A Johnston St, Fitzroy, build-to-rent complex approved by the Victorian government will host mor ethan 240 new homes.
Melbourne’s rental market is set to be buoyed by almost 800 new tenants-only homes after the state government approved a pair of projects worth close to $330m combined.
The green light from Planning Minister Sonya Kilkenny includes a 38-storey complex next door to Marvel Stadium and is a step towards maintaining the city as the nations’ capital for build-to-rent housing projects after recent data suggested Sydney was gaining ground.
But with at least one of the developers expected to tip in several million dollars in cash for the Social Housing Growth Fund as part of the government nod, affordable housing groups have called for more transparency on how much money is entering the state’s coffers from similar arrangements.
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The new complexes include a $257m, 38-storey Docklands tower with an expected 554 new homes, including 138 studio apartments and 231 one-bedroom residences, though only 96 carparking spaces.
It will be built on La Trobe St, next to Marvel Stadium.
The second site, a $72.5m Fitzroy project that will host 243 homes across an 11-storey build, almost half of them (115) studio apartments — typically the cheapest offering in build-to-rent projects.
A La Trobe St, Docklands, build-to-rent tower is set to add more than 500 residences to the city’s rental supply by itself.
Located on Johnston St, it will have shops and trams on its doorstep.
Approved under the state’s Development Facilitation Program it will also come with a contribution to the SHGF equivalent to having 10 per cent of its homes being available as affordable housing.
The Docklands tower will have 4.6 per cent of its value above $75m set aside for affordable housing, though it has yet to be confirmed if that will be in the form of homes inside the complex or if it will be a contribution to the City of Melbourne for affordable housing.
Ms Kilkenny said the approvals were important for Melbourne.
“Victoria is proudly the build-to-rent capital because we’ve backed this model from the start,” she said.
“We’ve approved hundreds more homes in the inner-city to give renters more choice to live close to the things that matter to them.”
Build-to-rent sites like the Johnston St, Fitzroy, site are not always suitable for affordable or social housing to be included within them — but support cheaper housing options with contributions to the Social Housing Growth Fund.
About 34 of the homes across both projects will be family-sized three-bedroom apartments.
Build-to-rent complexes in Melbourne are able to effectively halve their land tax for 30 years and to dodge the Absentee Owner Surcharge under specialised tax arrangements the government has in place to attract them — which has helped make Melbourne the national capital for the building type.
However, recent data from BDO Australia showed build-to-rent approvals for Sydney through to 2031 were 72 per cent higher than Melbourne.
As of March this year BDO had forecast 17,250 such homes to be available in Sydney by 2032, compared to 24,765 in Melbourne.
Melbourne’s housing market is set to get a significant boost after hundreds of new homes were approved for tenants on the city’s fringes.
Community Housing Industry Association chief executive Sarah Toohey said developer cash contributions to the Social Housing Growth Fund were a vital part of supporting those struggling to afford rent — but said more transparency was needed around how much money was being tipped in by developers and which suburbs the funds were coming from.
A government spokesperson indicated there had been more than $25m contributed under the DSP since the program was expanded in September, 2023.
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