Dissapearing Building Entitlements, who would lose?

Date: 19-Jan-08
Author: Paul Flemming
Organisation: Progress
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As Steve Annis Brown advised in last month's OON, the removal of "existing holding" status would cause major devaluation of some, possibly many, properties in the Valley - Steve's Item 3. The regulations determining the area of the land on which one can build a dwelling are set out in Council's LOCAL ENVIRONMENTAL PLAN. This is the regulation which Council, prompted (now virtually instructed in the detail) by the State Government, is in the process of revising. The last major revision was concluded in 1989 (hence its current title - "LEP 1989"), and as Steve recalls, it followed intense property owner personal and public protests. Some concessions were won via certain classifications back-dated to 31 December 1984, in LEP 1989. The proposals in Council's present draft REMOVE THESE CONCESSIONS. Existing holding status removal would re-create the same property devaluations which were threatened and strenuously resisted in the 1980s. The removal of concessional 2 Ha lots is also involved.

What's an "existing holding"? In summary the LEP 1989 says it is the area of a lot, portion or parcel of land as it was at 31 December 1984; or where, as at 31 December 1984, a person owned 2 or more adjoining lots, portions or parcels of land, it is the aggregation of those lots, portions or parcels as they were at that date.

This requires that the lot or portion has remained as it was at 31 December 1984, and if you have 2 or more such lots or portions in your name, and these adjoin, they're lumped together (aggregated) and treated as the one existing holding, not as 2 or more.

This may apply to you, or put yourself in the position of someone it does apply to:

• You own the whole of an "existing holding" with an area of less than 40 Ha (100 acres), without a dwelling on it. (It doesn't matter when you bought it.)
• You were told that, even though the general standard in the Rural 1(a) zone calls for a minimum of 40 Ha for Council to approve a dwelling, LEP 1989 also specifically allows Council to permit a dwelling on the whole of a vacant "existing holding" of less than 40Ha.
• You'd probably had this explained to you by a real estate agent, and one would expect your solicitor also received Council confirmation in the course of conveyancing.
• Fast forward to what could happen a few months hence. Out comes the revised LEP with the "existing holding" provision deleted. You're now no longer entitled to erect a dwelling, nor have you the opportunity to sell your holding with that entitlement.
• In Steve's experience, you've lost at least 50% of your holding's previous value.

How widespread the losses would be is not yet known. Steve believes quite a number of property owners in the Valley would be caught, and the issue for the community will be whether or not to lend support to those facing losing hundreds of thousands of dollars in land value.

The question I understand is most being asked following Steve's article is "Why the change - who benefits?" I think the answer lies simply in NSW State Planning's ideology and its application of what it terms "the cluster principle". This concentrates rural residential development close to existing infrastructure, and actively suppresses more remote rural residential development.

If the "existing holding" provisions are removed from the Cessnock LEP, some number of property owners will each lose hundreds of thousands of dollars in property value. This would be grossly unfair to these owners, who purchased their land in good faith, relying on the provisions that were current at the time of purchase.

In addition, community development and employment growth will be substantially curtailed. The removal of the "existing holding" provisions will work in direct opposition to the considerable financial support and advice received by the Wollombi Valley community in recent times from the NSW Department of State and Regional Development, under the Towns and Villages Futures Program. The purpose of this program is to foster economic growth and create a positive environment for business in small regional communities such as ours. It would seem that two NSW Government Departments are heading in diametrically opposite directions.

The next meeting of Wollombi Valley Progress Association is on Saturday 26 January, at which time I expect discussion of this matter will commence.

Paul Flemming.

(as it appeared in OON - Issue 295 - February 2008)

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