Photography by Rachel Thornby

Following Development Victoria’s announcement that it would expand its affordable housing program Small Sites in March earlier this year, two apartment complexes located at 127 and 147 Grattan Street have been earmarked for private housing development. 

Helmed by Jacinta Allan’s government, Small Sites is a state-level initiative focussed on “unlocking surplus government land in established suburbs” and contracting private entities  to develop medium-density housing. The Royal Women’s Hospital own the Grattan Street apartments.

The Grattan Street properties join the program alongside ten other “underutilised government-owned sites” in Melbourne. All will be sold for private housing development. 

While the other sites identified by Development Victoria encompass abandoned buildings, empty fields and unused car park space, the Grattan Street locations see active use and habitation. 

Prior to being designated as surplus land, the two properties’ 32 flats were operated by the Royal Women’s Hospital. The 16 apartments at 127 Grattan Street were rented out while the remaining half at 147 served as short-term accommodation for patients and families.

Now, patients are required to personally locate accommodation with a $45 per night allowance, making it much harder for rural patients to receive the care they need. The free accommodation service had been running for 27 years prior to  its abrupt closure. 

The flats next door at 127 Grattan Street are privately rented. Referring to the Small Sites program, Minister for Housing and Building Harriet Shing has said that “unlocking surplus government land is one of many ways we are increasing housing supply, because more young people should be able to live closer to where they grew up, and more workers deserve the opportunity of a home that’s closer to their job.” 

“I loved living there because I got to be near uni and work and the rent was extremely affordable. But now I’ve had to move further away because I can’t afford to keep living nearby,” said Samuel*, a University of Melbourne student who previously rented a flat in the Grattan Street property. 

The current tenants of 127 Grattan Street were given notice to vacate the property by March 2026, greatly disrupting the lives of some long-term residents who have otherwise been priced out of the Carlton rental market. “It is cruel to claim the site was underutilised when me and my neighbours are living here. To us, it’s definitely not underutilised,” Samuel said. 

The expanded Small Sites initiative promises to deliver 350 additional homes, with a minimum of 10 per cent required to be affordable housing. 

During a meeting with the development team, the current tenants of Grattan Street were told that Small Sites expected to double the amount of homes on the site to 70 apartments. 

“If they only have seven affordable homes on the site, then that’s an overall decrease in affordable houses in Carlton,” said Samuel.  

It raises the question of whether, amid this housing crisis, the Government is prioritising true affordable housing in the inner-city or merely seeking  to sell public assets to  the advantage of private developers. 

The Small Sites program is expected to contract a commercial builder to begin development of the properties in 2027. The other Small Sites properties are located in Preston, Coburg, Alphington, Malvern, Croydon South, Heidelberg West, Baxter, Bendigo and Herne Hill. 

*Not their real name.