Inner Melbourne council walks away from plan for key worker housing

The City of Yarra has abandoned plans to construct affordable housing for key workers in Abbotsford, citing insufficient funding as the reason. At a council meeting, councillors unanimously decided to halt the project, expressing disappointment but emphasizing that the council would not use ratepayers' money to finance it. The Urban Development Institute of Australia stated that there is a growing funding gap for affordable and social housing projects in Victoria.

The council had planned to transform a Collingwood car park into 50 affordable rental apartments, with tenants' rent capped at 75% of the local rate, provided they were employed in the municipality. The project's feasibility was hindered by a lack of government funding and unclear mechanisms for local government to deliver such projects without substantial external funding.

Councillor Eva Aston noted that the market conditions were not favorable for the project. The council plans to reevaluate and potentially revisit the project if market conditions change in the future.