Developer wins three years too late

Posted on 17/11/2015  
Developer wins three years too late

A developer has finally won approval for an accommodation project to service the Gladstone market, about three years after it might have been needed.

In a stunning example of bad planning and crazy bureaucracy, approval for a project that is now surplus to requirements has been granted by the Planning and Environment Court, after a three-year battle between the developer and the Gladstone Regional Council.

There are all kinds of messages in this story. The plan to build a 1408-room workers camp explains why Gladstone suffered a market downturn amidst an incredible economic boom.

Most of the workers on the three massive gas projects (which totaled investment of more than $60 billion and created tens of thousands of jobs in Gladstone) were staying in this style of camp, rather than renting all those new houses and units built by poorly-researched developers.

Building data shows what happened: Gladstone dwelling approvals rose from 388 in 2009 and 404 in 2010 to 1,109 in 2012 and 1,570 in 2013. In the decade before 2012, dwelling approvals averaged 560 a year. Approvals in 2012 were double the average and those in 2013 almost tripled it.

Many developers did not understand that personnel working on the LNG projects would be accommodated in workers camps. Double-digit vacancies resulted, with rents and price falling sharply.

As one example, the median house price in the Gladstone suburb of Kin Kora has fallen by an average of 10% per year for the past three years – and is now lower than it was five years ago.

It’s also a story about how councils slug developers (which is part of the story of the high cost of new housing).

In this case, when accommodation provider Homeground applied to build its workers camp in 2012, the council demanded $8.15 million in infrastructure charges.

The Brisbane court decision reduced his to $988,000, but too late for Homeground, as the three gas projects are close to the end of their construction phases and thousands of construction workers are leaving Gladstone.

Not surprisingly, the workers camp will not be built.

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