Maxine Hawker’s letter, (Echo, 16 September) is to be applauded and the exhibited development application (DA) for 3-5 Fingal Street, Brunswick Heads is evidence that her warning is currently in play.
Subsequent to my letter of the same date, Council have advised that the option of paying parking contributions on the Fingal Street DA is $85,000/space. Critical to the DA, with a stated cost of $11,734,592.00 is its leveraging on the affordable housing concessions for 41 on-site car parking spaces. This would represent an upfront ‘savings’ of $3,485,000. In exchange, the ‘loss’ in rent over 15 years for providing two affordable units grandfathered for 15 years at current market rent, and assuming rents constant over that period would be $312,000.
Now the real ‘magic’ for the developer begins:
The future real value of the ‘cost’ of reducing the rent can be analysed at different discounted interest rates to take into account the impact of inflation over the grandfathered period. Using the enabling tool of AI, I have crunched the numbers for varying interest rates from three per cent, to ten per cent. At the low end of three per cent, the future real value to the developer in today’s money is a ‘cost’ of $200,260.32, and $74,690.32 at the high end of ten per cent.
The same interest rates were applied to parking contributions over the grandfathered period. The increase in value in today’s money to the developer of circumventing parking contributions varies from $5.45m at the low end of three per cent, rising to $15.62m at the high end.
Summed, the developer’s net gain is $5.26m at the low end and $15.54m at the high end. That is the incentive for developers to ‘use’ the affordable housing legislation to get the height concession and by so doing ‘abuse’ not only what the community fought for being a low-rise development of an overall height of 9m but the legislation itself.
Worse, this DA sets a precedent in Brunswick Heads for future development.
For four decades The Echo has printed the stories some people loved, some people hated, and some pretended not to read. If you want us to keep telling the truth, the real truth, not the sugar-coated version. We’ll need your support to keep the presses rolling. 
