No bulldozers and towers: Defence sites dominate talk of Sydney’s housing future

The NSW government is prepared to pounce on historic defence sites being sold by the federal government, including Victoria Barracks in Sydney’s east, the planning minister has said.

Planning and Public Spaces Minister Paul Scully on Friday said the Minns government was exploring its options in response to the Albanese government’s dramatic decision this week to offload $3 billion worth of defence real estate, freeing up prime land for housing in inner-city areas.

Asked whether the NSW government would consider acquiring such sites, Scully told the Sydney Summit – hosted by the Committee for Sydney think tank and supported by the Herald – that discussions about the future of the sites were under way, particularly in relation to Victoria Barracks.

“We’ve asked [the state’s social and affordable housing agency] Homes NSW to investigate potential options for Victoria Barracks,” Scully said, referring to work being led by Housing Minister Rose Jackson.

However, Scully ruled out “aggressive” development of the 15-hectare site on Oxford Street near Moore Park, and said the government should not be “going in and bulldozing it and replacing it with huge apartment towers”.

He stressed any use of the Paddington site would have to respect its deep historical and cultural significance.

“We’ve got to be very, very mindful of the history of that place,” he said.

“It’s important to veterans, especially. Anything that is done there has to be approached sympathetically.”

Asked whether local communities would have a say on what happened to the sites, Scully said: “I think they will.

“I don’t know who might ultimately own those sites or be the proponent, but I would strongly encourage anyone involved — in the same way we’ve done with surplus government assets — to go through proper processes and consult closely with the communities they sit within,” he said.

NSW Opposition Leader Kellie Sloane, who is the Liberal MP for Vaucluse, said she had concerns about the federal government “offloading assets onto state governments without a clear plan”.

“Just saying, ‘Let’s offload this asset’ and then talk about community consultation afterwards is something, I have to say, I’m not crazy about,” Sloane told Friday’s summit.

“I think we should try to hold on to some of those incredible military heritage assets and make sure they’re not diminished by development.

“That doesn’t mean that some of the land around them couldn’t be better utilised, but it has to start, I think, first with our veterans and with the local communities about what we do with that land.”

Sloane pointed to overseas examples where other major cities had successfully retained and repurposed military sites without erasing their historical value.

“Some of that includes discreet housing that doesn’t overshadow or overwhelm the heritage,” she said.

The Sydney sites being either fully or partially divested by the federal government include HMAS Penguin in Mosman, Lancer Barracks in Parramatta and Spectacle Island on Sydney Harbour.

The sell-off of defence land has sparked concern among heritage groups and local councils, with fears that historically significant sites could be lost to development if sold to private interests.

Federal independent Wentworth MP Allegra Spender said she would like to see a mix of housing, heritage and community uses for Paddington Barracks, with a strong preference for keeping most of the site in public hands.

“It’s a public asset at the moment and I don’t want it to be used as a short-term cash cow,” she said.

Spender said that while defence leaders no longer saw the site as fit for modern military purposes, that did not justify losing it to private development.

“I’m open to social housing,” she said. “But the heritage is really, really important. The connection to the army is really important too.

“The feedback I’ve received from the government is that it’s not a strategic defence asset, but the question is: How do you retain at least a significant portion of it in public hands for public benefit? That’s the balance.”

Given the scarcity of land in her inner-city electorate, Spender said the site presented a rare opportunity to deliver multiple public outcomes.

“I’d love to see housing — mixed housing, including social and affordable housing — and other community assets,” she said.

“We should be looking at how to get the best value out of it, including the biggest public benefit.

“That’s where I really encourage the NSW government and the City of Sydney to be talking to the federal government.”

Veterans groups and heritage advocates have reacted warily to the plan, which they warned could undermine the military’s presence in the country’s biggest cities and hamper defence recruitment.

NSW Veterans Minister David Harris said it was crucial the federal government consulted with veterans and their families on the sites, which for many held “deep personal meaning and represent an enduring link to Australia’s defence history”.

“The Minns Labor government always welcomes opportunities to deliver more well-located housing and open spaces, and we will engage constructively with the Commonwealth.”

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