What is being proposed?
Strategic Action #25 of the Lennox Head Strategic Plan directs Council to investigate development of Council owned land in the Epiq Estate for housing for local key workers. An ariel image of the land that Council owns is shown below. The northern part of the land is zoned R3 (medium density residential), while the southern part is a protected buffer zone adjacent to the Ballina Nature Reserve. Sub-division has yet to commence, however it is estimated that this land may accommodate up to 60 residential lots.
Key worker is a flexible term used to describe a person who is essential to the functioning of the community they live in. They must be working, which distinguishes them from people who may be eligible for “social” or public housing. The definition of who is or isn’t “key” depends on the characteristics of the location. Some workers are “key” to every town, such as police, nurses and teachers, but it may also include industries that are highly casualised and low paid, such as hospitality, retail and caring professions.
Why is this being proposed?
I have previously written about the challenges that young people and families earning low incomes face in finding affordable housing in Lennox Head, where house and land prices are skyrocketing, and rental availability is regularly below 1%. This presents serious problems for local businesses, especially in sectors such as retail, hospitality, and caring professions (e.g. aged and childcare) who rely on these workers to survive. It also threatens the sustainability and diversity of our community and forces local families to move away from their social support networks.
What are the benefits?
Increasing intergenerational wealth inequality has meant that an increasing number of younger people will never be able to afford a home and will become life-long renters. Housing supply has not kept pace with this increase in demand for rental accommodation, resulting in increased prices.
By developing and leasing Council-owned land for local key workers, Council can control the price of rents (e.g. offer rents at a % below market rate) and the terms and conditions of the lease. Unlike state-government owned housing, Council can also decide the eligibility criteria for this housing, which should be targeted to people who are not eligible for government-owned housing (e.g. because they earn too much) but are priced out of the private rental market. This will ensure an increased supply of affordable and targeted rental accommodation for the people who need it most.
Supporting small business
As previously stated, local businesses rely on low-income workers to service those with higher incomes. If these people cannot find affordable housing locally, they will be forced to move elsewhere. Any investment that Council makes in increasing the supply of affordable housing will have flow on effects to local businesses.
Recurrent income stream for Council
With hundreds of millions of dollars of assets to maintain, it is essential that Council has a reliable supply of recurrent income. Most people don’t realise that rates on comprise half of Council’s overall budget and are capped by State Government. Most other fees and charges that Council can charge are also capped, and many have not been indexed to take rising inflation into account.
Rental income from Council’s developments is a valuable source of recurrent income that can be maximised to ensure its long-term financial sustainability.
What are the risks?
Value for money and fiduciary risk
Some may argue that Council could get a better return on its investment by selling these lots to the highest bidder. This is true, as it would require minimal further capital investment beyond the costs associated with sub-dividing the land and result in maximum capital income. While this approach may yield a higher capital gain, it would not provide an ongoing source of recurrent income, which is one of the key challenges of managing Council’s budget. There is also an argument that Council should account for the indirect benefits to the community and local businesses of providing affordable housing, which are much more difficult to calculate.
Tell us what you think?
Tell us what you think about Strategic Action #25 of the Lennox Head Strategic Plan but making a formal submission on the Your Say Ballina website here: https://www.yoursayballina.com.au/lennox-head-strategic-plan
You can also send me an email at [email protected] or call me on 0419493898.
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