms would be unavailable to low income households. I accept Mr Harker’s submissions that IDC had the capacity and ability to provide such evidence but chose not to. This evidence would have better assisted consideration of this key issue. However I accept that there is sufficient evidence to enable consideration of s 47(2)(a) of the Housing SEPP because:

66. There is agreement between the planners that the rental information and median household data is known, and that the rooms were rented as a low rental residential building in the relevant period (Exs M, O, 2, 3 and 7).

67. Whilst the existing tenant’s income is not known, the rental data shows that the rent paid is within the amount affordable for a low income household based on the median household income for Greater Sydney (Ex 7) and the definition of affordable housing.

68. The proposal is clear about which rooms are proposed to be upgraded.

69. The proposed rent is to be capped to affordable housing for moderate households.

70. The Retention Guidelines provide adequate guidance on what will likely increase the rent of rooms, which has been considered by the experts.

71. On the available evidence and consideration of s 47(2)(a) of the Housing SEPP and the Retention Guidelines, I accept that the proposed balconies along the front façade to 21 rooms, upgrades to provide self-contained facilities including some accessible rooms (as shown in yellow on the architectural plans) and a new communal area would have some impact and likely increase the rent that could be charged.

72. I accept Mr Miletic’s evidence that the Retention Guidelines detail that alterations such as providing ensuite facilities may increase rent beyond the reach of low income residents. These changes increase the amenity and changes the quality and type of accommodation provided. I accept Mr Miletic’s evidence and find that the amended DA proposes similar amenity increases, to the extent of the proposed kitchenettes/ensuites and balconies, that would likely lead to an increase in rent as it changes the quality and type of accommodation.

73. To a lesser extent, I accept that the proposed communal areas may also have the impact of a rental increase. I accept Ms Reid’s submissions that the communal areas are modest. At the site view, the existing rooms shown to the Court and parties were also quite modest. The communal areas would be shared between a number of rooms, therefore any increase of rent to any individual room as a result of this increased amenity is also likely to be modest. There are existing communal/kitchen areas in the Lodgings Development, and I accept that the proposed modest communal areas would not meaningfully change the quality or type of accommodation offered.

74. I accept Ms Reid’s submissions that the reduction in car parking from 29 to 18 spaces is a relevant factor. I find that car parking is a factor in the type and quality of accommodation provided, and this is reflected in the rental data provided in Ex O, where car parking is rented at an additional cost to the tenant/lodger. It follows that the proposed reduction in car parking would lead to a reduction in rent for rooms that were coupled with or chose to take up a car parking space.

75. Whilst the lift is an upgrade, I consider this to primarily serve the new Co-Living Development and also provides a necessary upgrade to facilitate accessible access to both developments. I consider the lift to be a neutral factor and necessary maintenance upgrade.

76. Not all of the existing rooms are proposed to be upgraded. The architectural plans do not indicate ‘new structures’ to 37 rooms, where kitchenettes are shown in blue. The architectural plans show in yellow what the proposed works are, and therefore, any self-contained structures shown in blue in those rooms do not form part of the proposed development. I have not considered these as proposed upgrades. Whether those rooms have or need consent for the kitchenette facilities shown on the plans is a separate matter for the parties. Accordingly, I find that 37 rooms will be maintained in their current condition and with consideration of my findings above, will generally be maintained as affordable housing for low income households.

77. On the evidence available, I accept that the rooms that will have alterations or upgrades with kitchenettes/ensuites and/or balconies will change the quality or type of accommodation in a manner that would likely result in increased rents given the increased amenity provided (some rooms will benefit from multiple types of upgrades).

78. Relying on the evidence of the planners and Retention Guidelines in lieu of valuation or similar evidence, I have considered the worst case scenario loss, being a loss of 26 rooms from low income households to moderate income affordable housing rooms. The test of ‘significantly higher rents’ does not apply, as the Lodgings Development is not characterised as a ‘low rental residential flat building’ but is a low income boarding house by the Retention Guidelines.

79. I accept Ms Reid’s submissions that the loss of affordable housing does not mean the DA should be refused. The Retention Guidelines relevantly state:

‘Finally, consideration must be given to any new affordable accommodation being provided on the site which offsets the loss of existing low rental accommodation on the site. This may result in a nil net loss or possibly a gain in low rental accommodation available on the site.’

75. The proposal squarely falls within this consideration. An additional three rooms are proposed for the Lodgings Development and the Co-Living Development will provide an additional 16 rooms subject to a condition to cap rents to the affordable housing definition.

76. In balancing these matters for consideration, I accept that overall, the loss of affordable housing for low income households has been offset on the site by the increase in overall affordable housing, as envisaged by the Retention Guidelines.

77. As I have found that the loss of some affordable housing rooms for low income rooms has been offset by the proposed increase in global affordable housing rooms, the Retention Guidelines foreshadow that this fundamental criteria will affect how the rest of the criteria is considered. The rest of the Retention Guidelines are focused on mitigating the loss of affordable housing and providing adequate arrangements for residents to find comparable accommodation, which is limited in these circumstances. Section 47(2) requires that these matters be taken into account.

Whether there is available sufficient comparable accommodation to satisfy the demand for the accommodation (s 47(2)(b) of the Housing SEPP)

78. The Retention Guidelines stipulate that where a vacancy rate is less than 3% (as published by the Real Estate Institute of NSW), than no weight can be given to evidence purporting to establish that there is sufficient comparable accommodation.

79. It was agreed in the evidence, and I accept, that given the Rental Vacancy Rate in Sydney was 1.5% at the time of the hearing, that there is not sufficient comparable accommodation in the locality. In considering this aspect, I accept that the overall increase in affordable housing offsets the lack of available comparable accommodation.

Whether the development is likely to result in adverse social and economic effects on the general community (s 47(2)(c) of the Housing SEPP)

80. The SIA sets out that the development is likely to have a low to medium long term positive social impact on Annandale and the Inner West community. The SIA forms this view on the basis of an overall increase in affordable housing, new and improved communal areas and retention of the Lodgings Development. The SIA also proposes comparable accommodation for residents during the construction phase.

81. I accept Ms Bartlett’s evidence and recommendations in the SIA that any impacts on residents during the construction phase can be managed through the proposed relocation to another comparable development or through rental subsidies to other rentals within a 10km area. I accept Ms Bartlett’s evidence that the benefits of the amended DA include an additional 19 rooms, improved accessibility within the development and an enforceable cap on the maximum rent that can be charged within the affordable housing range.

82. There will be some negative social and economic impacts. Some low income residents may no longer be able to reside in the Lodgings Development or the area, or may face paying more for housing and have less to spend on other essentials and living expenses. In the current circumstances of the NSW housing market, these impacts are not to be treated lightly. This needs to be balanced with the overall benefits to the community through an increase of 19 affordable housing rooms. I accept Ms Bartlett’s evidence that the proposed cap will not automatically mean a rent increase to that figure, which the Applicant could do now. I find that the retention of a significant number of the Lodgings Development rooms and the provision of more affordable housing on site to house more people within affordable housing accommodation will overall have positive, not adverse, social and economic effects on the general community.

Whether adequate arrangements have been made to assist the residents who are likely to be displaced to find comparable accommodation (s 47(2)(d) of the Housing SEPP)

83. For the reasons detailed previously, I accept that during construction, comparable accommodation during construction will be provided for. Condition 54 enforces those details, and I accept Council’s version of the condition that the relevant staging and resident relocation plans are to be provided to Council for approval, not the certifying authority. Council is better placed with the expertise and vested community interest to ensure this occurs in the appropriate manner, rather than a certifier, given the uniqueness of such a condition.

84. IDC did not propose any arrangements for permanent alternative accommodation as it considered that there was no loss of affordable housing. The SIA identifies the demographics of many of the existing residents, some of whom may be at a competitive disadvantage as a result of their age (the Retention Guidelines include those who are elderly, unemployed, living with a disability or on welfare benefits) (pp 16 and 19).

85. Given my findings that the upgrades to a number of rooms are likely to result in a rental increase beyond the low income household range, with consideration of this provision and the Retention Guidelines, I will make a direction for the parties to provide a condition of consent that incorporates some or all of the options recommended in the Retention Guidelines. This is appropriate in the circumstances as:

86. A majority of rooms will be retained without any change.

87. The proposal will overall increase affordable housing.

88. The Applicant operates other affordable housing developments.

89. The SIA identifies other affordable housing developments in the area.

90. The SIA identifies some residents who may be at a competitive disadvantage, but overall details a tenant mix of working professionals at various ages and international students. The SIA details that residents would be given a first right to return to the premises after construction works, which may be acceptable to some or all tenants in their circumstances on a permanent basis, even if some of the upgraded rooms have increased in rents.

91. The Retention Guidelines recognise that conditions of consent may be appropriate to create the displacement plan.

92. I would note, but don’t rely on the below observations as they were not put to the parties during the hearing, that there were a range of rents charged within the existing Lodgings Development. Rents ranged from $100 to $460 per week and increased over 2023 to 2024 (Ex O). It may be the case that some residents may elect to return to their room (as per the proposed temporary relocation plan during construction) or may wish to reside in one of the upgraded rooms or in a co-living room. If those residents choose an upgraded room or co-living room, there would be less demand on those rooms not being upgraded for existing tenants.

93. After consideration of s 47(2)(d) of the Housing SEPP, the Retention Guidelines and the above, I find that there is sufficient evidence to direct a condition of consent for a ‘Displaced Resident Plan’ that is consistent with the Retention Guidelines and at a minimum, incorporates the following:

94. First right of return for existing residents to firstly, the Existing Lodgings Development and as second option, the Co-Living Development.

95. Extension of the period of notice to vacate the premises beyond 60 days.

96. First rights to the provision of accommodation in other premises in the same ownership/management or by arrangement with other owners/managers.

97. Where accommodation cannot be provided for within the proposed development, payment of relocation costs or equivalent one-off payment.

The extent to which the development will contribute to a cumulative loss of affordable housing in the local government area (s 47(2)(e) of the Housing SEPP).

87. I accept Ms Bartlett’s evidence and Ms Reid’s submissions that, when balancing the net increase of 19 affordable rooms, the extent of some of the upgrades and conditions of consent to restrain the development as affordable housing up to the moderate range, means that the cumulative loss is acceptable in these circumstances.

Whether the building is structurally sound (s 47(2)(f)); and

For a boarding house – the financial viability of the continued use of the boarding house (s 47(2)(h) of the Housing SEPP).

88. I have dealt with these matters together, as their consideration is similar. Whilst it was somewhat in contention that these matters hadn’t been addressed, I have considered these provisions and accept IDC’s submissions that structural stability issues, fire safety upgrades and the feasibility of the development are not relied on to justify the proposed works. These criteria therefore have very limited application.

89. I would note that the proposal is accompanied by a Building Code of Australia Capability and Fire Safety Upgrade Report prepared by Incode Solutions dated 20 November 2024 (BCA and Fire Report), that details recommendations for fire safety upgrades. These upgrades as well as upgrades to provide equitable access through the lifts are positive aspects of the proposed development.

Whether the imposition of an affordable housing condition requiring the payment of a monetary contribution would adequately mitigate the reduction of affordable housing resulting from the development (s 47(2)(g) of the Housing SEPP).

90. The Retention Guidelines state that a balanced assessment of the other criteria will usually find that a development satisfies some, but not all criteria, and with varying degrees of impacts. Indeed, this proposal satisfies some, but not all criteria.

91. I am satisfied that in the circumstances of this case, the imposition of a condition pursuant to s 7.32 of the EPA Act and s 48 of the Housing SEPP is not warranted. I accept Ms Barlett’s evidence and Ms Reid’s submissions that the proposed development proposes an overall increase in affordable housing. There is no requirement for Co-Living Development to be affordable housing or provide any rental cap. The proposal to cap rent to the Co-Living Development provides a real increase of affordable housing. To a lesser extent, I accept the evidence that there are no conditions to cap rent on the existing Lodgings Development, however I also accept that the type and characteristics of the Lodgings Development impose their own restrictions.

92. The rental cap would be legally enforceable through conditions of consent. Whilst new boarding houses under the Housing SEPP require a CHP to manage the housing, and CHP’s are recognised as best practice to manage affordable housing, there are no restrictions on the private market also providing affordable housing. Conditions of consent are legally enforceable by Council and any owner of the site would be required to demonstrate compliance. To this end, I will direct the parties to provide a proposed condition on record keeping of rents and salaries for tenants to ensure the condition can be enforced.

93. On the basis that there is an overall increase in affordable housing and that the site will provide a diversity of affordable housing, I find that an affordable housing contribution should not be imposed.

94. Finally, having considered all of the matters under Chapter 2, Part 3 of the Housing SEPP, I find that there are no reasons to refuse the application on this basis.

95. As Council’s Contention 10 public interest was pressed on similar grounds, I find that the proposal is in the public interest as it provides increased affordable housing and diversity of affordable housing on site. In terms of setting an adverse precedent, each development needs to be assessed on its own merits. In this case, the retention and provision of a diverse range of affordable housing is in the public interest. In relation to the community submissions, I have addressed these further below. I would also note that an issue raised by a community objector does not make it an issue in contention unless squarely raised by a Respondent in its contentions: see Billyard Ave Developments Pty Limited v The Council of the City of Sydney [2025] NSWLEC 22 at [78] to [79].

Should the breach to floor space ratio be supported?

96. Council pressed that Contention 2 in relation to the proposed breach to cl 4.4 of the IWLEP floor space ratio (FSR) had not been satisfied. At the hearing, the contention was narrowed to a disagreement on whether there were sufficient environmental planning grounds.

97. The allowable maximum FSR for 121-125 Booth Street is 0.6:1. The maximum allowable FSR for the part of 119 Booth Street zoned R1 is 0.66:1 including the bonus for the co-living development. The allowable maximum FSR for the part of 119 Booth Street zoned E1 is 1:1 including the 10% bonus for the gross floor area of the co-living development.

98. The existing development on121-125 Booth Street has a gross floor area (GFA) of 2,070m2, equating to an FSR of 1.81:1. The existing development has a 202% variation to the current maximum FSR. An additional 45m2 is proposed, which would result in a total variation of 209%.

99. The E1 portion of 119 Booth Street proposes a variation of 17.86m2 or 22.09%.

100. The R1 portion of 119 Booth Street proposes a variation of 269.62m2 or 81.29%.

101. Clause 4.4 of the IWLEP FSR states:

(1) The objectives of this clause are as follows—

(a) to establish a maximum floor space ratio to enable appropriate development density,

(b) to ensure development density reflects its locality,

(c) to provide an appropriate transition between development of different densities,

(d) to minimise adverse impacts on local amenity,

(e) to increase the tree canopy and to protect the use and enjoyment of private properties and the public domain.

(2) The maximum floor space ratio for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map.

…

(2B) The maximum floor space ratio for development for the purposes of residential accommodation is as follows—

…

Where the site area is greater or equal to 450m2 - 0.6:1

102. Clause 4.6 of the IWLEP exceptions to development standards states:

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 to development that contravenes a development standard unless the consent authority is satisfied the applicant has demonstrated that—

(a) compliance with the development standard is unreasonable or unnecessary in the circumstances, and

(b) there are sufficient environmental planning grounds to justify the contravention of the development standard.

103. An Updated cl 4.6 Variation to FSR has been prepared by The Planning Studio dated 19 May 2025 (written request) (pursuant to s 35B of the Environmental Planning and Assessment Regulation 2021 (NSW)). The written request sets out the Applicant’s justification to vary the development standard.

Evidence

104. Mr Miletic for Council says that the existing development significantly exceeds the FSR and the further breach to the FSR for both sites is excessive. The environmental planning grounds relied on by IDC is not agreed, as the proposal is not for affordable housing. Consistent with the evidence given for Contention 1, Mr Miletic says that the co-living rooms are not affordable housing and they will not be managed by a CHP. If the new development was defined as a boarding house under the Housing SEPP, which would be eligible for a 25% FSR bonus, it would be agreed that the development would be for affordable housing. Further, the additional communal living area is not required for the existing Lodgings Development when assessed against the now repealed ARH SEPP.

105. Ms Bartlett for IDC relies on the written request, which details the following justification to vary the FSR development standard.

The written requests – 121-125 Booth Street and 119 Booth Street

106. The site is subject to two zonings and two FSR’s and the calculations are complex. The written request is split into three variation requests. I have considered each one, but will deal with the requests together, as the grounds for each precondition are generally the same and the only contention is whether there are sufficient environmental planning grounds.

Compliance with the development standard is unreasonable or unnecessary in the circumstances (cl 4.6(3)(a) of the IWLEP)

107. The written requests rely on the following justification:

108. The existing 1970 and 1982 consents are subject to a condition that FSR is not to exceed 2:1, which would equate to 2,282.52m2 or 233% variation.

109. The proposed FSR is below the condition of 2:1. The current as-built GFA of 2,070m2, as calculated in accordance with the IWLEP, results in an FSR variation of 202%.

110. The proposed additional GFA of 45m2 is still less than the 2:1 FSR condition imposed under the existing consents.

111. The increase in FSR allows for new indoor and outdoor facilities for existing and future residents and the overall upgrades will improve the existing condition of the development.

112. The written request utilises the often cited decision of Preston CJ in Wehbe v Pittwater Council [2007] NSWLEC 827 (Wehbe) at [42] to [43] to demonstrate that compliance is unreasonable or unnecessary, as the objectives of the development standard have been met for the following reasons:

(a) The provision of additional affordable housing on site. (b) The proposed upgrades and increased amenity to the existing building. (c) The size and scale of the new two storey built form is consistent with low density dwellings and the surrounding built form. (d) The stepping of the new built form to allow the development to transition between the different densities, zones and heritage item. (e) The non-compliant FSR parts of the buildings do not increase overshadowing or visual and acoustic impacts. (f) The landscaping has been increased from 77m2 to a compliant 299m2.

Sufficient environmental planning grounds to justify the contravention of the development standard (cl 4.6(3)(b) of the IWLEP)

108. The written request relies on the following environmental planning grounds:

109. Provision of an additional 19 affordable housing rooms across both developments.

110. Retention of the existing building that is already at 1.8:1 where 0.6:1 is now the maximum. Any redevelopment will not be able to achieve the current yield on site.

111. The current consents allow an FSR up to 2:1.

112. Improvements to the amenity of the existing Lodgings Development.

113. Fire and building upgrades to the existing Lodgings Development.

114. Increased landscaping and removal of hard stand areas.

115. Compatibility with existing surrounding development and as agreed by the heritage experts.

116. Lack of amenity impacts from the variations.

117. Dual zoning of the site.

Findings

109. The calculations of the FSR breaches are complicated, as a small part of the site is a different zoning with a different FSR. The method of the FSR calculations was not in dispute between the parties. The only dispute is whether there are sufficient environmental planning grounds to justify the contravention of the standard.

110. Environmental planning grounds must be ‘sufficient’ in order to justify convening the development standard: see Initial Action Pty Ltd v Woollahra Municipal Council [2018] NSWLEC 118 at [23] to [24].

111. The focus is on the contravention, not the development as a whole: see Four2Five Pty Ltd v Ashfield Council [2015] NSWCA 248 at [15].

112. I am satisfied that the variations relate to the provision of affordable housing, which is a sufficient environmental planning ground.

113. I accept Ms Reid’s submissions that affordable housing can be provided by private entities. The Housing SEPP facilitates, incentivises and regulates some forms of affordable housing (amongst other development types). However, it is not the only source that can facilitate affordable housing. IDC has proposed a development, to be privately managed, that meets the definition of affordable housing through capped rents in accordance with s 1.4 of the EPA Act and s 13 of the Housing SEPP.

114. The Housing SEPP facilitates co-living housing as diverse housing, not affordable housing. However, IDC’s proposed PoM and conditions seek to cap rent for the rooms to the maximum household amount defined as affordable housing under s 1.4 of the EPA Act and s 13 of the Housing SEPP. The Lodgings Development will also be subject to the same rental cap and has a history as providing affordable housing. I accept on this basis that both proposed developments are affordable housing.

115. Further, consent would be needed to remove the proposed affordable condition in the future. If that were to occur and assuming the Housing SEPP or an equivalent exists at that time, a consent authority would need to consider a reduction in affordable housing in determining whether to grant consent.

116. There is no dispute between the parties that IDC’s proposed condition to enforce their rental cap proposal is unlawful. In terms of enforcing the condition, there is no requirement for the proposal, or all affordable housing, to be managed by a CHP. I accept to an extent that it should not be Council’s role to proactively ensure that the conditions are being complied with. However, it must be assumed that a proponent will comply with the conditions of consent.

117. To this end and to make any enforcement a more straight forward task should Council become aware of an issue, I will direct the parties to draft a condition of consent that records of rental payments and each tenant’s household income are to be kept for at least five years from every rental. This should be straight forward, as most rental applications require proof of income. These records are to be made readily available to Council on request.

118. Finally, the proposed FSR variations all relate to affordable housing, whether in the form of actual rooms or communal areas, these are all for the purpose of providing affordable housing. Accordingly, I accept that IDC has demonstrated that the proposed variations to cl 4.4 FSR have sufficient environmental planning grounds (s 4.6(3)(b) of the IWLEP).

119. As a precondition to granting consent, I must also be satisfied that compliance with the development standard is unreasonable or unnecessary in the circumstances (s 4.6(3)(a) of the IWLEP). I accept the agreement of the parties that compliance is unreasonable or unnecessary in these circumstances as:

120. The circumstances are unique in that the existing development significantly exceeds the FSR on site.

121. The FSR variations meet the objectives of the development standard in that:

(a) Objective (a) is instructive about what the FSR control does. (b) The density of the variations are consistent with the locality, with consideration of its location, buildings directly across the street, the heritage listed post office and location in the visual catchment of the shopping strip (objective (b)). (c) The variations facilitate a built form transition and rear setback to the low density residential properties to the north and heritage buildings to the east. The variations do not increase the height of the existing Lodgings Development along the north, north-west and west elevations (objective (c)). (d) There are no adverse impacts on local amenity from the breaches. Privacy screens have been added to shield privacy concerns and the bulk of the variations are further setback from the rear boundary. The indoor communal open spaces that contribute to the variation will not have any privacy impacts and minimal acoustic impacts given their location, enclosed nature and modest kitchen / dining facilities (objective (d)). (e) The existing site primarily comprises built form and concrete areas. The development as a whole increases landscaping from 77m2 to 299m2, and critically, the proposed variations do not impede the increased landscaping. The existing tree canopy on site and adjoining the site in either private or public land are all proposed to be protected and will not be impacted by FSR variations (objective (e)). With consideration of objectives (e) and (d), the variations do not impact the use or enjoyment of private properties or the public domain.

120. The justification given in relation to building upgrades and similar matters are not accepted, as they do not relate to the variation and are simply general benefits of the development.

121. For these reasons, I am satisfied that IDC has demonstrated that cl 4.6(3) has been met and that the proposed variations to the FSR should be allowed.

Applicable development contributions

122. Arising during the hearing was a dispute on the applicable development contributions payable under the Inner West Local Infrastructure Contributions Plan 2023 dated 20 February 2023 (Ex P) (Contributions Plan).

123. The applicable sections of the Contributions Plan are summarised below:

124. Where a development results in a net population increase, a s 7.11 contribution is required.

125. The net population increase is determined by the existing residents being subtracted from the new residents, utilising Table 2 – Occupancy rate to calculate net increase in population (p 23).

126. Occupancy rates for co-living housing, rooms less than 16m2 are calculated at one occupant per room. Rooms above 16m2, are calculated at two occupants per room. These figures are to include managers rooms (p 23).

127. The s 7.11 contribution is then calculated as the net increase in residents x per residents contribution rate, as indexed (p 27).

128. Table 4 Section 7.11 contribution rates at October 2021 calculates ‘other residential uses on a per resident, per occupancy rates in s 2.1’. The contribution rate per resident is $10,021 (p 28).

Submissions and evidence

124. Council contends that the contributions amount payable is $319,277 because:

125. The ‘per room rate’ submitted by IDC should be a ‘per occupant rate’. The applicable rate for co-living accommodation is based on the number of residents.

126. Mr Miletic’s evidence is that the number of existing rooms less than 16m2 is 9. This is on the basis of the 1970 consent, which stated there were 9 single person rooms. The 1970 consent and 1982 consent stipulate that there are 54 double person rooms. Mr Miletic’s evidence was that these figures on the consent were cross referenced and measured against the plans. Council ultimately submitted on the basis of further plan measurements that the existing rooms comprised 7 rooms less than 16m2 and 56 rooms greater than 16m2 (contributions calculator received 20 June 2025).

127. Mr Miletic’s evidence is that the new rooms include 18 rooms under 16m2 and 64 rooms greater than 16m2.

128. Council submits that the difference is what the existing credit should be and the application of the Environmental Planning and Assessment (Local Infrastructure Contributions) Direction 2012 dated 21 August 2012 (Ministerial Direction).

129. Council submits that if the Ministerial Direction were applied, the maximum contribution for the 19 new rooms would be $380,000 (19 rooms x $20,000).

130. IDC submits that the contributions payable is $221,905.42 because:

131. The architect measured the existing rooms as 6 less than 16m2 and 60 rooms greater than 16m2. The contributions calculations provided on 20 June 2025 reflect the same figures. IDC’s calculations on that same date show an increase of 16 rooms.

132. The Ministerial Directions impose a $20,000 cap for dwellings, defined in cl 5(1)(a) as:

Dwelling means a room or suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile.

3. The rooms can be defined as dwellings (see: SHMH Properties Australia Pty Ltd v City of Sydney Council [2018] NSWLEC 66 at [63]). The contributions per room or dwelling, as indexed, therefore cannot exceed $20,000. On this basis, the contributions figure is the one put forward by IDC.
4. A condition of consent should be imposed to adjust the contributions payable should the gross floor area for the rooms do not accord with the calculations put forward by the Applicant.

Findings

126. The calculations have been difficult to discern based on the inconsistent data provided by IDC and some colour coding errors on the proposed and existing works shown on the architectural plans.

127. I firstly accept Council’s evidence about the existing rooms. For reasons unknown, IDC’s calculations of the existing rooms in Ex O and their contributions calculator received 20 June 2025 total 66. Despite IDC’s solicitor clarifying that the existing rooms should be a total of 63, the 66 rooms calculation has carried over into IDC’s calculations. IDC’s proposed number of rooms also deviate from the evidence during the hearing, which was agreed as 19 new rooms, not 16 rooms as shown in the Applicant’s contributions calculations spreadsheet received 20 June 2025 (Ex P).

128. Further, the evidence of the planners considered that there were 63 existing rooms, with an increase of 19 new rooms across both developments, to total 82 rooms. The written request also relies on the provision of 19 new affordable housing rooms.

129. I accept Mr Miletic’s evidence that the existing consents in 1970 and 1982 detail a total of 63 rooms and I accept his revised measurements that 7 of those rooms are below 16m2. Accordingly, the existing credits are for 7 single rooms under 16m2 and 56 double rooms (totalling 119 residents).

130. I accept that the increase in the number of rooms is 19, consistent with the evidence provided during the hearing. I accept Council’s submissions that these new rooms comprise 11 rooms under 16m2 and 8 rooms above, on the basis of their submitted calculations and as best as can be cross referenced against the architectural plans.

131. I also find that Council’s calculations of contributions are consistent with the Contributions Plan. The calculations are based on increases in residents. The Contributions Plan details that this is determined through subtracting the existing residents from the new residents at a rate determined by Table 2. Table 4 determines the monetary rate per resident, which is agreed as $10,021 prior to indexation.

132. Council’s calculations show this figure, indexed, to be $319,277. When that resident calculation is divided by the number of new dwellings (19), that equates to approximately $16,803 per room.

133. Therefore, both the Contributions Plan’s methodology of calculating contributions through an increase in residents and Council’s approach do not exceed or conflict with the Ministerial Direction. Annexure A of the Contributions Plan also reinforces this approach.

134. I accept Council’s approach and associated conditions of consent.

Disputed conditions of consent

135. Several conditions of consent are in dispute between the parties, which are considered below.

136. Condition 1 provision of affordable housing. Consistent with my findings in Contention 1, IDC’s condition is to be adopted.

137. Condition 3 to provide a manager’s room is disputed as:

138. IDC submits that the issue of a manager’s room was not in contention, evidence was not led on this issue and that the development will be managed in accordance with the PoM. The PoM provides that a Manager will be on-site during business hours and residents will be provided a 24 hour phone number. A working space for the manager has been provided (s 69(d) of the Housing SEPP). It is submitted that contributions would also need to be recalculated if a manager’s room was provided.

139. Council submits that the manager’s room is necessary to reflect the terms of the approval of the house-let-in-lodgings, which is consistent with the previous requirements for a boarding house with 20 or more lodgers. A manager’s room has no impact on contributions.

140. I mostly accept IDC’s submissions. The issue of providing a manager’s room was not raised as a contention and if a condition was going to be proposed to this effect, IDC should have been given fair notice in the amended Statement of Facts and Contentions. Further, to the best as I could read it, there are no requirements under the existing consents to provide a manager’s room, though I accept a version of the plans at Ex K shows a room. The requirement under the Housing SEPP to provide a working space for a manager has been shown on the plans and in the PoM. I find that condition 3 should be deleted and that the proposed manager arrangements set out in the PoM and architectural plans are acceptable.

141. Conditions 49 and 49A relating to s 7.11 of the Contributions Plan are disputed. For the reasons I have previously given regarding contributions, I accept Council’s wording. I do accept condition 49A should be refined to clarify that it only applies to room G1.18 and the proposed rooms, in order to ensure that compliance with the condition doesn’t result in works to rooms that are not proposed to be changed.

142. I have previously considered the proposed Condition 54 regarding arrangements for existing tenants. Council is best equipped with being satisfied that the Construction Management Plan, Staging and Resident Relocation Plan is reasonable and fairly considered for existing residents.

143. Though not in dispute, it was raised during the hearing about how the lift could be accessed by the DDA rooms in the Lodgings Development as the fire door might be a barrier. In response to a question from the Court, the Applicant indicated it would accept a condition of consent to ensure the fire doors were automated and could therefore be used by everyone.

Public Submissions

141. The original development application made to Council was notified from 22 November 2023 to 22 December 2023. Five submissions were received. Two submissions were received in support of the proposal. During the hearing, Council raised that an objector had requested that their submission be pressed in their absence and submitted a further objection against the proposal.

142. I have carefully considered all the submissions in support and objections raised in the submissions. For the following reasons, I accept that the issues raised have been mitigated by the proposal or do not warrant refusal of the application.

Loss of cheap / affordable housing

143. This issue is addressed from [21] in this judgment.

Excessive floor space area

144. This issue is addressed from [96] in this judgment.

Adequate communal areas

145. The proposal increases the small amount of communal areas currently available to the existing Lodgings Development and for the new works, provides increased communal areas to meet the requirements of the planning controls in the Housing SEPP. These areas are therefore sufficiently sized to meet the needs of the residents. The architectural plans demonstrate adequate cooking and laundry facilities, and it is open for any resident to utilise laundromat services should they wish to do so.

Small size and location of rooms

146. The size of the proposed or upgraded rooms are consistent with the minimums in the Housing SEPP planning controls. The size of the existing rooms cannot be considered as they already have consent. The location of rooms opposite each other along a hallway is typical of the type of development.

Tree protection and landscaping

147. The DA is supported by an Arboricultural Impact Assessment prepared by Bluegum dated April 2025 and a tree protection plan that detail that no trees on the site or surrounding sites will be affected subject to protection zones. These recommendations and protection zones are reinforced by conditions of consent.

148. The proposed landscaping is a sizeable increase from the existing landscaping on site and complies with Council’s planning controls in the IWLEP.

Waste management

149. The waste issues raised about insufficient waste and recycling arrangements were discussed by the waste experts for Council and IDC during joint expert reporting. The experts agreed on the number of bins required, how to manage bulky waste, residential and commercial waste disposal, which have been incorporated into conditions of consent adopted by the parties. I accept the experts and parties’ agreement that waste management will be adequate.

Ground floor café

150. The ground floor café is a requirement under the Housing SEPP in commercial zones. The part of the site where the café is proposed is zoned E1, a commercial/local centre zoning.

Need for a 24/7 building manager to manage safety concerns

151. There are no requirements for a 24/7 on site manager. The Applicant has proposed for a building manager to be on site during business hours and a phone number that is available for 24/7 phone calls. These arrangements are consistent with the current planning controls that apply to the site.

Size of the development and heritage impacts

152. The heritage experts in the heritage joint expert report have considered the proposed development and agree that the scale and design will not impact the heritage significance of the Annandale Post Office, subject to minor design changes which have been adopted in the conditions of consent. I accept their agreement that the development will not cause unreasonable impacts to the heritage significance of the post office.

153. For the reasons I detail in response to the proposed variations to floor space ratio from [96] in this judgment, I find that the size of the development is consistent with the character of the area. In short, the visual catchment is mixed in character and the new works are consistent with the scale of the existing building, opposite shops and post office. The height of the proposed development does not overly contrast with the adjoining low density residential dwellings and are further setback from the boundary than the existing Lodgings Development.

Privacy

154. In terms of privacy impacts from the existing Lodgings Development, these site conditions remain largely unchanged from the existing development. The proposed communal area within the carpark area is screened by existing fencing. Notwithstanding, the Applicant has accepted conditions of consent to screen rooms on levels 1-3 of the existing development along the northern and western boundaries, and to screen the western facing rooms on levels 1-3 of the new co-living development to a height of 1.6m. The screening more than reasonably manages overlooking and improves the existing situation.

Existing design and building separation

155. The proposal seeks some internal changes to the existing building and changes to the front façade, but no changes are sought to the external parts of the building facing the side and rear boundaries. I am therefore unable to consider objections in relation to building separation from existing parts of the building that are unchanged by the proposal.

Previous fire incident

156. I am unable to consider previous fire incidents in relation to new works, but I note that fire safety upgrades are included in the proposal.

Safety and noise concerns from the existing parking area

157. The only changes proposed to the parking area is a reduction in car parking. I am unable to consider concerns in relation to parking arrangements already approved. In terms of fumes from the car park, the car park will reduce in size and there is no evidence of excessive or unreasonable fumes from the existing open car park situation.

Crime prevention

158. The proposal is for an ordinary residential development and there is no evidence of additional crime prevention measures needed. The usual measures of fencing and passive surveillance between properties and the public domain are sufficient.

Jurisdiction

159. The proposal includes modifications to conditions in DA3650, BA/1970/10234 and DA554/81. These conditions are:

DA3650

1. The first paragraph in the notice of determination of Development Consent 3650 issued by Council on 23 July 1970 is amended to read:

2. Reference is made to your letter of 9th July 1970, reference, FA/pb, attached to which were amended drawings in connection with Development Application of 2nd October 1969, lodged by you pursuant to the Town Planning Provisions of the Local Government Act, 1919, as amended, and as further amended by Development Consent DA2023/0900.

3. A new condition is inserted in DA3650 to read:

4. The use of the house-let-in-lodgings is to be operated in conjunction with the co-living development on the Co-living Site and in accordance with the plan of management approved by Development Consent DA2023/0900

5. The reference to 'married couples' in Condition 1 of DA3650 is deleted.

BA/1970/10234

1. Condition 18 of BA/1970/10234 in relation to cooking facilities is deleted.

DA554/81

1. A new condition is inserted in DA554/81 to read:

2. The use of the house-let-in-lodgings is to be operated in conjunction with the co-living development on the Co-living Site and in accordance with the plan of management approved by Development Consent DA2023/0900

3. I accept that these conditions should be deleted to ensure the consents do not conflict with each other and I accept that they are within power, pursuant to s 4.17(1)(a), (b) and (c) of the EPA Act.

4. The Statement of Environmental Effects and amended Statement of Environmental Effects prepared by The Planning Studio (SEE’s) comprehensively address the jurisdictional and merit matters for the following relevant planning controls. I have considered all the relevant controls:

5. Housing SEPP.

(a) In addition to satisfactorily addressing the relevant provisions, I accept that co-living is permissible through the Housing SEPP.

2. State Environmental Planning Policy (Resilience and Hazards) 2021.

(a) In relation to satisfaction of s 4.6, the submitted Remediation Action Plan prepared by EI Australia dated 12 May 2025 covers all properties, has been included in the conditions of consent and satisfies the provisions.

3. IWLEP

(a) In addition to being satisfied that all the relevant matters in the IWLEP have been met, I am also satisfied that the proposed breach to cl 4.3C landscaped areas for residential accommodation in Zone R1 has been adequately justified. The written request prepared by The Planning Studio dated 21 November 2024 (landscape written request) details that subcl 4.3C(3)(a) in relation to minimum landscaping is met, but that subcl 4.3C(3)(b) site coverage is breached by 4%. The landscape written request sets out that compliance with the development standard is unreasonable as the breach is caused by the existing development and the proposal has removed some hard paved areas to increase landscaping from 77m2 to a compliant 21.9% landscaped area. There is no further site coverage proposed by the Lodgings Development. The landscape written request details that there are sufficient environmental planning grounds for similar reasons as well as the reduced embodied emissions from retaining the existing building. (b) As previously acknowledged, it is only the justification relevant to the proposed breach that can be considered, not benefits of the development as a whole. I am satisfied on the basis of the above summarised reasons that the Applicant has demonstrated that compliance with the development standard is unreasonable and that there are sufficient environmental planning grounds.

4. Leichhardt Development Control Plan 2013

5. Contributions Plan.

6. I have considered the SEE’s and when read with the other documentation accompanying the DA, I am satisfied that all the jurisdictional provisions, preconditions to consent and merit controls have been met or adequately justified.

7. With consideration of the information accompanying the class 1 appeal, evidence, parties’ submissions and community submissions, I have considered all the relevant matters as required under s 4.15(1) of the EPA Act and accept that they have been met.

Conclusion and directions

164. Having considered the evidence and submissions of the parties, I accept that the proposal does result in a loss of some affordable housing for low income households (benchmarked from the Greater Sydney median household income). However the loss of some rooms is offset by the overall retention and increase in affordable housing proposed, which I find can be managed as affordable housing without a CHP. Having found that the proposal is for affordable housing, I also accept that the proposed breach to the FSR is warranted in the circumstances and that the proposal is in the public interest.

165. There are several findings that warrant revised conditions of consent from the parties, in relation to:

166. Adoption of Council’s condition 54 for the temporary relocation plan during construction be provided to Council for approval.

167. Condition/s to prepare a potential displacement of resident’s plan, to be approved by Council prior to the issue of a construction certificate, at [85] to [86].

168. Operational condition/s on record keeping of rents and salaries for tenants to ensure the affordable housing condition can be enforced, at [92] and [117].

169. The findings regarding the conditions in dispute, at [135] to [140].

170. The findings that the contributions payable is the amount submitted by Council.

171. In line with my findings, I therefore direct that:

172. The parties are to confer and agree on a set of conditions that are consistent with the findings of this judgment.

173. Agreed conditions of consent are to be filed to the Court by 10 December 2025. Any conditions not agreed between the parties are to be accompanied by a short note detailing the reasons.

174. Once the agreed conditions are filed and reviewed, final orders will be made in these proceedings.

S Porter

Commissioner of the Court

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