Marshall Waters, one of the residents living opposite Don Kyatt warehouse in West Melbourne. Credit:Eddie Jim Melbourne City Council is working on a structure plan for West Melbourne, and a new heritage regime. In the meantime, developers are working on dozens of apartments between North Melbourne railway station and the city centre, including a 39-storey tower on Spencer Street nearing completion. But residents opposing large-scale developments are enjoying the odd small victory.

The state planning tribunal last week knocked back developer Oliver Hume's bid for around 200 apartments in an eight-level block in the heritage-listed Don Kyatt warehouse on Roden​ Street. The plan for the Don Kyatt warehouse in West Melbourne that VCAT rejected last week. Credit:Oliver Hume Victorian Civil and Administrative Tribunal member Rachel Naylor said the development was too high, did not take into account heritage or urban design, and some apartments were poorly designed. "Whilst there are particular characteristics of this site that may assist a taller development than four storeys on this site, this could be five or six storeys rather than eight storeys," she said. 14-16 Anderson Street, West Melbourne. Credit:Paul Jeffers

Marshall Waters was among residents who fought the plan, approved by Melbourne City Council officers despite scores of objections. Residents argued an eight-storey building on the Don Kyatt site would inevitably lead to even bigger buildings, he said. The building site on the corner of Dryburgh Street and Railway Place in West Melbourne. Credit:Paul Jeffers And so they put their hands into their own pockets to fight Melbourne City Council's decision, and Oliver Hume. "It was an expensive exercise to run against a developer with very deep pockets," said Mr Waters, who believes the area is generally developing appropriately at up to four levels, and that some exceptions were fine around the railway station and closer to the city's edge on King Street.

Long-term North Melbourne resident and real estate agent Gordon Bardic said house prices in the area had risen up to 70 per cent over the past five years, to an average price of about $1.2 million. "People see some value out this side; it hasn't got the same hustle and bustle as somewhere like Richmond for example, and it's still very much a community suburb," the Jellis Craig agent said. Mr Bardic said buyers weren't too worried about the rapid residential development. Nor were they deterred by the two big transport projects – the Metro Tunnel rail project, which is proceeding, and the West Gate Tunnel, which is likely to – that will create a new rail station on Arden Street but also dump an estimated 9000 extra cars a day into the area. Mr Bardic said residents needed to accept that inner-city areas get busier.

"It's part of living so close to the city that people's expectations of quiet are going to change," he said. "I moved into the area 20 years ago when it was still highly industrialised and I really enjoyed that. But now I'm seeing the gentrification going on and the changes, there's a lot of positive things going on in both of those suburbs." Melbourne City Council plans to introduce a mixture of discretionary height controls and mandatory density controls for West Melbourne, and is also looking at changing the suburb's zoning to ensure not all developments are residential. Professor Buxton said Melbourne must protect its inner-city industrial buildings. "Any great city would figure out how to reuse these buildings. You don't plunder that and turn it into some of the worst, lowest-standard medium and high-rise developments that are being built in the world," he said.

Places like New York had "kept those villages, and they are some of the highest-amenity, most diverse, interesting places on earth", Professor Buxton said. "Why would we not follow that model?" Mr Bardic said some people were always going to dislike big developments. "It's the same people who have been there for a long, long time and just didn't want to see it change. But unfortunately that's part of progress."