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<\/p>\nAn inner Melbourne council has halted plans to build new affordable housing for local workers priced out of the private market due to a lack of available funding for the project.<\/p>\n
The Yarra City Council project had already completed an initial expression of interest campaign for the building, which would transform a Collingwood car park into at least 50 discounted rental apartments.<\/p>\n
However, councillors unanimously voted to stop work on the project on Tuesday night after a panel reviewing the proposals identified “significant funding and delivery constraints”.<\/p>\n
Councillor Evangeline Aston said they were “disappointed”, but that council was always “very clear” it would not use ratepayers’ money to fund the project.<\/p>\n
“We were \u2026 [not going] to get into a field that we have no obligation to be in and to sign us up to ongoing operating and maintenance expenses,” Councillor Aston said.<\/p>\n
“The market reality determines the situation here and the reality is that the money is just not there.”<\/p>\n
Advertisements for the project showed the affordable rentals were to be built on a car park beside Collingwood Town Hall in Abbotsford. (Supplied: City of Yarra)<\/p>\n
Limited funding options<\/p>\n
Tenants in the eight-storey building would have had their rent capped at 75 per cent of the local rate, but had to be working in the municipality to be eligible.\u00a0<\/p>\n
To realise the project, the council had resolved to lease a 2000-square-metre parcel of land behind the St Philip’s Anglican Church to a delivery partner, but no further funding was guaranteed from the council itself.<\/p>\n
Council staff reviewing proposals from potential delivery partners found the project could not be delivered under the proposed model.<\/p>\n
“There is currently limited funding available within the sector and no clear state or federal government mechanism that enables local government to effectively deliver an affordable housing project of this type without significant external funding,” they wrote.<\/p>\n
At the meeting, Councillor Kenneth Gomez said the federal government should have worked with them to make the project happen.<\/p>\n
“Frankly, I’m disappointed in the federal government,” he said.<\/p>\n
“We went to them with outstretched hands saying, ‘Let’s do affordable housing in Yarra’, but it seems the rules around sizing worked against us.”<\/p>\n
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Sarah Toohey is calling on the Victorian government to provide more funding for affordable housing. (ABC News: Simon Tucci)<\/p>\n
Councillor Aston said council would continue to support social and affordable housing, and would reconsider the project if market conditions changed in future.<\/p>\n
“We will continue to advocate for funding, and if the conditions change,” she said.<\/p>\n
“We’ve done all the work, got all the preparation, we can pick this up and hit the ground running again to try and make the most of those conditions.”<\/p>\n
Community Housing Industry Association Victoria said of 13 Victorian council-led affordable housing projects over the past 20 years, all of them required state or federal funding to get off the ground.<\/p>\n
“Councils are on the front line of the housing crisis in their communities and they’re doing the heavy lifting to find solutions, but they can’t do it alone,” CEO Sarah Toohey said.<\/p>\n
“Whether providing land, opening housing trusts, or facilitating planning agreements, no council-led housing project has been delivered without a funding contribution from the government, and projects often involve multiple funding partners.”<\/p>\n
She said it was critical the state government committed to an annual funding pipeline so councils could deliver the social housing.<\/p>\n
She urged the City of Yarra not to abandon the project.<\/p>\n
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The land is currently being used as a car park. (Supplied: City of Yarra)<\/p>\n
The proposal marked a second bid to redevelop the Collingwood Town Hall precinct off Hoddle Street after a larger proposal with a mix of housing types was voted down by a previous council in 2021.<\/p>\n
It came in the midst of a significant uptick of approvals for affordable housing projects, partly driven by schemes that offer incentives for developments with below-market housing<\/a>.<\/p>\n
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