University of Tasmania has long eyed land sales at its 'upper' Sandy Bay campus, and parliament could soon grant its wish

Churchill Avenue winds its way through the University of Tasmania's (UTAS) Sandy Bay campus.

On one side is the main campus. On the other is the "upper" campus — an uphill sloping array of student accommodation, university buildings and bush.

The future of the upper campus has long been up in the air — and for well over a decade, UTAS has made no secret about wanting to do something about it.

It has been progressively consolidating its functions in the lower parts of the campus, with an eye to selling.

And in 2017, it sought permission to sell parts of the upper campus, triggering a lengthy legal dispute that ultimately saw it knocked back in the Supreme Court.

Then came the UTAS Sandy Bay master plan in 2021, a fully fledged attempt to relocate the university's functions to the Hobart CBD once and for all, and create a higher density housing and neighbourhood development across the entire Sandy Bay campus.

This included two "precincts" in the upper campus.

One sat behind what is now the Hill Street grocer site — the former UniPriton site — and included 930 dwellings across townhouses and apartment buildings, some proposed to be up to six storeys high at the bottom end of the hill.

And another sat closer to the student union building, involving about 300 dwellings across predominantly multi-storey apartment buildings, along with other community facilities.

Those plans may have ended with UTAS's recent commitment to scale back its CBD relocation, but the two pieces of the upper campus — or former "precincts" — are back on the agenda.

Last week, the Tasmanian government agreed to push for the two pieces of land to be rezoned as "inner residential", which would allow for higher density development, subject to Hobart City Council approval.

With Labor's support, the rezoning will pass the lower house this week and requires two of the independents in the upper house.

UTAS's long-held ambition to sell the land looks to be back on.

Why does UTAS need the money?

UTAS said it needed the money to help fund a new science, technology, engineering and mathematics (STEM) development.

Almost a decade ago, UTAS submitted a preliminary case with the Commonwealth for a STEM precinct at the former Webster's site on Melville Street, estimating it would cost $400 million, which rose to $500 million.

UTAS ultimately sought $250 million from the Commonwealth and floated a suggestion of state government funding, too.

Opponents of UTAS's relocation to the Hobart CBD have long questioned the basis of these cost estimates.

Then the Tasmanian government indicated its preference for the STEM building to be at Sandy Bay, and earlier this month, UTAS announced it would instead retrofit some buildings and build some new ones rather than pursue a CBD site.

These buildings are believed to be in the centre of the Sandy Bay campus, below the Morris Miller Library.

The $500 million cost estimate remains, but UTAS will need to reapply for Commonwealth funding and develop a new business case.

Both the state government and Labor opposition have said the funding responsibility sits with the Commonwealth.

It's unclear how much money UTAS expects to raise from the upper campus land sales, but in a 2019 business case, it floated a figure of $40 million – a figure that's likely to have increased.

UTAS has also announced it will be selling two of its CBD sites as "surplus to requirements", but will be retaining the building at 65 Argyle Street. It's unclear what that building will be used for.

Recent UTAS annual reports have detailed an increasingly challenging financial position.

Shifting politics of UTAS real estate play

The politics around UTAS land sales and CBD development has been challenging for all of the main parties.

Government minister Madeleine Ogilvie is now facing claims of a "backflip" from the government's pre-election position over requiring parliament's approval for UTAS land sales.

The Greens are opposed to the CBD relocation, although its new Clark MP Helen Burnet had previously been a supporter while on the Hobart City Council.

Labor's position had been relatively unclear until Dean Winter took on the party leadership, becoming the parliament's strongest advocate for turning the Sandy Bay campus into housing.

At the heart of it all are the staff and students, and residents of Sandy Bay, whose lives are inextricably linked with the university campus.

A 2022 elector poll showed that 74.4 per cent of City of Hobart residents opposed the UTAS CBD relocation.

On Friday, views on the street near the Sandy Bay campus were mixed.

Local resident Ruth said the area didn't have the transport options to sustain a significant increase in population, and that the housing was unlikely to be affordable.

She wanted to see the full campus retained.

"I think it's an educational facility, it always has been," Ruth said.

While international student Tama said the area needed more housing options, particularly if UTAS would be maintaining its presence.

"I think [the housing plan] is a good idea because nowadays it's hard to find a good rental property," Tama said.