If we build it, will they come? Developer rails against council demand for high-density housing

An empty paddock on Melbourne’s south-western periphery has become ground zero in a legal battle over whether it is time to build high-density apartment buildings in the outer suburbs.

On one side of the looming Supreme Court case is property developer Peet, which has applied to build a 414-home estate in booming Tarneit.

A planned estate in Tarneit has become a legal test of whether apartments up to five storeys high should be built in the outer suburbs.Credit: Alamy

On the other is the City of Wyndham, which, in alliance with state authority Transport for Victoria, has said no.

The council and the transport department both insist that the housing estate must be taller and denser with apartment buildings up to five storeys high in some parts of the estate, which is located in a growth corridor about 30 kilometres from the CBD.

Peet’s plans are mostly for low-rise, detached dwellings, with just 4 per cent of lots in the estate reserved for “medium density” homes.

This would be a wasted chance to build a more walkable, less car-dependent neighbourhood in one of the city’s fastest-growing suburbs, Wyndham has argued in rejecting Peet’s application.

Transport for Victoria has backed the council’s decision for one key reason: the $3.65 billion regional rail link runs through the estate, and the department plans to build a new $129 million station there within three years, in keeping with a Labor promise at last year’s state election.

Peet’s housing proposal “fails to respond appropriately” to the planned Tarneit West station, and if built, “may result in the benefits of the transport upgrade project not being fully realised”, Department of Transport secretary Paul Younis wrote during a Victorian Civil and Administrative Tribunal (VCAT) hearing early this year.

The tribunal agreed, upholding Wyndham’s refusal to grant a permit, with senior member Margaret Baird noting in her decision that “there is clearly strong policy support and direction for increased densities associated with activity centres and transport infrastructure such as train stations”.

Last month, the Victorian government announced its long-awaited plan to tackle the state’s housing crisis, including “priority precincts” around major transport where developers will be enticed to build with faster approvals and taller height limits.

Peet has appealed to the Supreme Court. Its notice of appeal, obtained by The Sunday Age, argues that the tribunal’s decision in February “failed to provide adequate reasons” for upholding Wyndham’s decision to refuse a permit.

It had argued to VCAT that its housing proposal exceeded the existing density measures set in the council’s own precinct structure plan for Tarneit’s north, which was published in 2014.

It also argued that its mostly low-density housing plan could not be changed “due to the lack of market for apartment/stacked housing outcomes in growth areas currently”.

Peet managing director and chief executive Brendan Gore said he could not comment directly on the matter as the company was awaiting a Supreme Court hearing, “but we are working with the relevant organisations to reach a resolution”.

Terry Rawnsley, urban economist at KPMG, said the developer’s reluctance to build stacked apartments in Tarneit was understandable given the near total absence of high-density dwellings in Melbourne’s outer west.

“At the moment there is no strong market for higher density housing in that part of Melbourne, so the developer is saying, ‘This is the product we know that will sell’,” he said.

But the position of the council and the department was equally understandable, he said.

“There will be a station here that will underpin higher densities. The council and the department are saying, ‘We’re about to drop a lot of money on a station, and we want to maximise the benefit’, which makes sense.”

Rawnsley said there was a risk that if Peet lost its appeal, any lots mandated for high-density dwellings could lie vacant for several years because the housing market won’t support the plan.

“It’s the worst outcome because then you’re not getting any housing,” he said.

A station has been proposed at Tarneit West since the regional rail link opened in 2012.

Jago Dodson, professor of urban policy at RMIT University, said Melbourne faced “a big strategic question” about how to shift away from the deeply ingrained single-storey model of suburban development to a higher-density model.

“The major challenge for future suburban development is to move to high-density dwellings but not have the same high level of car dependency,” Dodson said.

“If it isn’t designed to be car dependent then it should be encouraged, even in growth areas.”

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