The train station car parks being sold off for hundreds of new homes

Commuter car parks at Oakleigh and Footscray train stations are being sold off to private developers to be turned into apartments, but the government is under fire for failing to enforce an affordable housing target more ambitious than the bare minimum.

Tender documents released by the state government show that two slices of land earmarked for the development of about 240 new homes during Premier Jacinta Allan’s housing announcements last month are car parks owned by government agency VicTrack.

The documents, prepared for the government by property agency Savills, call on developers to submit their interest in acquiring the sites – each about 2500 square metres – to deliver new homes close to public transport.

The projects must have at least 10 per cent affordable housing – the minimum expectation for a development plan to receive fast-tracked approval by the planning minister.

Planning experts and public housing advocates have criticised the state government for wasting an opportunity to transform prime slices of public land into social and affordable housing.

Gabrielle de Vietri, the Victorian Greens’ housing spokeswoman, said public land was being handed over to private developers instead of delivering public and “genuinely affordable” housing.

The car park at Footscray station.Credit: Jason South

Under the state’s Planning Act, affordable housing can include a home in Melbourne that is suitable for a single adult on a moderate annual income of up to $73,530, or a family with a combined income of up to $154,410.

“To fix this crisis we desperately need more public and affordable homes on public land,” de Vietri said.

“This is ... a slap in the face for the hundreds of thousands of people who are struggling to afford a home.”

Urban Design Forum president Katherine Sundermann supported apartments next to train stations, but said it was a missed opportunity for more social and affordable housing, and called for a focus on innovative sustainable development.

The car park at Oakleigh train station.Credit: Wayne Taylor

Sundermann backed a target of 50 per cent affordable housing for new developments on public land, mirroring a rule that has been set in London.

“Government land is a finite resource. We’re not making more of it, so we need to think about how to generate the most public value … and what the best long-term outcome is,” Sundermann said.

Victorian Public Tenants Association chief executive Katelyn Butterss said it was shameful for public land not to be used for any public housing, with about 60,000 households on the waiting list.

She was disappointed that there had been no announcements for those who were doing it the toughest.

“Public housing would deliver safe homes for the broadest range of people including those who most need it, and who would still find affordable housing to be out of their reach,” she said.

Allan said in October that she expected about 240 homes to be built across the two sites and developers would be required to start construction within 18 months.

About 100 car spaces in Footscray and 70 in Oakleigh will be ripped up. The government plans to build replacement commuter parking elsewhere after the existing car parks are sold off.

The plan for the Oakleigh site would involve acquiring a 343-square-metre parcel of land from Monash City Council.

Josh Fergeus, a Monash council candidate who is likely to be re-elected based on the local government vote count so far, said the site was ripe for apartment development, but the 10 per cent affordable housing target was “pathetic” given the housing crisis.

“No developer will come in and build 50 per cent social housing when they can get away with 10 per cent affordable housing,” said Fergeus, who quit the Greens in April.

“You only get an opportunity to do this once, and the return to the community will be vanishingly small.”

A spokesman for Minister for Development Victoria Colin Brooks said the development plans would allow more young people to live in their preferred community and accused the Greens of blocking homes from being built.

“We have released an expression of interest for developers to accelerate housing supply in locations that are close to public transport, jobs and services,” he said.

Tender documents state that a developer proposal will be selected to ensure “an appropriate financial return” to the Victorian government and a flexible deferred settlement will be allowed.

Kilkenny’s spokesman would not comment on the proposed terms of the deal due to commercial sensitivity.

He said VicTrack reinvested its revenue from land sales back into the public transport system.

VicTrack’s annual report, released on Thursday, shows the rail agency sold $5.4 million worth of land in the 2023-24 financial year, including properties at Kilmore and Maldon and bordering the Dandenong Ranges National Park.

RMIT transport researcher Chris De Gruyter supported redeveloping the car parks because they were a highly inefficient use of desirable land.

But De Gruyter said funds from the sale would be best spent on improving public transport access and services, as building a replacement parking could cost up to $100,000 per space.