Developer quietly guts ‘affordable’ housing promise in northern suburbs

A developer that branded itself the ethical alternative to a profit-driven industry is moving to slash affordable housing quotas at two major Melbourne projects – two years after the state government granted it controversial height concessions.

The developer, Assemble Communities, has applied to the state government to water down the “affordable” components it promised at new builds in Brunswick and Coburg, just months before construction finishes.

Under its proposal, the developer would ditch its signature “Build-to-Rent-to-Own” model at the projects, in Victoria Street, Brunswick and Sydney Road, Coburg.

Together the projects contain 622 apartments.

Both were originally fast-tracked under the state government’s Development Facilitation Program on the proviso that 60 per cent of units would be “affordable”.

The projects bypassed local council oversight because of the 60 per cent affordable purchase mandate. This fast-tracking in 2024 allowed the Coburg towers to soar to 16 storeys – well above the 10-storey guideline for the area.

The Brunswick site was also granted an 11-storey height limit by the state last year, overriding the council’s preference for eight storeys.

Assemble’s original “rent-to-own” pathway was pitched as a unique way to get onto the property ladder for renters unable to save a deposit fast enough.

A resident would move in and pay market rent for five years. They would then be able to purchase the apartment at the end of that period, at a price locked in on day one of their lease.

If the Melbourne market went up over those five years, the resident kept all that extra value – essentially “pausing the market” so their deposit savings could catch up.

The developer now wants to scrap that model entirely for the two sites. Instead of 60 per cent of the apartments being “rent-to-own”, Assemble wants to offer 80 per cent of its units at regular market rates. It would keep just 20 per cent of the apartments as “affordable” rentals for a 10-year term.

Assemble said the shift to long-term rentals was a response to “shifts in demand and underlying conditions” and still added to the general housing supply.

A spokeswoman for the developer said the 20 per cent rental offer would still qualify for the fast-track process if submitted today. “Under the proposed alternative affordable rental offer, qualifying residents receive a 25 per cent rent discount ... for a minimum of 10 years,” she said.

Merri-bek Mayor Nat Abboud said while more housing was needed, “every effort should be made to maximise the affordable housing contribution”. A council analysis found the move would reduce the affordable housing contribution by around one-third.

For years, Assemble has positioned itself as a moral player in a ruthless market, distancing itself from mainstream developers and pitching to workers who could not rely on the “bank of mum and dad”.

Victorian Greens housing spokeswoman Gabrielle de Vietri accused the government of giving “special treatment” to private developers, “who don’t care about affordability, they only care about profit”.

“It’s not surprising they would use affordable housing as a Trojan horse to get approvals, only to gut those commitments later to make their projects more profitable,” she said.

Opposition planning and housing spokesman David Southwick said developers were using Labor’s fast-track program to secure extra height and looser planning controls, “only to walk away from affordable housing commitments later”.

“That is a failure of this government,” he said. “More than 56,000 Victorians are on the social housing waiting list. Scaling back affordable housing does nothing to fix Labor’s housing crisis.”

The move comes roughly 18 months after Assemble merged with Super Housing Partnerships, a move backed by AustralianSuper and HESTA to “scale up” social impact. The super funds hold a combined 80 per cent stake in the entity. HESTA is not an investor in the Brunswick and Coburg projects.

Assemble has been the developer of choice for the government on several projects on public land, including the Fitzroy Gasworks.

A decision on the watered-down permits is under review by the Department of Transport and Planning. The decision could be made under delegation by department planners, or escalated to Planning Minister Sonya Kilkenny personally.

Documentation for the requested amendment has not been publicly listed on the department’s ministerial planning register.

When The Age requested the documents and asked why they were missing from the public record, the department and Kilkenny’s office declined to provide them.

A spokesperson stated only that “any proposal will be considered on its merits and these revisions are currently under assessment”.

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