The council will borrow $500,000 to proceed with the development, with another $300,000 to come from council’s capital works reserves.
Tender documents are being prepared.
The tender will be for the design and construction of two units at 47 Lewis Crt, Finley.
In a report to council, deputy CEO Matthew Hansen said the project will “help address a clear and compelling concern – the lack of suitable housing for key workers”.
“Leaving matters to the market to accommodate has brought us to the position we, and every other council find themselves in today,” he said in the report.
“Berrigan Shire Council has identified a need for additional housing suitable for key workers required to relocate to the area. This is not only for council employees, but also for workers in key areas such as health and aged care.
“Discussions with Murrumbidgee Local Health District (MHLD) and local aged care providers have also identified a similar gap in the rental market.
“Evidence suggests rental accommodation in rural and regional New South Wales, including Berrigan Shire, is very tight.
“There are limited rental properties available, especially in Berrigan and Finley.
“Rent is relatively high – both as a proportion of the value of the property and as a proportion of renter income - meaning they are not affordable.
“The quality of the rental stock is low, with most rental properties being quite dated.
“This project will provide additional suitable housing for key workers, in a manner aimed to be cost-neutral for council.”
Mr Hansen said the funding strategy for the project includes covering interest and operating costs from rental income.
The units are to be sold in 10 years - which is the life of the loan proposed - with the proceeds of the sale paying the principal and surplus (if any) used to fund the development of new housing.
Mr Hansen suggested council could also choose to reduce the cost of the loan by selling other properties it owns, which include a newly relocated house on Flynn St, Berrigan or a 15 year-old townhouse on Carter St, Berrigan.
Mr Hansen outlined that the major financial risk associated with the project is uncertainty as to what price council will obtain on the sale of the units in 2035.
He said the financial model suggests net proceeds of $850,000 from that sale would see council break-even.
Works are expected to span the period between November 2024 and May 2025.
