The four-storey complex would retain public parking at ground level and a level of tenant parking and feature 30 one-bedroom and two-bedroom units.
At the December council meeting several councillors said they had already started to receive negative feedback from surrounding businesses and residents about the proposal.
Cr Seema Abdullah moved a motion to provide in-principal support for the project, advertise an intention to dispose of the airspace and authorise chief executive Peter Harriott to negotiate a memorandum of understanding with social housing providers Wintringham and BeyondHousing.
Cr Abdullah said the city had a long waiting list for social housing and a real problem with homelessness.
“It is difficult to say no to this project given the homelessness we have in greater Shepparton,” she said.
“We can not miss an opportunity like this to address the situation.”
Cr Abdullah was backed up by Cr Geoff Dobson, who declared the site was ideal.
“I understand, I recognise and appreciate the number of people that think it is the wrong position; me, I think it is ideal,” he said.
Cr Dobson said car parks near the council offices were on Crown land and were not available to develop in the same way.
“Affordable and social housing shortage is a significant problem in our community,” he said.
Cr Dobson said ratepayers opposing the project were concerned the council would lose control of the outcome, but he said the MoU would guarantee the council had a final say before development approvals or construction.
Three councillors voted against moving forward with the proposal.
Cr Shane Sali said the clustering on one site was contrary to his view that social housing should be spotted throughout residential areas where residents could build links in the community.
Cr Anthony Brophy said the proposal was rushed, lacked detail and set a dangerous precedent for selling off airspace.
“I think we need it but perhaps not at this particular location,” he said.
Cr Rob Priestly also spoke against the motion, suggesting advertising an intent to sell the airspace was not the appropriate way to commence consultation with surrounding landholders.
Cr Fern Summer said the motion did not lock the council into a decision.
“It is just going out for consultation,” she said.
“Already we are seeing a groundswell of negativity from people who don’t want social housing in their backyard; this is disappointing.”
Cr Sam Spinks also supported the proposal which she said was urgently needed because of housing affordability, a rental squeeze and long waiting lists for social housing.
“This is a disaster already happening and the reality is we have all the strategies and the plans; today is an opportunity to do something about it,” she said.
The motion was passed 5-3 with Crs Sali, Priestly and Brophy voting against.
Mayor Kim O’Keeffe ended the debate urging opponents not to refer to social housing tenants as “those people” which she said was demeaning and offensive.
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