An artist's impression of the Nightingale. The project is an attempt by a group of Melbourne architects and ethical investors to create a more sustainable and affordable model for building apartments. Hundreds of applicants registered to buy one of the 20 apartments when they went on the market this year. Each property has a condition on its title that buyers cannot resell for two decades for more than a price rise in line with the suburb's median value increases. But apartment buyers this week had their deposits refunded after the VCAT ruling.

Breathe Architecture's Jeremy McLeod at The Commons, the first green apartment building in Brunswick that he and others developed without car parking. It overlooks the site for Nightingale – a similar project that Moreland Council approved, and that VCAT has now rejected. Photo: Sunny Nyssen Credit:Sunny Nyssen The project's architect, Jeremy McLeod from Breathe Architecture – which also designed and oversaw Brunswick's award-winning Commons apartments, which is over the road and similarly has no car parking – said each buyer was saving $30,000 per dwelling by not having parking. "Why should someone who doesn't have a car have to pay for a basement car park?" asked McLeod. Because, according to VCAT, there is nothing as convenient as owning an automobile. "No such arrangements … are as convenient as private car ownership", VCAT senior member Russell Byard wrote in his judgment, handed down last week.

And because Victorian planning laws require each one or two-bed apartment to have one space allocated to it – although councils can waive this requirement, as Moreland had for Nightingale. Local Labor MP Jane Garrett said encouraging walking, riding and catching public transport was necessary but so were parking options so streets didn't become choked with cars. But Greens leader Greg Barber, a Brunswick resident, said the rules on parking were "crazy". "Forcing people in public transport-rich areas to buy a car space with their apartment whether they want it or not is nuts," he said. If a developer could sell a project without car parking spaces, they should be able to do so, he said, "as long as the council never gives those residents a permit to park on the street".

Bureau of Statistics figures show one in five households in Brunswick do not own a car. Respected Melbourne planner Roz Hansen in recent months has been the lead advisor on the Andrews government's review of its key planning blueprint, Plan Melbourne. She said the VCAT judgement was disappointing. "If you look at the strategic attributes of this site they include a bus [nearby], a tram [nearby], a railway station within one minute's walk, the Upfield bicycle path, and the fact that this land is in one of the major activity centres in metropolitan Melbourne." She said the "very conservative" ruling defied common sense that this was a suitable place for a car-free development. "VCAT hasn't really understood that there are different segments in the housing market who are not the mainstream conventional purchasers – there are people who will trade off good proximity to transport and services and jobs over owning a private vehicle."

Town planning consultant Paul Little represented the property owner and developer that challenged Moreland Council's approval of Nightingale. He said waiving some of the parking requirements would have been reasonable. "But it's not appropriate to reduce it to zero," he said. Among the buyers to have had their deposit returned this week was university researcher Grace McQuilten, who rents a Carlton apartment. She doesn't have or want a car: she wants to be near a train station and Melbourne's central business district. She said the group of buyers, who have met on a number of occasions, were "committed to staying with the project" despite the uncertainty from VCAT's ruling.