The City of Karratha will press ahead with a bold and unusual move to increase housing stock by stimulating the city's property market.

Key points: Rents in Karratha have skyrocketed in the past six months, and they could go even higher with an expected resources boom

Rents in Karratha have skyrocketed in the past six months, and they could go even higher with an expected resources boom An online petition wanting to stop the city's investment program was presented to council

An online petition wanting to stop the city's investment program was presented to council A cost-of-living report has found the Pilbara to be one of the two most expensive regions in WA for working families

Median rents in Karratha have risen from $550 to $800 in the past six months and are continuing to rise, prompting council to investigate five of the 15 proposals it received from builders for joint building ventures.

Online surveys by council have shown the top three issues for residents in Karratha districts were airfares, insurance, and high rents.

The council was disappointed to learn that none of the building proposals scored higher than 75 out of 100 in assessments by development specialist APP.

As a result, negotiations and tweaking of proposals will be sought to find at least one that meets council's criteria of high-quality, affordable accommodation.

Additionally, after talks with Development WA (Landcorp), the council has encouraged further development of $550,000 house-and-land packages on empty blocks of outer suburbs left bare after the last boom ended.

The Karratha suburb of Madigan has many empty blocks of land waiting to be developed ( ABC Pilbara: Susan Standen )

While the city can potentially inject up to $35 million of ratepayers' money into the local development of real estate, the council said it did not want to spend any money but needed the market stimulated to prevent liveability scores declining.

Mayor Peter Long said the council was committed to transparency, so will hold a public meeting after the next round of proposals when a further decision is made on whether to proceed with any of the revised building development proposals.

"Criteria include how rapidly these developments could occur, how they would stimulate the housing market, whether it would deliver a financial return for council, and how suitable it is for our general objective, which is to support those on a lower income who can't stand the higher rents," Councillor Long said.

He said it was important to develop diverse offerings for families who need a block of land with space and single people who only need a one-bedroom apartment.

Building is not expected to commence until the second half of the year to meet demand for an anticipated resources boom.

Online petition presented

Some residents were concerned their private housing investments would be negatively affected by the council's plans.

An online petition by Rodney Thompson with more than 2,500 signatures to stop the City of Karratha housing investment program was presented to the council.

"Thousands of residential property owners and ratepayers, including myself, are absolutely furious that the council plans to build houses and apartments in town with their main goal being to keep rent and sale prices down," Mr Thompson said.

"The petition is to express our objection to the City of Karratha spending any money whatsoever on any proposal or business plan developed under the program or on any residential property development or investment at all."

Mr Thompson believed it was unfair and unjust to use ratepayers' money to manipulate the housing market.

"If we flood the market with too many permanent properties, the market will crash — worse than it did last time," he said.

"While we don't think it's fair that the renters should have to pay the huge rents that they did during the last boom, we don't believe that they're going to get that high."

Community organisations welcome the plan

Many community groups that service low-income workers have publicly supported the council's move to improve liveability in the city.

The Western Australian Council of Social Service (WACOSS) conducted a cost-of-living report in 2019 that found the Pilbara was in the top two most expensive regions in the state to rent for working families.

WACOSS believed the project was a sensible measure to future-proof the community so that people could access affordable housing options.

They also wanted further investment from the State Government on social housing in the region.

Disability organisation EPIC supports the City of Karratha's building investment program. ( ABC Pilbara: Susan Standen )

Letters of support were also received from Karratha Central Healthcare and disability organisation Empowering People in Communities (EPIC).

EPIC chief executive Stephanie Soter wanted to see long-term residential investment outside of the needs of the mining and construction industries.

"By opening up construction of new houses and softening the market in terms of supply, it means that prices will become a bit more normal," she said.

"Typically we employ a lot of people working in community services as support workers who do not earn a high income.

"A lot of people do tend to leave town when those booms come.

"I don't think it's going to ruin the market in terms of rental [investments]; bringing it back to normalised levels is a great thing."

Land to be developed

All the necessary infrastructure of water, power and land development for more housing was delivered as part of the previous government's Royalties For Regions program.

Development WA (Landcorp) said it was in a position to assist the City of Karratha with the housing investment program with the supply of serviced and appropriately zoned land, as well as facilitating discussions with builders, developers, and project managers.

"We are partnering with local builders and undertaking research to ensure we're delivering the best new sustainable and affordable housing options for Karratha in our estates," chief executive Frank Marra said.

"We're committed to providing vibrant, quality places for people to live in Karratha.

"Our Madigan, Mulataga, Baynton West, Warambie and Tambrey residential estates have so far delivered more than 1,300 dwellings for the city's growing population, with a strong pipeline of up to 3,000 lots able to be released in the coming years."

It will be releasing a prime lot in the centre of town for mixed development, up to 35 dwelling lots in Baynton and Madigan Estates, and inviting proposals for more development at Tambrey Neighbourhood Centre.

It was also planning the release of more Madigan Estate lots and working with builders on new house designs in March and April with a view to build up to five homes in Madigan for sale or rent.

Late 2020 will see new residential lots released in Baynton, while 1,400 lots at Mulataga Estate and 600 lots at Madigan that failed to get up during the last boom will have advanced structural planning for the future.

A new display village will be built at Madigan to show potential buyers the range of options for owner-occupiers.

More investor-owned stock in the Pilbara

Real Estate Institute of WA (REIWA) president Damian Collins believed the $35 million would not affect house or rent prices.

"In a town of around 7,000 properties, the amount the city is planning to build is tiny so it won't have much impact at all," he said.

"The only thing it might help is to get the building industry back up and running, but in terms of house prices and rental prices it's going to be negligible.

"The best thing the government can do is make sure there's plenty of land available and get approvals through quickly."

In the Pilbara, the high level of investor-owned stock — around 70 per cent — is the reverse of traditional capital city ratios of owner-occupied and investment rentals.

In Perth, about 70 per cent of houses are owner-occupied, with the remainder either rentals or social housing.

In a statement, the Department of Communities said it was conscious of the renewed growth cycle in Karratha stemming from increased activity in the resources industry.

"As part of this growth cycle, it is important housing remains accessible to all sectors of the community including teachers, police, health staff, and other essential service employees," assistant director-general of commercial operations Nigel Hindmarsh said.

"In this context, the department strongly supports the city's initiative to attract investment in new housing in Karratha.

"The department is undertaking an assessment of locations with a view to development through the State Government's housing and homelessness investment package.

"A portion of this investment will be for new properties in the Pilbara."