Council selects partner for key worker housing project in West Melbourne

The City of Melbourne has selected a preferred community housing provider (CHP) to develop new affordable housing for key workers on council-owned land in West Melbourne.

The proposal – set for 325–341 Victoria St – will deliver 32 dwellings providing long-term, low-cost housing exclusively for essential workers on low to moderate incomes, including teachers, nurses and counsellors.

The council-owned site, currently an open-air car park, will be leased at a peppercorn rent of $1 per year for up to 50 years, with the selected provider responsible for funding, building, and managing the homes. However, the CHP cannot be made public until the lease negotiations are finalised.

“This project will provide a valuable pilot and testing ground for a tailored housing model that supports Melbourne’s essential workforce,” the council report stated, noting that the model could be replicated by other housing providers and agencies.

The development will include a mix of one-, two-, and three-bedroom apartments, 11 car spaces, rooftop communal areas, and around 217 square metres of ground-floor retail space to activate the street frontage.

At the October 28 council meeting, Cr Davydd Griffiths said the project would help reduce commuting pressures on essential workers and would be a boon to the local economy.

“If you had stood outside North Melbourne Station on those days when the rest of the city was shut down, there were still streams of people coming in on public transport, often from a long way across the city to work in those major institutions,” Cr Griffiths said.

“By building facilities like this, we’ll remove the need for those people to be travelling in from far-flung suburbs and ensure that they can access their workplaces more easily,” he added.

“It also means those workplaces can access workers more easily – and, of course, there’ll be a good economic uplift for local shops, which will have more of a population to draw on.”

While councillors unanimously supported progressing the lease negotiations, some expressed concern about the limited scale of the project and questioned the city’s broader housing approach.

Cr Andrew Rowse said that while he supported the motion, he was frustrated that the council had to rely on small-scale developments when thousands of apartments across the city sat vacant.

Tonight, there’ll be 2500 empty apartments within the CBD and Southbank that we could actively go and pursue if this was an area we wanted to focus on, Cr Rowse said during the meeting.

“Last council meeting, we approved a 52-storey development that provided just one affordable apartment as a net public benefit. So, while I support this motion, I think it’s disappointing we aren’t pursuing the bigger and broader issues more directly.”

The project follows extensive community consultation and input from a 13-member Project Reference Group (PRG) made up of residents, traders, and people with lived experience of affordable housing.

The PRG helped shape the project’s “Community Assessment Principles,” which were used to evaluate bids from potential housing providers.

The Lord Mayor’s Charitable Foundation has also committed $1 million in principle to support the project through its Affordable Housing Challenge program, pending final trustee approval.

Council documents show that the city faces a shortfall of around 13,000 affordable homes, with 67 per cent of households in the City of Melbourne renting their homes.

The Victoria St project is part of the council’s Affordable Housing Strategy 2020–2030, which prioritises using council land to deliver more affordable rental housing and support key workers. •