What is a paper subdivision?

    A paper subdivision is the term used to describe land parcels recognised on paper only. Most have no formed roads, drainage, reticulated water, sewer or electricity. Many originated in the late 1800s or early 1900s. Paper subdivisions exist in various parts of NSW.

    Since the Local Government Act came into force in 1919, developers have been required to provide essential services (formed roads, drainage, reticulated water, sewer and electricity) to land before the individual blocks are sold. Developers are responsible for the cost of installing those services, and typically pass that cost on in the price of the lots sold. In paper subdivisions, landowners are responsible for the cost of installing essential  services. This is difficult to coordinate when there are many landowners.

    What mechanisms are in place to assist landowners?

    The NSW State Government introduced laws to assist landowners to provide essential services in paper subdivisions in 2013. You can find those at legislation.nsw.gov.au in the Environmental Planning and Assessment Act, 1979, Schedule 7, and Part 16C of the Environmental Planning and Assessment Regulation, 2000. The laws provide a process for landowners to collectively fund the provision of essential services for lots within a paper subdivision. This involves identifying a Subdivision Authority  to coordinate funding and provision of essential services

    Council is working with landowners to use the paper subdivisions legislation to coordinate service delivery to the whole paper subdivision at Wyee West. We are going through the process of preparing a Development Plan to outline how the essential services will be provided.

    What is a Development Plan?

    A Development Plan is a legal document that outlines what essential services will be provided in the paper subdivision, how much they will cost, who will pay, and how payment will be made. Preparation of a Development Plan is the first major step in adhering to Paper Subdivisions legislation.

    A Development Plan must contain the following information:

    • a proposed plan of subdivision
    • what subdivision works will be undertaken for the land
    • the costs of the subdivision works and the proposed means of funding those works
    • the costs of preparing the Development Plan 
    • the proportion of costs to be borne by the owners of the land and the manner in which the owners may meet those costs
    • rules as to the form of compensation for land that is compulsorily acquired and how entitlement to compensation is to be calculated
    • rules as to the distribution of any surplus funds after the completion of subdivision works for the land
    • a description of the proposed stages of development (if the development is to be staged)
    • a proposed timetable for the subdivision of the land and the carrying out of subdivision works

    Council staff are working to prepare a Development Plan that covers all these details. Once we have a draft, we will bring it to landowners to provide input.

    How much will the Development Plan cost?

    We’re aiming to answer this question as quickly as possible. There are two components to the costs of the Development Plan:

    1. Cost of essential services (the physical work)

    Council engaged consultants to prepare detailed studies, designs and plans in 2020 for roads and all essential services. The plans are available to view here. These plans are now being checked and finalised. We expect that it will take a few more months to arrive at a final version of the plans and will let you know when this is achieved.

    We sent the plans to a Quantity Surveyor to estimate the overall costs for the provision of essential services – the physical development works. The total cost of the physical works was estimated at $18.6 million.  

     You can see a breakdown of the costs of physical works in the Quantity Surveyor’s report here.

    We’re planning on checking the Quantity Surveyor’s estimate against a market quote for essential services construction. 

    Understanding the full breakdown of costs for essential services involves engaging consultants to:

    • Undertake boundary surveys (to confirm the work required along interallotment drainage easements)
    • Complete a detailed contamination assessment of the former orchard (to confirm any costs of remediation)

    We are currently in discussion with consultants to undertake these works.

    2. Cost of preparing a Development Plan

    Right now, we are working on estimating the other costs associated with the development plan. These include the cost of legal fees, planning fees, acquisition of environmentally constrained land, any remediation of contaminated land that may be required, and others. We will communicate these costs to landowners as soon as they are available.

    At the same time, we are obtaining quotes for a returning officer to complete a landowner ballot and confirming any further consultant inputs to the planning approvals we need for the works to proceed.

    The total cost of the Development Plan will be the combination of both costs outlined above. We will provide a final figure as soon as one is available.

    How much will each landowner pay?

    Once we have firmer cost estimates we will take those to Council for consideration with options on how landowners could pay including the option that Council forward-fund the works, and landowners repay these costs over time. 

    Council elections are scheduled for 4 September, and Council is unable to make decisions on major expenditure in the period leading up to elections. We’ll take the information and payment options to Council for consideration after the elections.

    Currently we are looking at four different ways to allocate the costs between landowners:

    1. Landowners pay a flat rate for each lot; OR
    2. Landowners pay an amount for every square metre of land owned; OR
    3. Landowners pay an amount in proportion to the value of their land, as valued by the Valuer General; OR
    4. Landowners pay an amount in proportion to the likely uplift their land will obtain after the essential services are provided. 
      • Uplift means the increase in value obtained from the delivery of essential services. It is the difference between the valuation of land before essential services are provided, and the expected valuation of land after the essential services are provided.

    You can watch our Chief Financial Officer discuss these methods on this video.

    We will choose one of these methods, after we consider landowner feedback. We’ve taken one initial landowner survey of your preferences for allocation of costs. You can view the results in this report.

     We’ll take another poll after we confirm that Council is willing to forward-fund the essential services provision.

    What is the Paper Subdivisions Legislation?

    The Paper Subdivisions legislation refers to the Environmental Planning and Assessment Act, 1979, Schedule 7, which was introduced by the NSW Government in 2013. It provides a mechanism to overcome barriers to develop paper subdivisions. More detail is provided in Part 16C of the Environmental Planning and Assessment Regulation, 2000.

    In order for development to proceed, landowners will vote to accept a Development Plan. At least 60 per cent of landowners, and the owners of at least 60 per cent of the land area of the paper subdivision, must vote to support the Development Plan so that it can proceed.

    The State Government also released the Planning for Paper Subdivisions Guidelines in 2013. These guidelines outline the process we are going through to develop the land in the Wyee paper subdivision. This includes nominating a Subdivision Authority to carry out the work, preparing a Development Plan, and undertaking a landowner ballot.

    Who is the Subdivision Authority?

    The Subdivision Authority is the organisation responsible for preparing the Development Plan and providing the essential services. This can be one of four bodies which include a council, or Landcom. Council is considering taking on the role of Subdivision Authority to enable the development to proceed, but no decision has been made yet. A Subdivision Authority is appointed by the NSW Minister for Planning.

    What about lots fronting Gorokan and Bushells Ridge Roads?

    Because Gorokan Road and Bushells Ridge Road are already constructed and formed, lots fronting these roads may be subject to lower essential services costs relative to other parts of the paper subdivision. We can take out the cost of building formed roads for these lots. Contributions will however, still need to cover some road widening, kerb and gutter and stormwater drainage as well as reticulated water and sewerage.

    What about lots with their own electricity?

    New powerlines will be installed underground, so that we can meet standards for new subdivision design. Existing power poles will need to be removed. The cost of removing the power poles has been included in our Quantity Surveyor’s estimate of the cost of essential services. It is likely that all landowners will contribute to the cost of removing the poles, and the cost of providing underground electricity throughout the subdivision.

    How can landowners pay for essential services?

    Council staff are considering three options to allow landowners to pay for the costs of essential services:

    1. Pay upfront
    2. Council takes a charge over the lot (a legal right to recover debt, similar to a mortgage or caveat) and landowners pay it back on a payment plan
    3. Council takes a charge over the lot and landowners pay it back upon transfer of the property title.

    We are obtaining legal advice on these options. Once we have the required advice, we plan to put these options before Councillors for approval. You can watch our Chief Financial Officer discuss the options in more detail here. It is important to note that these options have been proposed by Council staff and are not yet approved by Councillors.

    Why do we pay rates on land that can’t be developed?

    Why do we pay rates?

    Rates are collected in accordance with the Local Government Act 1993, and apply to all properties across the City. The Act identifies the land that must be charged rates. Council is required to levy rates for properties identified in the Act, regardless of their development potential. About half of Council’s yearly income comes from rates.

    The amount of rates charged for each property is linked to the unimproved value of the land as determined by the NSW Valuer General. 

    Rates help us provide the Lake Macquarie community with services including:

    • maintenance of built roads, footpaths and cycleways across Lake Macquarie
    • upkeep of parks and reserves 
    • planning and development services
    • libraries and swim centres
    • lifeguards on our beaches
    • dedicated services for young people, families, people with disability and over 55s. 

    Where do they go?

    Rates are the way our community contributes to funding services across the City. Services funded by rates are provided across the local government area and are not linked to the suburbs the rates were drawn from.

    Why can’t rates pay for the construction of roads and essential services?

    Rates do not pay for the formation of new roads or laying new services. Infrastructure, such as roads, sewer, water and drainage, is usually provided by the developer at the point of subdivision – except in the instance of paper subdivisions such as Wyee West. 

    When was the waste charge removed from rates on vacant blocks?

    Following community feedback, Council reviewed the approach to applying the charge in Lake Macquarie. Since 1 July 2019, the charge does not apply to properties considered vacant. As a result, the waste charge only applies to properties within the Wyee West paper subdivision where the service may be required. If your property is vacant, you will be exempt from the domestic waste charge while ever the property remains vacant and is unable to be lawfully developed.

    Why can’t landowners choose to go “off-grid”, for example with solar panels, rainwater tanks and on-site sewage systems?

    When fully developed, the density of development within the Wyee Paper Subdivision will be such that it would not be practical for each property to arrange its own essential services.

    Onsite sewage management is not generally viable on lots smaller than 1,000sqm, and most properties do not have access to formed roads and drainage, which are not cost effective to construct on a piecemeal basis.

    Additionally, the extension of sewer to Wyee, and the construction of a new subdivision development immediately adjoining the paper subdivision means it should be more economical to extend essential services into the paper subdivision itself.

    What will happen to existing buildings and structures within the paper subdivision?

    Over the years, a number of structures, including houses, have been erected within the paper subdivision without Council consent. As these structures have the potential to impact the environment, but also place their occupants at risk, Council will be working with landowners to achieve compliance with relevant standards and development controls. In some cases, this will involve the removal of existing structures.

    When will a ballot occur for Wyee West paper subdivision?

    A ballot must be held before development can go ahead. At least 60 per cent of landowners, and the owners of at least 60 per cent of the land area of the paper subdivision, must vote in support of a Development Plan for it to proceed.

    A Development Plan will indicate how much landowners need to pay. Council is currently seeking external funding in 2021 / 2022 to reduce the cost of essential services. Once we have confirmed any external funding we will know the costs to residents. Then we can draft the Development Plan.

    When we are confident we have a Development Plan that can be supported, we will put that to a ballot. Please refer to page two of this document for estimated timelines.

    We are still collecting information about how the voting process will be undertaken and will provide more information closer to the time of the ballot.

    When is the earliest that residential development could be allowed to occur within the Wyee West paper subdivision?

    Based on the experience of Landcom with development of the paper subdivision known as the Riverstone Scheduled Lands, construction of essential services could be expected to commence within 18 months of a successful ballot and take 1-3 years to complete. Completion of the essential services is required before Council could grant approval for dwellings.

    Hypothetically, this means that the earliest Council could grant approval for dwellings would be in 2024, subject to a successful landowner ballot and the process progressing unimpeded.

    What is Council doing to maintain unformed roads?

    There are no formed roads in the Wyee paper subdivision. We are committed to assisting landowners to realise the development potential of the Wyee paper subdivision, however there are still a number of steps before permanent roads, drainage and other services can be built. While we work through these steps with the community to finalise the Development Plan, we will continue to monitor the existing unformed roads, assess the conditions and undertake temporary improvements where necessary.

    In 2016, Council had the land on which future formed roads could be built transferred to its ownership from a private estate. This was to facilitate the preparation of a Development Plan. Since then, we have started to undertake basic maintenance works. Our maintenance crews will maintain the unformed roads to minimal standards until the Development Plan can proceed and final formed roads are built. Until then, the unformed roads will have no drainage system, and storm events will create scouring and pot holes. However, our maintenance crews will repair these as needed to a minimum safety standard. They will be maintained to achieve a usable road for garbage trucks and emergency services.

    Our staff will regularly monitor the condition of these roads. Any person may lodge a service request on Council’s website to alert us of maintenance requests (Report an issue - Lake Macquarie City Council). When significant damage occurs, we will undertake inspections to determine what maintenance works are needed.

    These maintenance works will be undertaken in line with our usual priority system, which takes into account the maintenance needs of other roads within the City.

    What type of road works were undertaken in July 2020?

    Following community concerns, Council assessed the safety and usability of roads in the Wyee West Paper Subdivision. As a result of this assessment, we have undertaken additional temporary works.  

    Council’s Westside Maintenance team completed patch gravelling works along Tullokan Road, Waropara Road,

    Pirama Road, Tulkaba Road and Karakunba Road within the paper subdivision during week commencing Monday 27 July. These temporary works are to make the roads trafficable for emergency and waste services. Similar works were undertaken in some areas a month ago.

    In late 2018-early 2019, Council undertook temporary placement of reclaimed asphalt pavement (a hard-wearing gravel) along Pirama Road, Tulkaba Road and Karakunba Road to enable waste collection from occupied properties that may require this service. Council is required to charge occupied properties for domestic waste management under the Local Government Act. The domestic waste charge does not apply to properties considered both vacant and unable to be lawfully developed. As a result, properties within the subdivision that are and remain vacant are exempt.

    Council is committed to assisting landowners to realise the development potential of the Wyee West Paper Subdivision, however there are still a number of steps before permanent roads, drainage and other services can be built.  While we work through these steps with the community to finalise the Development Plan, Council will continue to monitor these roads annually, assess the conditions and undertake temporary improvements, where necessary.