News / Planning

Developer warns affordable housing at risk from council decisions

Nightingale seeks to increase building heights to deliver 58 low cost rental dwellings in next project

Nightingale Housing chief executive officer Dan McKenna at the site of the company’s 282 dwelling project in Hope Street.

Mark Phillips

A MAJOR apartment developer has warned that any moves to more strictly enforce council building height limits will impact its ability to deliver affordable housing in Brunswick.

Nightingale Housing, which has developed hundreds of new apartments near the Upfield line over the past half-decade, wants to provide up to 58 new affordable housing units in its next project in Hope Street, but to do so it needs to convince Merri-bek Council to approve building heights more than 10 metres above the discretionary limit.

The company suffered a setback in March when councillors voted 6-4 to reduce the size of another of its Brunswick projects in Florence Street from seven storeys to six, throwing into doubt the viability of affordable housing it had planned to contribute.

Nightingale, which has won plaudits for its approach to sustainability and affordability, is appealing that decision to the Victorian Civil and Administrative Tribunal.

Nightingale chief executive Dan McKenna said the company had a commitment to affordable housing but had to make the economics work through cross-subsidisation from apartment sales.

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The housing provider’s next project – dubbed Nightingale Village 2.0 – is one of its most ambitious yet: 282 apartments across five different buildings on an industrial site in Hope Street, adjacent to the Upfield line. The project cost has been valued at $90 million.

It would be nestled among several other high density apartment buildings currently under construction or seeking planning approval in the same pocket of land alongside the railway line between Hope Street and Ballarat Street.

Up to 20% of the dwellings “salt and peppered” within the Nightingale development would be pre-sold at cost to an affordable housing provider which would then rent them to low income residents on its database.

But the development faces significant hurdles on the path to approval due to its size, height and a large number of objections.

Ten objections have already been lodged, a number that is likely to grow by the time of the next meeting of the council’s Planning and Related Matters committee on June 28.

An artist’s impression of one of the proposed new buildings in the Hope Street project.

Mr McKenna said Nightingale was keen to avoid a repeat of Florence Street outcome. He said that if the VCAT appeal was unsuccessful, it would not be possible for Nightingale to provide the 10% affordable dwellings stipulated in its permit.

The Florence Street decision – and criticism of the developer by one of the councillors who voted to reduce the building’s size, James Conlan – shook Nightingale’s confidence in the Merri-bek planning system, but Mr McKenna expressed hope it was a one-off.

“We are right in the thick of a housing crisis in our cities right now, and we really hope that what we’re doing can be understood and supported,” he said.

Nightingale’s affordable housing model is cross-subsidised by sales of the other 80% of the project. But Mr McKenna said the economics of this type of arrangement were such that any reduction in the approved size of the project inevitably meant fewer affordable dwellings could be provided.

“The reality is that cross subsidy comes through the to-sale apartments that we offer. And so when there’s a significant reduction in the percentage of those that we can actually offer, that then shifts the balance between that cross subsidy and those community housing providers aren’t able to then match that cost.”

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Mr McKenna has been reaching out to community groups to explain the Nightingale model.

Nic Maclellan from the Brunswick Residents Network said a recent two-hour meeting was positive but had not changed the BRN’s concerns about attempts to remove residents and local government involvement in the planning process.

“There are many parts of the planning and construction industry urging for self-regulation and market forces to address the housing crisis,” he said.

“But in many cases, such as the cladding scandal, self-regulation has failed and there is still a role for all levels of government to regulate the housing market.

“Whether you are a not for profit or for profit, you still should have to follow the mandatory guidelines.”

Mr McKenna said he could understand community anger at perceived greed by the property industry during a housing crisis, but he was bemused that Nightingale had become caught up in the debate given the company has deliberately re-orientated to be a not-for-profit organisation.

“We do agree that there’s a lot that needs to be done and [that] we need greater investment in public housing here … I think where we do get puzzled is when Nightingale’s name gets thrown in as a big, bad greedy developer. We’re built a very different way, and we’re here for very different reasons.”

He said providing social and affordable housing in each of its projects was one of Nightingale’s objectives.

“There’s residents living in our buildings that have incredible stories, like people living in their cars for a couple of months, and now they’re in affordable rentals in Nightingale Village, living in a really thriving, healthy, sustainable community. I think they’re probably some of the stories that are missing in the planning debate.”

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