More than 700 submissions opposing the sale and development were received when it was put out for public consultation.
Shepparton ACE Secondary College, which abuts the car park, has also fought against the proposal.
Cr Seema Abdullah moved a motion at the Tuesday, June 21 council meeting to approve the sale of the airspace for $1 to Wintringham and BeyondHousing.
Six councillors participated in the debate, with Cr Greg James declaring a conflict.
Cr Abdullah said she had listened to all the submissions and read all the data and urged support for the proposal.
“I also realise that the right decision might not be the most popular,” she said.
“I invite everyone to walk in the shoes of those experiencing homelessness and hear their voice on this proposal.”
Cr Sam Spinks seconded the motion, adding there were no “deal breakers” that emerged during the consultation period and the design had been modified to address concerns.
“The proponents want to make this work and get the design right,” she said.
Cr Spinks said the site was not only the right location but the best one.
Cr Anthony Brophy opposed the motion.
“This should have been about the sale of airspace over a public car park, full stop, but it is far more than that,” he said.
“We need these sorts of projects, but we need them to be successful.”
Cr Brophy said the clustering was not supported by a range of people in the field he had spoken to, but he also had a shot at some opponents of the development.
“To those who have intimidated our council officers, have a good hard look at yourself, it is not on,” he said.
Cr Geoff Dobson didn’t support the motion but said it wasn’t done lightly.
“Sleepless nights is an understatement,” he said.
Cr Dobson choked up as he started to speak about the work done by council staff and couldn’t continue.
“I’m sorry, it is very emotional,” he said turning to the public gallery.
He later resumed speaking, saying while reports supported the project, the community was against it.
He called for a philanthropic community group to be formed to identify land for social housing development.
Cr Fern Summer said the stigma generated by the proposal was a concerning part of the public process and she urged greater compassion in the future, but she couldn’t support the sale, describing it as the hardest decision of her council service.
Cr Shane Sali also opposed the sale, but he also wanted to acknowledge that the process had been stressful and brutal at times for staff and councillors.
Councillors voted 4-2 to reject the sale of the airspace.
Councillors did support the sale of land on Parkside Dve, Shepparton, to Women’s Housing Ltd for a 45-dwelling social housing project supporting vulnerable women and children.
“I have found this to be a very challenging decision,” Cr Spinks said.
Cr Spinks said there was a clear need but an existing community on the Parkside Estate that had been “traumatised” and abandoned over its history.
Cr Spinks said there was fear in the community that history was repeating, and she tied the completion of the Parkside redevelopment to the social housing outcome.
“That estate needs to be finished, their lighting and single point of entry needs to be addressed and they need playgrounds and green space, they deserve what they signed up for.”
Cr Summer spoke against the motion based solely on its location in an area that was still recovering from poor social housing decisions made decades ago.
Cr Sali also disagreed with the clustering and location.
“Repeating history scares me a little bit,” he said.
The motion passed 5 votes to 2.
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