Victoria’s Ground Lease Model has been expanded to deliver 1200 more homes across Melbourne’s inner suburbs by 2031.
And the social housing component of two major redevelopment sites has been pumped up by 39 per cent, the state revealed.
Housing minister Harriet Shing announced plans for 400 social homes and up to 300 affordable homes along Racecourse Road at Flemington, as well as 800 homes at Alfred Street, North Melbourne, including at least 300 social homes.
The Building Communities consortium will lead the Flemington development, building on its recent completion of 359 social and affordable homes on Victoria Street, Flemington.
The Government is now seeking expressions of interest for the North Melbourne development.
Under the Ground Lease Model, Homes Victoria leases land to community housing organisations to finance, design, build, manage and maintain housing for 40 years, after which the properties revert to government management.
The land remains in public ownership throughout. The model enables access to state and federal funding options not available through other delivery approaches, and rental income from market properties offsets the cost of building social housing.
The model has delivered successful projects at Brighton, Flemington and Prahran to date.
The New Street, Brighton, development replaced older homes with 291 modern homes, while the Bangs Street, Prahran, project delivered 434 new homes with a 90 per cent increase in social housing.
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Construction is under way at several sites, including Essex Street at Prahran, where 63 outdated homes will be replaced with 155 modern homes, and Simmons Street, South Yarra, where 204 ageing homes will be replaced with 522 new homes.
Both projects are scheduled for completion in 2026.
Meanwhile, the Barak Beacon development at Port Melbourne is to create 408 homes with a 46 per cent uplift in social housing. Amenities include parks, landscaped gardens, a multi-purpose community room and cafe.
The Ground Lease Model has faced legal challenges, including a Supreme Court class action on behalf of 479 public housing households that failed in its bid to obtain cabinet documents explaining the Government’s decision to demolish 44 towers.
Demolition has begun at Elgin Street at Carlton. Towers are also slated for demolition at Flemington (Racecourse Road), North Melbourne (Alfred Street), and Richmond (including Malvern Road, Highett Street, Anderson Court, Williams Court, and Elizabeth Street).
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The Government has signed a $100-million contract with John Holland to demolish the first five towers.
Independent research by Monash University’s Professor Nigel Bertram showed that retrofitting the towers could save up to 30 per cent in capital costs compared to demolition and rebuilding.
Critics of the approach, including Kerrie Byrne from the Save Public Housing Collective, argue the redevelopments primarily benefit developers while displacing existing tenants.
Despite criticism, the Government maintains its approach is necessary to grow social housing stock.
“Increasing the volume of new social housing on these sites by 39 per cent will give more Victorians the modern, energy efficient, accessible, safe and secure homes they deserve,” Shing said.
