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Five years after a high-profile collapse and a public smackdown from the state government, Yarra City Council has voted to revive a controversial affordable housing project in Collingwood.
On Tuesday night, councillors unanimously voted to endorse a plan to release about 2000 square metres of council land for at least 50 rentals dedicated to key workers in the area who earn too much to access social housing but are priced out of the inner-north market.
The move marks a return to the site of a major spat between the then-Greens majority controlled Yarra council and the Labor state government before the 2022 state election in the marginal seat of Richmond.
At the time, the council conducted a feasibility study to build social housing on underutilised public land around the Collingwood Town Hall on Hoddle Street, which included 200 apartments in buildings three to five storeys high and sprawled across a number of parcels of land including state and privately owned properties.
The units would have comprised social housing, “affordable” rentals and private market apartments.
But the proposal fell apart after it was blocked by the then Greens majority council, which disagreed with releasing the land for anything but traditional public housing that would be built, owned and run by the state.
In 2021, then-councillor Stephen Jolly was the only outlier pushing to proceed with the Labor government’s deal, arguing it was a “once-in-a-lifetime opportunity” to secure homes for low-income workers during the COVID-19 stimulus window – a chance, he said, the council should not “throw away”.
Five years on and now under Jolly’s mayorship and an “independent”-controlled council, the idea is back on the table – albeit reduced from 200 apartments to 50. The new proposal is strictly limited to council-owned car park land behind St Philip’s Church, decoupling it from the state-owned properties that complicated previous negotiations.
Jolly sees the project as his defining legacy and says he has championed the site’s redevelopment since the original deal collapsed.
“I make zero apologies for this project,” Jolly said on Tuesday night. “This is the most exciting thing I’ve ever done in 22 years … We have to, as a council, not just look after the interest of home owners, but also the forgotten people.”
Residents who opposed the motion at Tuesday’s meeting expressed concern about what the development would mean for the local community – including reduced access to car parks, the removal of open space and the impact on neighbourhood character.
“I have no problem with the affordable housing,” resident Anya Kudlicki said at the meeting. “My problem is that I will be cut out … of the planning process in terms of an eight-storey building.
“In ratifying this decision to go out to expressions of interest, you are effectively locking out residents from commenting on this. It’s a heritage area … an eight-storey building in that area. It should be on a main road, if anywhere.”
All 50 apartments would be so-called affordable housing. To qualify, residents must be employed within the City of Yarra and earn up to 20 per cent more than the standard state income limits for affordable housing. Under these criteria, a single person earning up to $88,896 or a couple with a combined income of $133,332 would be eligible for a tenancy. For larger families or shared households, the annual gross income ceiling has been set at $186,660.
In addition to the higher income caps, the project parameters mandate that rents must be set at no more than 74.99 per cent of the local market rate.
Recent community consultation showed 46 per cent of respondents opposed the plan, primarily due to the new proposed eight-storey (25-metre) height limit. Heritage advocates warned the tower would overshadow the 140-year-old Collingwood Town Hall precinct.
The council is seeking a fast-tracked planning sign-off by the state government, allowing it to become the responsible authority rather than the council, and will proceed with an expression of interest process to lease out the land to a developer.
However, significant financial hurdles remain. The council has resolved not to fund or construct the project, and federal (the Housing Australia Future Fund) rules now require projects to include at least 200 dwellings to be eligible for funding.
With the Collingwood site capped at roughly 69 units, the council is effectively banking on a private developer to find the project commercially viable without traditional grant support – which officers said was unlikely given developer feedback.
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