Lake Macquarie council has approved a 28-unit residential flat building on Brighton Avenue in Toronto.
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The five-storey development, worth close to $5 million, was unanimously approved at Monday's development and planning standing committee meeting.
The development had to be determined by councillors as the rear of the building exceeded the maximum building height of 10 metres by 24 per cent, or 2.4 metres.
The front is 16.6 metres high with the building tapering to the rear due to the site's steep topography.
It has a small commercial premises on the ground floor fronting Brighton Avenue.
A basement car park has 29 vehicle spaces, five less than required under the council's development control plan.
The deficiency was considered acceptable due to the proximity to the town centre and public transport.
No submissions were received when the development application was put on public exhibition last year.
West ward councillor Wendy Harrison said the development was an example of how Lake Macquarie could accommodate future population growth.
"Developments such as this, in locations like this, allows the infill [housing] council is seeking in our town centres while keeping valued open space free of development," she said.
Toronto was one of multiple areas across the city earmarked for "urban intensification", or denser development, in the council's local strategic planning statement adopted last year.
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