A legal cloud is hanging over high-rises on the Gold Coast after a court ruled luxury apartments do not improve housing affordability simply because they increase housing supply.
The Queensland Court of Appeal ruled in July that the council’s claim that a luxury high-rise would improve “housing choice and affordability” was not enough to justify exceeding the regulated height limit.
In a judgment summary, Justice Shane Doyle stated that apartments targeting the luxury market could not reasonably be considered as improvements to housing affordability.
“To add to the supply of apartments designed to cater to the luxury and more affluent market cannot, in my view, be reconciled with the ordinary meaning of the word ‘affordability’,” he wrote.
“To do so would be a distortion of the ordinary meaning of affordability.”
The court ruling has thrown the council’s high-rise approvals into uncertainty, with councillors set to be briefed on its implications later this month.
Construction of new apartment buildings along Bilinga in January 2025. (ABC Gold Coast: Dominic Cansdale)
Luxury gets ‘affordability’ exemption
Under the council’s planning rules, developers can build up to 50 per cent above an area’s height limit if they meet a list of criteria.
Those criteria cover issues from neighbourhood amenity and design to whether a project benefits “housing choice and affordability”.
In 2023, developer Cielo Property Group applied to build an almost 34-metre-high tower at Pacific Parade in Bilinga, 10 metres above the suburb’s height limit.
The development was also more than double the permitted density, with one bedroom per 14.9 square metres compared with the limit of one per 33 square metres.
The site of a proposed luxury high-rise at 90–92 Pacific Parade, Bilinga. (ABC Gold COast: Dominic Cansdale)
But the City of Gold Coast approved the luxury project, finding it satisfied the exemption criteria, including by benefiting “housing choice and affordability”.
Nearby residents challenged that approval in the Planning and Environment Court but lost.
Court documents state the “very expensive apartments” would not provide affordable housing for low- to moderate-income earners, but could provide a “net community benefit to a more affluent segment of the market to meet their housing needs and choices”.
But the Court of Appeal found that to be “an error in law”, with its ruling “expected to have significance for other development applications”.
Limited definition for affordability
The Court of Appeal noted that the council’s planning scheme did not directly define “housing choice and affordability”.
But it did define “affordable housing” as “appropriate to the needs of households with low to moderate incomes, if the members of the households will spend no more than 30 per cent of gross income on housing costs”.
The council argued that “increased density is one way to increase affordability”.
Higher-density towers are set to spread further across the Gold Coast. (ABC Gold Coast: Dominic Cansdale)
But the Court of Appeal disagreed, finding that simply increasing the number of homes in a luxury development was not enough to satisfy the requirement for “housing choice and affordability”.
The Bilinga project has been sent back to the Planning and Environment Court for reconsideration.
Councillors will be briefed on the implications of the Court of Appeal’s decision on August 25.
The ABC understands a High Court appeal remains open to council.
‘Much wider implications’
Retired lawyer Michael Sparksman challenged another Bilinga development in the Planning and Environment Court last year, on the basis it harmed the area’s character and visual amenity.
He said the court had been “waving through any luxury development” on an incorrect understanding of “housing choice and affordability”.
“You can’t simply say that luxury apartments are affordable — luxury apartments are in the multi-million-dollar range,” Mr Sparksman said.
He said the Court of Appeal decision would have “much wider implications”, especially in the southern suburbs, where height limits had become a major community concern.
High-rise developments have been met with some resistance on the southern Gold Coast. (ABC Gold Coast: Dominic Cansdale)
“It sets the tone for this interpretation to run across all councils, certainly in Queensland but especially the Gold Coast where developers and council have run roughshod,” he said.
“Some existing approvals will probably be challenged.”
On Tuesday, the council’s Planning and Regulation Committee delayed a 40-unit luxury high-rise in Palm Beach, pending legal advice on how the Court of Appeal’s ruling could affect its approval.
Deputy Mayor and committee chair Mark Hammel said council was legally obliged to continue assessing development applications under the current planning scheme, but work was underway on a new scheme.
“This reinforces for me the importance of the work we are currently doing on the new planning scheme to deliver more certainty for the community and the most efficient and effective development outcomes for residents, the development industry and the courts,” he said.
Cielo Property Group has been contacted for comment.
