In a real ‘test case’ for the village sector, The Vasey Housing Association N.S.W. took two residents to the NSW Civil and Administrative Tribunal (NCAT) last Friday after they refused to accept an offer to relocate them from the operator’s ‘Parkview’ village at Waitara on Sydney’s Upper North Shore, 23km from the CBD.
The 55-unit village, which is 54 years old, is being redeveloped into a 12-storey, 117-unit building that will offer affordable units for up to 200 senior residents.
A recent rezoning of the land by Hornsby Council allowed for the higher-density development to be considered.
The operator had offered to move the residents at no cost, to one of their four other villages in Sydney. The other 18 residents have already relocated, with 17 moving to Vasey’s other villages, and one to alternative accommodation she had sourced with Vasey covering the removalist costs.
Vasey Housing CEO David Elkins told The Daily Telegraph that they have been upfront with residents about the development, which was announced in January 2015.
Mr Elkins says that they cannot offer the residents a place in the new development as this would affect the discount they can provide to make the new price point “as affordable as we can make it.”
It’s worth noting that both residents paid an ingoing contribution of between $100,500 and $105,500 respectively when they entered the village.
Vasey also says they would feel morally obligated to make the same offer to the other residents that these two residents could possibly receive – potentially an amount of between $569,190 and $666,940 each.
These payments could cost Vasey up to $10M in compensation and make the entire project unviable, endangering Vasey’s role as an affordable housing provider for seniors.
Following last week’s hearing, both sides will now make submissions to NCAT with another half-day hearing scheduled for late July or early August before a final judgement by the Senior Member.
The landmark case underlines a serious problem faced by operators of ageing villages.
The average village is now 24 years old according to the Property Council, and many are approaching the stage when they will need to be redeveloped to cater for the new ‘baby boomer’ residents coming through. Strategically Vasey’s position is that it must modernise all of its villages to remain relevant and viable into the future.
If the case goes against Vasey, the units will likely have to be sold to a commercial residential developer – and the units then sold at residential market prices. A decision against the operator would also affect its model moving forward and could put its ongoing viability in doubt.
That would be a disappointing outcome for Vasey, which has a long history of providing affordable accommodation to those in need and those with a past Defence connection. Vasey was originally established in 1959 to offer housing for war widows.
We will keep you updated on the result.
