Macaulay planning inertia continuing to prove costly

Residents and planning experts say developers are being given free rein in Macaulay and that the state government’s slow progress in legislating long overdue planning controls is already having lasting negative impacts on the precinct.  

The Macaulay Structure Plan, which was endorsed by the City of Melbourne in November 2021, establishes the planning framework for future development of the precinct.

In June this year, Minister for Planning Sonya Kilkenny finally approved the structure plan for public exhibition after nearly two years following pressure from the council and the community. 

But former City of Melbourne urban designer Andy Fergus told North West City News that while the new structure plan and planning controls will become an effective guide for future development in the precinct, many developments will have already been approved under existing controls. 

He added that under the existing planning controls from 2018, certain areas, such as the series of build-to-rent projects around Macaulay Rd, developers had been able to achieve a height bonus from six to eight levels in exchange for providing a community benefit as part of their projects. 

“Unfortunately, the framing of the bonus criteria is incredibly limited and is considered by planners and urban designers to have not been a successful example,” Mr Fergus said. 

It requires you to argue case by case for what ‘community benefit’ constitutes, rather than providing certainty around, say, x percentage of social and affordable housing, new laneways or open space. This doesn’t provide much clarity for developers or the community.

Speaking in June following Minister Kilkenny’s long-awaited decision to authorise the structure plan for community engagement, then Deputy Lord Mayor Nick Reece raised similar concerns. 

He said that while the public exhibition of the plans was a “step forward” amid what had been a drawn-out process, too many apartments had been approved without the supporting community infrastructure.

Developer Assemble has completed three projects alone, Local is now welcoming the first residents into its project at the corner of Macaulay Rd and Stubbs St, and Greystar has begun construction on a 447-apartment block. 

In a recent edition of North West City News Kensington Association president Simon Harvey referred to the influx of mid-rise development in the heart of the precinct as the “Macaulay Canyons”. 

“Macaulay Rd is fast becoming an asphalt avenue bordered on both sides by a canyon-like drop (no set-back it seems) from imposing eight-storey apartments,” Mr Harvey said. 

However, in other cases, apartment projects that have been approved in the precinct are unable to get off of the ground due largely to the current economic constraints affecting the construction sector. 

In August, the Australian Financial Review reported that a $40-million construction cost blowout had killed a $750m housing project at 59-101 Alfred St, North Melbourne and the site was repossessed by non-bank lender Metrics.

Only a few blocks away at 69-75 Racecourse Rd, a 96-apartment project with an approved permit is currently in the hands of receivers SV Partners. 

RMIT's School of Property, Construction and Management Associate Professor Trivess Moore has questioned whether developers want to proceed in the current climate. 

Prof. Moore said it was not a favourable time to build due to the overstretched capacity of the market, particularly off the back of labour shortages caused by the state government’s Big Build projects. 

However, in addition to such challenges, experts argue that elements of the Macaulay Structure Plan could have been strengthened to ensure better outcomes for the precinct into the future. 

Affordable housing is one aspect of the plan that has missed the mark given the city’s shortfall of 6000 affordable homes, according to Prof. Moore. 

The City of Melbourne has committed to achieving an affordable housing target of six per cent across the precinct which it hopes to achieve through targeted planning controls. It is also seeking to to deliver up to 25 per cent of affordable housing on council-owned land. 

Prof. Moore said that he would like to have seen a higher target within the Macaulay Structure Plan due to the precinct’s proximity to the CBD. 

Outgoing City of Melbourne planning portfolio lead Cr Rohan Leppert said that the planning scheme amendment for Macaulay, which has just been exhibited, had no affordable housing requirements. 

“There is an aspiration in the policy that says that six per cent should be provided, but that is entirely discretionary,” Cr Leppert said, adding that the Minister for Planning exhibited the amendment under the condition that the mandatory nature of the target be removed.  

He also noted that while many developments approved and constructed surrounding Macaulay Rd had garnered local criticism, many of them were well built and designed projects. 

“It’s not everyone’s idea of preferred density, but the quality is generally high,” he said.  

Cr Leppert said he was a firm believer that once the new planning controls were in place for Macaulay, the precinct would greatly benefit. •