Piloting affordable housing on surplus government land: Victorian Local Governments demonstrate what is possible

ADO KateLatest

There is a growing and positive trend amongst Victorian Local Governments to commit and support delivery of affordable housing outcomes on surplus Council land.  As we eagerly anticipate details of the Victorian Government’s commitment to pilot surplus and underutilised State land it is interesting to reflect on the number of Councils that have already pushed ahead with their own programs using their limited resources to achieve positive housing outcomes.

Examples include:

  • City of Port Phillip – a trailblazer in using Council assets towards affordable housing, particularly air-rights over car parks, Port Phillip has demonstrated not only a high degree of policy commitment but a strong follow-through into on-the-ground outcomes. The Council’s leadership continues in its latest Affordable Housing Strategy with a commitment to direct investment of $30 million of Council property assets and supporting cash contributions. Project examples include:
    • Inkerman Oasis: a former Council depot developed in partnership to deliver 28 community housing units as consideration to Council for the land plus an additional three units purchased by the Department of Human Services and one by a community housing investor.
    • Kyme Place, Port Melbourne: a 27-unit community housing project, developed in 2012 in partnership with Port Phillip Housing Association in air space over a replacement Council car park.
    • Blessington Street, St Kilda: 26-unit development developed by Port Phillip Housing Association (PPHA). Council supported the project through enabling a land exchange between Council and a private developer.
  • Melbourne City Council – the City has supported a number of significant developments on its land and is continuing to demonstrate its commitment to affordable housing through the release of Council land assets with aspirational affordable housing targets reflected in tenders. Examples include:
    • Drill Hall: Council owned site that was redeveloped by Housing Choices Australia under the Nation Building Stimulus including a refurbishment of the heritage listed 1937 Royal Melbourne Drill Hall and the addition of 58 new social housing units. Melbourne City Council transferred the land to Housing Choices for no cost and then leased back the original Drill Hall for a 99-year period.
    • Common Ground, Elizabeth Street: The Council contributed to the development outcomes through the discontinuance of Council Lane 1014, valued at $210,000, and sale of the property to Yarra Community Housing, site owner, for $1.00.
    • Queen Victoria Market redevelopment – Munro Street redevelopment: Council purchased the land in 2014 and is proposing a significant redevelopment to include up to 15 per cent affordable housing. Negotiations with the preferred tenderer are under way with development expected to commence in 2017.
    • Boyd High School: The redevelopment of the former High School which was acquired by the Council from the State Government in 2007 will include 20 per cent (46 apartments) affordable housing together with a range of community facilities. The Council is foregoing part of the land value to support delivery.
  • City of Darebin: The City has undergone a detailed process of reviewing Council assets and assessing their appropriateness for affordable housing as well as testing market interest with community housing providers. In April 2016 the Council endorsed three Council owned sites under the Darebin Social and Affordable Housing Program on Council Owned Land – Pilot Project and is understood to be seeking State Government support.
  • City of Whitehorse: The City has recently released an Expression of Interest for a surplus Council land-holding in Box Hill, with an objective of a minimum 40 social rental dwellings.

These, and many other examples, demonstrate that where there is political will, backed by policy and financial and funding arrangements, surplus government land or air rights over facilities can be used to generate positive social, economic and environmental outcomes for individuals and the community and and return to Local Government in the form of affordable housing.

The contribution of Council land at nil or minimal cost towards these outcomes is clearly one key element that has made these projects successful.  Community housing organisation’s ability to access government funding and debt financing has then been required to develop.

As the State Government works to finalising its surplus land policy commitment it would be valuable to learn more from these experiences; what worked, what didn’t, how were the deals structured, what was the value of the Council’s contribution, and what other funding was required?

With the scale of challenge ahead of us the time for piloting on surplus or underutilised government assets is over.  Let’s get on with long-term commitments supporting delivery at scale using surplus Federal, State and Local Government land assets drawing on the experiences of Councils and their partners as a basis from which to leap.