Preliminary government plans for the redevelopment of public housing in Northcote. Credit:DHHS In order to help pay for the redevelopment of the eight rundown estates and to mix in private and public housing, the government will demolish them and sell the land to developers. Developers will then have to rebuild the public housing with at least a 10 per cent increase in apartments for the disadvantaged. Private apartments can then be built on the rest of the site. Plans for one estate shows the government's intention is to rebuild 36 per cent of the housing for the disadvantaged. The remainder would be occupied by private apartment developments on land now completely devoted to public housing.

One of the public-private housing developments in Carlton the government is using as a model for the redevelopment plan. Credit:Eddie Jim William Gwynne has lived at the Northcote public housing estate for three years, after a three-year wait to get in. Mr Gwynne predicted massive opposition from residents in neighbouring streets who would not want nine-level apartments, as flagged in the Office of Housing plans. "You can't build a bicycle track around here without people going berserk," he said. "The idea that people in this area are suddenly going to tolerate seven or nine storeys is just hilarious." Mr Gwynne said the idea of having to move from the area he and his family had now settled into was causing him great distress. And he had little faith he would get to return once he was evicted.

He said the Northcote units, while rundown, were a vast improvement on three years he had spent homeless before moving in. "They're only rundown because nothing has been spent on maintenance," he said. The $185 million redevelopment plan was launched last month by Housing Minister Martin Foley with the release of a briefing paper. It said tenant relocation and demolition of estates would happen after tenders were awarded to developers in mid-2018. Under the plan, a share of developer profits from private apartments would go back the government.

The eight sites to be demolished house 1100 apartments and have been selected specifically because they are "suitable for renewal and increased densification". A public housing group said the rebuild was needed because the estates were in terrible condition. But it was important enough larger family apartments were built. "Last year we introduced the [housing] minister to a family of eight living in overcrowded conditions in [Prahran]," said Raoul Wainwright from the Victorian Public Tenants Association. "We want the minister to ensure they have a place to move back to." Mr Foley has promised repeatedly that tenants would be able to return to developments once they were completed, but as they will take years to rebuild this may be difficult.

The government regards a similar demolition and rebuild of three Carlton housing estates as a public-private success story that will now be repeated elsewhere. A spokeswoman for Mr Foley said the government could not stand by and condemn another generation of public estate tenants to poverty. She said no decisions on when tenants would leave or what would be built on estates had been made. "We are currently consulting with tenants and going through the planning process – any decisions are yet to be made," she said. Yarra councillor Stephen Jolly has been a long-time campaigner for better conditions for public housing tenants.

He said the government was "spinning the truth" and that the redevelopment of estates was "the forced relocation of Indigenous and poor people from their inner-city homes so their land can be gifted to developers". Federal Greens MP Adam Bandt said Melbourne's public housing crisis was getting worse because of the Labor Party's "craven addiction to private development".