Saddle Road DA aims to pioneer a ‘new definition of affordable housing’

A Development Application (DA) for six farm stay accommodation units and a central facility on the southern end of Saddle Road is up for public comment.

If approved, the proposal near Uncle Tom’s would offer a ‘new definition of affordable housing’, according to 2021 Byron Greens councillor hopeful, Matthew O’Reilly.

He told The Echo his parents manage the property, via a Family Discretionary Trust, while he has a residential lease agreement for part of the property, known as Byron Rainbow Farm.

According to DA 10.2020.574.1, the 19.32 ha property is an ‘approved intensive agricultural farm and plantation’, with ‘extensive agriculture and horticulture activities’.

The farm has ‘been incubating eight diverse agricultural businesses. Each of these businesses has been established by young entrepreneurs…’

Affordable housing

The DA’s objectives, as stated in the DA’s Statement of Environmental Effects (SEE) are to, ‘Lease six farm stay accommodation buildings (80 per cent) as temporary, affordable and accessible accommodation, to students in lease terms of between two weeks and three months’.

Another objective is to: ‘Respond to government and Council policies relating to affordable accommodation’, while the next line reads, ‘Respond to government and Council policies relating to rural tourism’.

The Echo asked Mr O’Reilly, ‘Isn’t it confusing and unclear to be claiming this is affordable housing, but in reality this is a short-term accommodation farm stay? 

He replied, ‘I absolutely agree that “affordable housing” as defined by the NSW government does not provide real affordability in Byron Shire owing to the high rents and land prices.

‘This is why the family farm I live on is trying to pioneer a new more relevant definition of affordable housing.  If old age pensioners are forced to rent an illegal converted garage in Mullumbimby or Ocean Shores for $500 per week, then the system is broken.

‘Currently every “affordable housing” development I have investigated in Byron Shire sets its rents as a discount of the market rent. The discount is usually between 20 per cent and 25 per cent, compared to the market rent for a similar property in the area. So, if illegal converted garages are renting for $500 per week then a pensioner should be able to rent the garage at $400 per week and that is considered affordable.  Clearly that definition is not working for our community.  Rent in some “affordable” single room boarding houses in our Shire is over $500 per week by the developers using this definition.

‘A better definition of affordable housing in our Shire would be settings rents at no more than 30 per cent of the median weekly household income in Byron Shire for a 60m2 secondary dwelling, granny flat or unit. In the 2016 Census the medium weekly household income in Byron Shire was $1,150. This means an affordable approved 60m2 dwelling should be rented at no more than $345 per week in Byron Shire.

‘For more than 10 years, since I first moved permanently to Byron, I have been frustrated by the perverse planning outcomes that are facilitated in our Shire.

‘On one hand land owners in rural areas are permitted to have up to 12 rural tourist cabins but on the other hand the use of these cabins for permanent affordable housing rentals is strictly forbidden.

On the one hand, a rural landowner has to pay around $20,000 in development contributions to build a secondary dwelling for affordable housing, while their neighbour has to pay less than $5,000 in development contributions for the exact same building when it is used for rural tourism.

‘On the one hand, rural wedding and function venues are permitted, but rural artists collectives and creative industries are prohibited.

‘These perverse planning outcomes are inexplicable when we have an affordable housing crisis for our long term residents and and more tourism than our infrastructure can cope with.

‘I have been a strong advocate for affordable housing for many years and through my lobbying the family farm my parents own has submitted two affordable housing expressions of interest over the last five years. In both cases they were invited to do so by Byron Shire Council.

‘It is not enough for community members to just talk the talk.  If we are committed to making positive change in or community we have to walk the walk as well.

‘I have assisted my family in preparing both EOIs just as I provided assistance on their current affordable housing farmstay DA.  I am very proud of what has been put forward in both the EOIs and the current DA.  These proposals challenge the narrative that only tourism can occur in rural zones and not affordable housing.

Short term vs temporary accommodation

‘The current DA is not for “short term accommodation”.  Its primary purpose is for “temporary accommodation”.  There has been a long history of NSW courts differentiating between “short term” and “temporary” accommodation.  Some of those Court decisions are referenced in the DA.  Under the Byron LEP and DCP 2014 “rural tourism accommodation” can only be for “short term accommodation” while “farm stay accommodation” can be for “short term accommodation” OR “temporary accommodation”.  To be clear “rural tourism accommodation” and “farm stay accommodation” are two very different things.  The differences are clearly articulated at page 31 of the Statement of Environmental Effects.

‘The current DA does not propose any “rural tourism accommodation”.  Instead it proposes six self contained affordable farm stay accommodation units for students enrolled in agriculture, horticulture, permaculture or land management studies throughout the Byron region.  The family farm has voluntarily offered to permanently commit two of the accommodation units for temporary affordable housing in perpetuity and commit the other four as temporary affordable housing for a minimum of 9 months of the year.

‘Section 4.9 of the Statement of Environmental Effects sets out eight conditions of consent the family farm is prepared to voluntarily bind itself to. The last four of these conditions ensures the ongoing use of the farmstay accommodation as affordable housing.

‘• The weekly rent charged to students leasing the farm stay accommodation as temporary student accommodation must not exceed 30% of the median household weekly income for Byron Shire
as reported by the Australian Bureau of Statistics.
‘• Proof of ongoing enrolment in a training course at a local accredited North Coast training provider must be provided before a temporary student accommodation lease agreement may be entered into or alternatively proof of an internship or traineeship at Byron Rainbow Farm.
‘• A report listing all leases entered into for farm stay accommodation buildings 1 to 6 including temporary student accommodation and short-term holiday accommodation for the financial year just ended must be provided to Byron Shire Council before the 31st of December each year. The report must provide the name of the lessees, the term of the leases and the weekly or overnight rent charged. A copy of the template lease agreement(s) used must also be attached to the report. Copies of proof of student enrollment of all temporary student accommodation lessees must also be included.

‘These proposed conditions of consent are the highest level of protection ever seen in Byron Shire and will ensure that the farmstay accommodation is REALLY used for affordable student accommodation going forward in perpetuity.

‘The family farm hopes that this use of farm stay accommodation as affordable housing will set a precedent in Byron Shire that other rural land owners will be able to follow.

‘In order to make positive change there always has to be someone who is willing to take a risk.

‘This DA shows that Byron Shire can have a future other than multi-million dollar mansions, celebrity getaways, Air BnBs, extensive rural tourism accommodation and wedding venues in our rural areas.

‘My family and I want this Shire to have small scale farming businesses and affordable accommodation for our young people and students that adds to the resilience and diversity of our community rather than detracting from it.

‘The family farm originally asked to be bound by providing temporary student leases of between three months and 12 months based on the court precedents in McAuley v Northern Region Joint Regional Planning Panel [2013] NSWLEC 125 and Burwood Municipal Council v Aboriginal Hostels Ltd (1979) 39 LGRA 150, however Byron Council refused to accept these precedents and indicated that the DA would be refused unless the lease terms were reduced down to between two weeks and three months. I have attached the original SEE which includes these lease terms but which were refused by Byron Council.

‘The original proposed conditions of consent were:

‘4.9.    Proposed Conditions of Consent

It is proposed that the following conditions of consent are included in any approval. It is the intent of the proponent that over 80% of the development will be used for temporary affordable rental accommodation for students as requested by Council Resolution 18-543.  The following proposed conditions of consent ensure that this affordable accommodation is provided in perpetuity.
•    Farm Stay Accommodation units 1 and 2 are to be leased as temporary accommodation to local students for 52 weeks per year in leases of no less than three months and no more than 12 months.
•    Farm Stay Accommodation units 3 – 6 are to be leased as temporary accommodation to local students for a minimum of 39 weeks per year in leases of no less than three to nine months.
•    Farm Stay Accommodation units 1 and 2 may not be leased as short-term holiday accommodation at any time.
•    Farm Stay Accommodation units 3 – 6 may be leased as short-term holiday accommodation for no more than 90 days per year.
•    The weekly rent charged to students leasing the farm stay accommodation as temporary student accommodation must not exceed 30% of the median household weekly income for Byron Shire as reported by the Australian Bureau of Statistics.
•    Proof of ongoing enrollment in a training course with a minimum duration of 3 months at a local accredited North Coast training provider must be provided before a temporary student accommodation lease agreement may be entered into or alternatively proof of an internship or traineeship at Byron Rainbow Farm.
•    A report listing all leases entered into for farm stay accommodation buildings 1 to 6 including temporary student accommodation and short-term holiday accommodation for the financial year just ended must be provide to Byron Shire Council before the 31st of December each year. The report must provide the name of the lessees, the term of the leases and the weekly or overnight rent charged.  A copy of the template lease agreement(s) used must also be attached to the report. Copies of proof of student enrollment of all temporary student accommodation lessees must also be included.

‘This is a complex DA to get your head around due to the different planning definitions and uses proposed, but I can assure you that this DA is for real temporary affordable housing and not for short term accommodation.

‘Regarding the existing two approved DAs for a dual occupancy and agricultural activities.  Many of the agricultural activities have already commenced and the balance require a major upgrade of the Gulgan Road interchange to take place first.  The approval for the Gulgan Road upgrade was only granted last month in February 2021.  The dual occupancy DA is almost ready for a Construction Certificate to be applied for.

‘For reference, the family farm I live on (Byron Rainbow Farm) is owned by my parents but I lease the original dwelling.

My relationship to the family farm is not very complicated. Ken O’Reilly and Karen O’Reilly are my parents. They are the only shareholders and are both directors of Koresoft Pty Ltd. Koresoft Pty Ltd is the trustee for the O’Reilly Financial Investment Trust Ken O’Reilly and Karen O’Reilly are the only beneficiaries of the  O’Reilly Financial Investment Trust. Koresoft Pty Ltd owns the two adjacent properties that make up Byron Rainbow Farm as Trustee for the O’Reilly Financial Investment Trust. I am not a shareholder, director or beneficiary of Koresoft Pty Ltd or the O’Reilly Financial Investment Trust. I have had a contract as the farm and property manager of Byron Rainbow Farm.  I resigned from the position of Byron Rainbow Farm property and farm manager on the 11th of February 2020 effective from the 31st of March 2020. I also have a long term, residential lease agreement over the farmhouse, curtilage and its immediate surrounds on Byron Rainbow Farm (but not over the whole of Byron Rainbow Farm). I have never received any financial benefit from Koresoft Pty Ltd or the O’Reilly Financial Investment Trust beyond wages paid for services rendered and reimbursement for authorised farm expenditure.

Primary Production Trust

‘The primary purpose of the O’Reilly Financial Investment Trust is as a primary producer (farming, agriculture and forestry) and it is considered a Primary Production Trust for the purposes of the Australian Taxation Office. The O’Reilly Financial Investment Trust is a Family Discretionary Trust where the primary beneficiaries are Ken O’Reilly and Karen O’Reilly. NSW Farmers Federation and many other Agricultural Industry bodies (such as Grains Research and Development Council)  recommend that family farming businesses are structured as Family Discretionary Trusts.

‘A Family Discretionary Trust provides great flexibility in relation to asset ownership, dealing with trust income and asset protection. In a trust structure, family members can come and go as they wish. Another important feature of a trust structure, when it comes to succession planning, is the ability to commence handing over day to day running of the farm to the next generation without losing control.

‘Both Lots on Byron Rainbow Farm have been deemed farmland for the purposes of rates by Byron Shire Council. Both Lots on Byron Rainbow Farm have been deemed as being used for Primary Production by the NSW Department of Lands for the purposes of Land Tax exemptions. Byron Rainbow Farm is a farm based on primary production first and foremost and my family’s home second.  I have lived at and been the manager of Byron Rainbow Farm since July 2012 until my resignation became effective of the 31st of March 2020.

‘As of the 31st of March 2020, I am no more than a tenant, lease holder and legal occupier of the dwelling at the Saddle Road, Brunswick Heads.

‘I have looked for a clear definition for what the NSW law considers a property developer. I have found several definitions online and I think it can be assumed that a property developer meets anyone or all the below three definitions:

‘1. Someone or an entity they are involved with who lodges a rezoning planning proposal

‘2. Someone or an entity they are involved with who buys and develops houses, buildings, and land in order to sell them and make a profit from them.

‘3. Someone or  an entity they are involved with that makes money by building houses or renovating existing properties for sale.

‘The definition of a property developer does not include someone who is running a lawful business (such as a family farm) on their land, or someone who lodges a DA over their primary place of residence or even someone who owns investment properties.  These types of activities fall outside the scope of a property developer.

‘None of the DAs or EOIs I have helped with over my family’s farm fall under the above three definitions of property developer.  My family has no intention of ever selling our farm or building any houses to then sell them off to make a profit.

‘Byron Council has accepted that the farmstay accommodation will be permanently occupied by students as they asked the planners and engineers at Aldersons and Associates to re-do the traffic assessment and waste water report using resident numbers for permanent dwellings rather than the usual lower resident numbers for short term tourist accommodation’.