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With the increasing popularity of manufactured home estates (MHE) as a form of affordable housing, the recent decision of TMT Devco Pty Ltd v Cessnock City Council [2016] NSWLEC1161 highlights relevant considerations for consent authorities regarding the characterisation of manufactured housing development and the application of the State Environmental Planning Policy No. 36—Manufactured Home Estates (SEPP 36).

The proceedings

The Class 1 proceedings in the Land and Environment Court in TMT Devco Pty Ltd v Cessnock City Council involved an appeal against the Council's refusal of a development application for a 302 manufactured home estate on land zoned "RU2 Rural Landscape".

In addition to the Council's concerns regarding the merits of the application, a number of legal issues were raised in the course of the proceedings regarding the permissibility of the proposed development.

The Court's characterisation of an MHE

The parties had competing views on the proper characterisation of the proposed development. The Applicant sought to characterise the proposal as a caravan park, while the Council argued that an MHE is"multi-dwelling housing".

Pursuant to the Land Use Table in the Cessnock Local Environmental Plan 2011 (LEP), caravan parks are an innominate use permitted with consent in the RU2 zone, however "residential accommodation" is prohibited. "Multi-dwelling housing" is a subset of "residential accommodation".

The LEP defines "caravan park" as "land (including a camping ground) on which caravans (or caravans and other moveable dwellings) are, or are to be, installed or placed". While the definition of "moveable dwelling" does include a "manufactured home", the definition of "caravan park" is conjunctive, such that it requires the installation or placement of both caravans and moveable dwellings on the site. While the application did include an area for caravan parking and RV storage, it did not include caravan sites, nor did it propose the installation or placement of caravans for human habitation.

Commissioner Brown concluded that the proposed RV/caravan storage area would be ancillary to the use of the site as an MHE and held that an MHE is characterised as "multi-dwelling housing" (and therefore prohibited in the RU2 zone). 

It is interesting to note that in Wygiren Pty Ltd v Kiama Municipal Council [2008] NSWLEC 56, it was argued that the inclusion of two caravan sites in an MHE of more than 1,000 manufactured home sites was nominal and not enough to characterise the development as a "caravan park". The Court, however, did not rule on this submission because it had determined that the MHE development was permissible under SEPP 36.

SEPP 36 and the R5 zone

Notwithstanding the prohibition in the LEP, SEPP 36 permits manufactured home estates on any land on which development for the purpose of a caravan park may be carried out, subject to the exemptions set out in Schedule 2 of SEPP 36 (amongst other provisions).

By virtue of cl 6 of Schedule 2, SEPP 36 does not apply to land that, under any environmental planning instrument, is within an area or zone identified in that instrument by the description:

  • open space, other than open space (private recreation)
  • environmental protection
  • scenic protection, or
  • rural (where the land is not adjacent to or adjoining land zoned for urban use).

The subject site was within a zone identified by the description "rural" (being RU2 Rural Landscape). Caravans are an innominate use permitted in that zone. The site was adjoined by land zoned RU4 Primary Production, R5 Large Lot Residential, E2 Environmental Conservation and RU2 Rural Landscape.

The parties put forward competing submissions as to whether the R5 Large Lot Residential Zone is "land zoned for urban use". It was the Council's position that it is not and Commissioner Brown supported this position. Taking into account the objectives of the R5 zone as well as the permitted and prohibited uses within the zone, Commissioner Brown concluded that the proposed development was not "adjacent to or adjoining land zoned for urban use".

Conclusion

While each application for an MHE will turn on its own facts (subject to the zoning of the site and adjoining land as well as the particulars of the proposed estate itself), councils should be aware of the various matters that affect the permissibility of the development of MHEs on certain sites in their local government area.

The NSW Government is currently undertaking a review of the regulation of manufactured homes and estates, caravan parks and camping grounds. The Department of Planning and Environment with the Office of Local Government sought feedback on a discussion paper between 2 November 2015 and 14 December 2015. We are awaiting further information regarding the outcome of the review and will provide an update when there are further developments.

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