Shoalhaven Council’s decision to reclassify land used by a homeless shelter, youth centre and disability services made me wonder whether this was an isolated decision. It is not. Across New South Wales, councils under financial pressure are reviewing the land they own, changing some properties from community land to operational land and creating the legal pathway for sale, redevelopment or longer commercial leases.
The language sounds administrative. Its effect can be substantial. Under the Local Government Act, council-owned land is generally classified as either community land or operational land. Community land has been set aside for public use. It can include parks, sporting grounds, natural areas and buildings used for community purposes. It must be managed under a plan of management and cannot simply be sold.
Operational land has far fewer restrictions. It can be leased commercially, redeveloped or sold. Reclassification does not automatically mean that a property will be sold, though it removes one of the major legal barriers preventing a sale.
That distinction became important in Shoalhaven this week. The council voted to proceed with the reclassification of several properties used by community organisations, including Safe Shelter Shoalhaven, Nowra Youth Centre, Noah’s Inclusion Services and Werninck Craft Cottage.
Safe Shelter Shoalhaven provides crisis accommodation for up to 12 people experiencing homelessness. The youth centre provides a place for young people. Noah’s Inclusion Services supports children with disabilities and their families. These are not vacant blocks tucked behind a council depot. People are using them.
The ABC reported that the organisations learned their properties were being considered only when the council report became public. The council’s chief executive apologised for the lack of consultation. Shoalhaven Council manages more than 3,100 parcels of land. About 1,700 are already classified as operational. Its property sales program includes isolated and underused land, land with strategic development potential and what it describes as underperforming community facilities. Council says community land must first be reclassified before it can be sold.
The question is not whether councils should ever sell land. Councils acquire properties for many reasons. Some become surplus. A small block may have no public access. A former depot may no longer be required. Selling genuinely unused land can release money for services or infrastructure the community values more.
The problem starts when council looks at a building and sees only the land beneath it. A homeless shelter occupies a valuable site. A youth centre brings in little income. A disability service fails the spreadsheet test. The market calls that underperformance. The people who rely on those places may call it the difference between being supported and being abandoned.
Central Coast Council offers one of the clearest examples of how financial crisis can turn public land into a source of emergency cash. After the council’s financial collapse in 2020, administrators began an extensive asset sales program. Properties were divided into those already classified as operational land and those requiring reclassification before sale.
Council reports openly stated that some community land would be reclassified and sold for no less than market value.
The council knew the process could take up to 18 months, with public exhibition and formal planning approvals along the way. This was not a debate about the future of public land. It was a plan to raise cash.
Kiama followed a different path with Blue Haven Bonaira. The land contained a modern aged-care and retirement complex completed in 2019. It had become community land by default because the council failed to classify it as operational within the required period after acquiring it.
The Blue Haven Bonaira case shows why every reclassification deserves to be judged on its own facts. This was not a neighbourhood hall or a sporting field. It was an aged-care facility built with substantial public investment that also included the heritage-listed Barroul House. The project later became central to Kiama Council’s financial crisis after the Auditor-General found construction costs had been underestimated by around $30 million. Council argued the land had become community land through an administrative oversight and that reclassification corrected its legal status. Community submissions took a different view, arguing that the public investment and heritage value strengthened the case for keeping the land protected. Whatever position people took, reclassification was the legal step that made the eventual sale possible.
Sutherland Shire Council offers another scenario. When it proposed reclassifying land at North Cronulla Surf Life Saving Club, community consultation led to a narrower approach. Only the part of the site containing commercial tenancies was reclassified, while the rest remained community land. Instead of treating the whole property as a single financial asset, the council separated the income-producing area from the part used for community purposes.
Sutherland Shire Council showed that reclassification does not have to be an all-or-nothing decision. After consultation, it reclassified only the commercial section of the North Cronulla Surf Life Saving Club site and kept the rest as community land. That is the broader lesson. Councils can separate the parts of a property that generate income from the parts that serve the public. Reclassification should not become a blunt instrument for turning an entire community asset into something easier to sell.
Shoalhaven’s decision is not just about one council or one group of community organisations. It raises a broader question about how councils plan for the future.
Kiama’s experience is a reminder of what can happen when long-term asset management falls behind. After selling Blue Haven Bonaira to deal with one financial crisis, the council is now facing more than $50 million in identified upgrades at its remaining aged-care facilities, including major fire safety works.
Every council faces ageing infrastructure and rising costs. Community assets will sometimes need to be sold. The question is whether those decisions are part of a long-term strategy or whether they are being made one property at a time as the next financial pressure arrives.
Communities deserve that conversation before their local hall, youth centre, homeless shelter or disability service appears on a list. Once it does, planning has already failed and the community is left fighting to save what council should have planned to protect.
This article is part of a series examining the decisions that shape our communities long before most people hear about them. I am following the stories behind local government decisions to better understand how public assets are managed, how communities are involved and what those decisions mean for future generations. See my first blog in the series here