The Weekly understands an application has been lodged with Maribyrnong Council to build 360 units on the corner of Wests and Raleigh roads in multi-storey buildings.

It's the second time the site has been the subject of a controversial development application.

The council in early 2009 rejected an application by the Australian Affordable Housing Association (AAHA) for 271 apartments in three towers of up to eight storeys.

The Victorian Civil and Administrative Tribunal upheld the decision in March 2010 following an appeal by AAHA.

Both times the application was rejected because it had only a third of the minimum car parks required.

The site is across the road from the old Maribyrnong Defence site, which will be turned into a 3000-home development from 2014.

Highpoint shopping centre is also undergoing a $300million development that will expand it by 30,000 square metres to 156,000 square metres. Work started last year and is expected to be completed by mid-2013.

The area is already congested. A recent transport study showed 88percent of trips are made by car compared to 59percent for the rest of the municipality.

River ward's Cr Dina Lynch said roads were already close to maximum capacity and could not cope with further high-density development.

"The reason why high-density does not work across the road [in the Waterford Green estate] is because there's no transport to back it up.

"You've got a predominantly low-density area and you're going to put 18-storey buildings on a site that is pretty much closed off by two main roads. I don't see it as very sustainable." Cr Lynch said while there was a tram route nearby, trams were inadequate for most people's needs.