Boroondara City Council has offered its broad support for a new $52.28 million eight-storey apartment and retail development in Hawthorn.
However, councillors have slammed the state government for allowing developers to make a cash contribution instead of committing to build affordable housing, arguing the benefits end up going elsewhere.
What’s the plan? Currently a 7-Eleven service station, the proposal sets out plans for an eight-storey, 51-apartment mixed-use development on the corner of Barkers Road and Glenferrie Road in Hawthorn.
The project would also create 477 square metres of retail space on the ground floor.
What happened: When projects of this size are built in Victoria, developers must abide by the Development Facilitation Program (DFP). Under the DFP, the state’s Planning Minister can make the final call on priority projects, like the Hawthorn tower, allowing them to skip council planning processes and public consultation.
Passing the bucks: Developers must also make an affordable housing contribution worth around 3 percent of the project, either by:
selling 10 percent of dwellings at a 30 percent discount to Homes Victoria or a community housing provider;
gifting them 3 percent of dwellings; or
paying 3 percent of the development cost into the Social Housing Growth Fund.
The developers of the Hawthorn block decided to make the cash contribution at three percent of the development cost – or $1,568,400.
What they said: One issue councillors have with the current DFP is that cash contributions, like that paid in Hawthorn, don’t have to be spent within the same council. Instead, this money goes to the state and is managed by the government.
Boroondara City Council has requested the state government spend the money on affordable housing in Hawthorn or Boroondara.
Boroondara deputy mayor Shima Ibuki, who is running as an independent in Hawthorn in the November state election, said the cash option was a “loophole” for developers. She said money paid instead of building affordable housing in Boroondara should be spent in Boroondara.
🗣️ “It gets paid to the state government, but we don't get to see it,” she told the Eastern Melburnian.
What’s next? A major overhaul of the planning system is scheduled to come into effect in late October 2027.
The reforms will ensure developers make affordable housing contributions in areas where a need has been identified and any cash paid will have to be spent on affordable housing in that council area.
The details, including how much developers will pay, haven’t been worked out yet. It’s also not clear if the change will apply to fast-tracked DFP projects.
Separately, developments in Camberwell Junction that apply for planning approval from January 2027 will pay a new charge of $11,350 for each extra home. Glenferrie and Hawthorn stations will follow in July.
Boroondara Council will keep two-thirds of that money for things like parks, footpaths and community facilities. However, none of it has to go to affordable housing.