Council Budgets, Density Fights and a CFMEU Stoush: Melbourne's Week in City Politics

Melbourne City Council locked in a 3.8 per cent rate rise for the 2026-27 financial year at Tuesday night's meeting at Town Hall on Swanston Street, pushing the average residential rates bill past $1,400 annually for the first time. The vote was nine to four, with councillors from the inner-north progressive bloc the loudest dissenters, arguing the increase disproportionately hits renters through landlord pass-through costs at a moment when the property market is already softening across the metropolitan area.

The timing matters. The Allan government's housing density reforms — which would effectively override local planning controls to allow six-storey apartment buildings within 800 metres of any train station — are sitting before a parliamentary committee and expected to report back in September. Council's willingness to fight the state on planning has hardened noticeably since the reforms were announced in April, and several inner-city municipalities are now coordinating a joint submission. That submission, being drafted by officers from Yarra, Moreland and Port Phillip councils, is due to land with the committee before 31 July.

Fitzroy and Footscray at the Centre of the Density Debate

The practical flashpoints are emerging fast. In Fitzroy, residents along Smith Street between Johnston and Gertrude Streets have been bombarded with pre-application notices for three separate multi-storey developments since June. At a packed community meeting at the Fitzroy Town Hall Annexe last Wednesday, more than 150 people showed up — roughly double what organisers expected — and the dominant mood was suspicion rather than outright opposition. Many attendees said they accepted the need for more housing but wanted affordable units quarantined from the market-rate developments the reforms would unlock.

Footscray told a different story. The Maribyrnong City Council formally endorsed a rezoning proposal for the Droop Street corridor this week, a decision greeted with cautious support from the Western Suburbs Housing Alliance, a coalition of tenant advocacy groups that has been pushing for greater density near Footscray station since 2023. The Alliance estimates the corridor could accommodate up to 2,200 new dwellings if medium-density guidelines are applied consistently — though critics say that figure assumes infrastructure upgrades that neither the council nor VicRoads has committed to funding.

The CFMEU shadow keeps falling across all of it. Construction union officials met with representatives from the Master Builders Association of Victoria on Monday in what sources described as a tense session over enterprise agreement negotiations covering residential projects valued under $50 million — exactly the scale of development the density reforms are designed to encourage. The union is pushing for a 19 per cent wage increase over three years on those smaller sites; the MBA's opening position sits at 12 per cent. The gap matters because labour costs on medium-density residential projects already represent around 35 per cent of total build costs, according to the Housing Industry Association's June 2026 cost report, and developers say any settlement above 15 per cent will push feasibility numbers on many inner-ring projects into negative territory.

What Council Watchers Are Looking For Next

The next pressure point arrives on 15 July, when the Melbourne Planning Tribunal is scheduled to hear objections to a 72-unit build-to-rent project proposed for Racecourse Road in Flemington. The project has the backing of the state government's Homes Victoria agency as a pilot for its affordable housing target framework, but two neighbouring owners and the Moonee Valley City Council have filed separate objections on heritage and traffic grounds. The tribunal's decision — expected within six weeks of the hearing — will be read closely by developers watching whether the new density settings have real teeth or can be relitigated suburb by suburb.

Ratepayers wanting to track their own council's budget decisions can find all Victorian council annual plans on the Victorian Auditor-General's local government portal, which updated its 2026-27 figures on 1 July. For residents inside the City of Melbourne boundary, written submissions on the rates resolution remain open until 18 July through the council's Have Your Say platform at council.melbourne.vic.gov.au.