AbstractBat boxes are often installed as substitute habitats to offset the loss of large, hollow‐bearing trees. However, emerging evidence suggests that they are failing to achieve intended conservation outcomes as they only support generalist species. Despite these concerns, the effect of bat boxes on the dynamics of bat communities remains understudied. We assessed the bat community in reserves where bat boxes had been installed in comparison with reserves where they had not using ultrasonic surveys in 16 small bushland reserves throughout Sydney, Australia. Reserves containing bat boxes and those without had comparable species diversity and composition; however, the activity of the dominant species, Gould's wattled bat (Chalinolobus gouldii), was significantly higher at sites with bat boxes. Species that commonly forage in open vegetation, including C. gouldii, were significantly positively associated with sites that had bat boxes. Occupation of boxes by bats was not recorded in the study due to limited information on their locations, so further research is required to understand the direct effects of boxes and the bats that occupy them on the bat community. If bat boxes continue to be recommended as a biodiversity offset, a greater understanding of the potential impact they have on altered competitive relationships and community dynamics is essential.