Land set aside for social housing to be sold off for private development

Crown land earmarked for social housing in Melbourne’s north – a project the Allan government last week insisted had not been dumped, despite removing it from its Big Housing Build scheme – is now being sold off to a developer for private homes.

The state government now claims the block at 18a Miller Street in Preston – where more than 140 social and affordable homes were to be built – was never part of the Big Housing Build, despite its own documents showing the site was in the program.

The government-owned land on Miller Street in Preston.Credit: Joe Armao

The Sunday Age can also reveal that the Victorian government has signed a $100 million contract with John Holland for the demolition of the first three tower redevelopments in Carlton, Flemington and North Melbourne, despite an ongoing class action to stop them being knocked down.

The state government quietly removed 15 sites from the Big Housing Build to cut costs, The Age revealed last week, leaving hundreds of new social homes – set to be built on state-owned land – without funding.

The $5.3 billion Big Housing Build was announced in 2020 to deliver 12,000 new social and affordable homes across the state over four years, but is now years behind schedule as construction costs rise.

The government insists each of the 15 projects will still go ahead and says it is seeking funding from other streams and from the Commonwealth to progress them. “These projects have not been dumped,” a Homes Victoria spokesperson told The Age last week.

But the state government is now planning to rezone and sell the Miller Street land to developers to build 140 homes. Most would be private, as long as 10 per cent were deemed affordable.

It is one of four plots identified in the Small Sites Pilot announced last week as part of a promise in the September housing statement to unlock underused Crown land for residential development.

“The site at 18a Miller Street, Preston was never part of the Big Housing Build,” a state government spokeswoman told The Sunday Age.

“We are making housing more accessible and affordable for everyone – which means investing in all types of housing, including social, affordable rental, assisted ownership and market rental.”

But a leaked Homes Victoria document obtained by The Age listed the Preston site as one of those that was being “deferred” under the Big Housing Build.

The land would have been used for 43 social homes and 98 affordable homes at a cost to the government of $91.07 million had it gone ahead, the document said.

Another project on the deferred list, the Fitzroy Gasworks, is also now being developed with private homes and 20 per cent affordable housing, rather than the 120 social homes promised under the Big Housing Build.

While the program is still set to build 12,000 homes in total, 1551 fewer will be constructed by the state on government land.

Instead, community housing providers will build more social homes and more affordable housing will be provided to make up for the shortfall, which will cost the government less, but can mean higher rents for the often vulnerable tenants.

Affordable housing rent is set 10 per cent below the market rate in Melbourne and at the market rate in regional areas. It is also capped at no more than 30 per cent of the median income in Melbourne or regional Victoria, depending on its location.

Separately, plans to raze and rebuild Melbourne’s landmark 44 public housing towers are moving ahead, with the state government on Thursday signing a contract with John Holland to demolish the first three.

A class action to stop the redevelopment of the towers is proceeding to trial in October.

The Carlton tower, which will be demolished first, is already empty, but tenants remain in the North Melbourne and Flemington buildings.

Under the plan announced in September as part of former premier Daniel Andrews’ sweeping housing statement, the towers will be rebuilt to house 30,000 people – three times the current capacity – by 2051.

Of those, 11,000 residents would be in social housing and the rest would be private tenants, with an unspecified number in affordable housing.

State opposition housing spokesman Richard Riordan said he feared the program would actually exacerbate the affordability crisis.

“This is an appalling betrayal of vulnerable Victorians and another broken promise by the Allan Labor government,” he said.

Greens public and affordable housing spokeswoman Samantha Ratnam said Labor’s decision to progress the demolition showed contempt for public housing residents.

“We need more public homes to fix this crisis. We should be using our public land to build more public homes, not spending millions to tear them down,” Ratnam said.

Last month, more than a dozen community representatives from the towers wrote to Housing Minister Harriet Shing and Homes Victoria chief executive Simon Newport about the distress of being moved from their homes and their fear of losing community connections.

The public tower in Racecourse Road, Flemington is one of the first public housing towers earmarked for demolition.Credit: Chris Hopkins

“These high-rise buildings are not just structures; they are the heart of our lives where we have forged friendships, built support networks, and cultivated a sense of belonging,” the letter from tenants said.

The government has said tenants would get the first right to return once the new estates were finished, and insisted the towers needed to be razed and rebuilt to improve livability.

The tenants said the alternative community housing they had been offered on Victoria Street was “wholly inadequate” for larger families, and called for any relocation or demolition to be halted until the government addressed their concerns.

Labor for Housing co-founder Julijana Todorovic welcomed progress on the tower redevelopments, but said Victorian Labor Party members were extremely concerned about what would replace them.

She said a genuine increase in social housing was needed, not just the 10 per cent extra promised.

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