Housing demand in Victoria

A decade of rapid population growth has strained Victoria’s infrastructure, creating congestion and shortfalls as the state has struggled to keep up. When the coronavirus pandemic related population growth pause ends, where new housing is located will impact infrastructure provision to support growth.

Plan Melbourne, and its preceding metropolitan strategies, aim to build more homes in places with good infrastructure and amenity. Yet only a quarter of new homes are built in identified activity centres, the exact places with good access to jobs, services and public transport.

Victoria needs around 1,700 new social housing homes each year to keep pace with population growth and as many as 8,300 new social housing homes each year to provide homes to everyone who can’t afford private rentals.

Now more than ever, our state requires more homes for people who are homeless or at risk of becoming homeless. Homelessness in Victoria increased by more than 40% between 2006 and 2016. Rental stress in low income households has grown by nearly 60%. Only 5.6% of new Victorian rentals are affordable to someone receiving Centrelink benefits.

The Victorian Government made a significant commitment to social housing in the 2020-21 State Budget as part of its Big Housing Build program. It has also committed to developing a 10-year strategy for social and affordable housing and introducing reforms to deliver the strategy.

Building more homes in established suburbs can have many benefits, which include:

  • Providing infrastructure to support new homes in established suburbs is cheaper compared to building homes in new growth suburbs because supporting infrastructure, such as public transport, schools, medical clinics and shops, already exist.
  • Reduced reliance on cars by enabling more walking and cycling and building homes near public transport and employment hubs.
  • Greater opportunities to connect people to new jobs by building new homes in areas with more diverse employment choices.

Social housing meets a basic need of low-income Victorians for secure, affordable and appropriate housing. Currently, few private rental properties are affordable to people on low incomes, with a shortage in Melbourne of over 50,000 affordable private rental houses for people in the bottom 20% of incomes. Victoria’s investment in social housing is currently below the national average. (3.3 versus 4.5 social housing homes for every 100 households). The recent Victorian budget package of $5.3 billion is a great start, however sustained investment beyond this four-year package is required to fully address the need.

This means that some of our most vulnerable community members are on social housing waiting lists and are experiencing financial stress.

What are our draft recommendations?

We recommend that government identify more priority places in established areas for increased housing to better use existing infrastructure and support thriving, urban communities.

We recommend that government partner with local government to develop or amend existing structure plans and planning schemes in priority established areas to support greater density and make better use of existing infrastructure.

We recommend that government act to incentivise both private and social housing growth in priority established areas to provide good access to services, jobs and other deliver other benefits.

We recommend the government invest in renewing and building social housing for Victoria’s most vulnerable community members. This will ensure there are homes provided for the Victorians who need them the most.

We also recommend that government change and apply planning rules to deliver very low income housing through inclusionary zoning. In Melbourne, the most urgent housing affordability problem is for people on very low incomes renting private properties.

Our draft strategy update includes the following recommendations:

Draft recommendation 35. Support more homes in priority established places (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF)

The Victorian Government should partner with relevant local governments to develop or update structure plans for these priority areas and support amendments of planning schemes. In addition, the Victorian Government should also develop clear criteria to identify priority places for where the state leads integrated land use and infrastructure planning.

Draft recommendation 36. Deliver very low income housing with inclusionary zoning (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF)

The Victorian Government should use inclusionary zoning to generate ‘very low income’ affordable rental housing in Victoria. Inclusionary zoning uses planning rules to either mandate or create incentives for residential developments to include a proportion of affordable housing dwellings.

Draft recommendation 57. Rapidly renew old public housing (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF)

The Victorian Government should rapidly renew dilapidated public housing properties, with a priority to renew at least half of all older low-rise apartments and older three-bedroom detached dwellings by 2031.

Draft recommendation 73. Set targets to grow social housing (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF)

The Victorian Government should set a target for 4.5 social housing dwellings for every 100 households by 2031.

Other relevant recommendations in the strategy

Read Section 2.2 of the strategy (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF) to check out other recommendations related to ‘Create thriving urban places’

Read Section 2.4 of the draft strategy (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF) to read about other recommendations related to 'Adapt infrastructure for modern needs' and Section 3.3 (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF) for recommendations related to 'Align social infrastructure with better service delivery.

Have your say by completing the short survey below

Collection notice

Infrastructure Victoria (IV) is committed to protecting personal information provided by you in accordance with the principles of the Victorian privacy laws.

IV will use the information collected to inform Victoria’s Draft 30-Year Infrastructure Strategy (Victoria's Draft 30-Year Infrastructure Strategy 28.9 MB, PDF).

Your contact details, where provided, may also be used by IV to update you on the results of the engagement process.

If you do not wish to provide your personal information, then we will not be able to identify your submission if you wish to access it, make a correction or require technical support.

You may contact us to request access to your personal information, or for other concerns regarding the privacy of your personal information at enquiries@infrastructurevictoria.com.au