Sydney will have a new inner-city suburb – known as Bays West – within a decade, giving the public access to Glebe Island’s waterfront, the home of Sydney’s last working port, for the first time in more than 100 years.
The New South Wales government on Tuesday announced that a long-awaited overhaul of the state-owned land, directly above the under-construction Bays Metro station and near the western end of the Anzac Bridge, will proceed, delivering 8,500 new homes.
Bulk port operations, including cement, gypsum and sugar handling, will cease by 2030.
It means Sydneysiders will farewell Glebe Island’s distinctive 1970s industrial silos as part of the “city-shaping” transformation, which will open up the long-underused site, stretching from Rozelle Bay to White Bay, 2km from the CBD.
Former industrial silos in other parts of the inner west, including in Newtown and Dulwich Hill, have been converted into housing, but the NSW premier, Chris Minns, told reporters the Glebe Island silos were “gross” and “need to come down”.
“We have to be realistic about Sydney’s future. [The silos] weren’t built by the Romans,” the premier said.
The planning minister, Paul Scully, said the government planned to restore the heritage-listed Glebe Island swing bridge, decommissioned in 1995, to use it “as part of the active transport links into the city”.
Scully said he expected the first homes to be completed in 2032 in time for the opening of the Metro station.
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Ten per cent, or at least 700, of the new homes would be affordable and earmarked for essential workers, while 25% of the land would be given to open space.
Affordable housing is generally defined as housing that costs less than 30% of a household’s gross income. The Minns government made a pre-2023 election commitment that 30% of all crown land sold through an internal land audit would be affordable, a target which does not apply to Glebe Island, which the government has said will remain in public hands.
Guardian Australia understands developers would be given long-term leases similar to those under the state government’s redevelopment of Barangaroo. Developers there have 99-year ground leases.
On Tuesday, Minns told reporters the 10% affordable commitment at Bays West was “not a missed opportunity”.
“The bays precinct is three-and-a-half times the size of Barangaroo,” he said. “We need to get the yield to make it special.”
Minns said the affordable housing would remain so in perpetuity. He would not say whether it would be managed by the government or external providers.
As Guardian Australia has reported, affordable housing tenants in the Watermans Residences at Barangaroo South, developed by Lendlease and owned and managed by St George Community Housing, have to use separate entrances, or so-called “poor doors”, and are not permitted to use the swimming pool or the gym.
To make way for the homes, Glebe Island’s cement, gypsum and sugar handling will close by 2030, with the state government putting $270m into transport infrastructure at Port Kembla port, south of Sydney.
Deep water port facilities, with the potential to accommodate naval ships, will be kept at White Bay, to which some Glebe Island port operations will be relocated, including the handling of salt. The White Bay cruise terminal – used for ships that can pass under the Harbour Bridge – will remain.
Paul Nicolaou, the executive director of Business Sydney and a spokesperson for the coalition of ports in the area, told the ABC that Tuesday’s announcement was “disappointing”. He said the ports supported a “hybrid model” to allow operations to continue.
“Those bulky goods are needed for Sydney, and we are concerned that if they are shifted down to Port Kembla, it’s going to increase the costs, both for the consumer and … business, and at a time when we need to build more housing,” Nicolaou said.
“Cement is an integral part of our housing situation.”
Minns said the government had been advised that the increase in construction costs caused by moving port operations was “the equivalent of about $50 for an apartment”.
Under the plans, White Bay power station will be made into a cultural and community destination, and a new staging area will be built in White Bay for New Year’s Eve fireworks, the Vivid festival and other major events.
A delivery agency will be set up in the coming weeks to oversee the rezoning, port and development processes.
The Bays Precinct Taskforce was first convened in 2007 to assess future uses of the area. The site has long been mooted as a potential location for new homes to ease the state’s housing crisis.
Under the Minns government, the precinct was in 2023 identified as an accelerated transport-oriented development (Tod), but not rezoned before a decision about the future of the working port.
Tods typically allow six or seven-storey unit blocks within a 400-metre radius of train stations, although accelerated Tods have already allowed for limits as high as 60 storeys. On Tuesday, Minns said developers at Bays West would be allowed to build “in some cases over 40 storeys”. Tods have been criticised for their top-down, broad-brush approach to development.
Minns added that “not everyone will welcome change, but cities don’t stand still”.
“If Sydney is going to remain a place young people and families can afford to live in, we have to use well-located land better and plan for the future.”
The NSW opposition, which has yet to commit to a position on the development, said on Tuesday it was concerned about “the flow on impact of shutting down one of Sydney’s busiest ports, including increased construction costs, congestion on major infrastructure and pressure on supply chains”.
Planning spokesperson Chris Rath MLC said the move appeared to be “privatisation of public land to create a playground for the wealthy”.
The government will run an international design competition to guide development across the precinct. Its own architectural renders included a large harbour swimming pool, although a government spokesperson confirmed this was “illustrative” rather than indicative of development plans.
