Consultation begins on Victoria’s draft targets: 2.5 million new homes by 2051

By Meg Lee and Sal Lennon

Premier Jacinta Allan has revealed proposed new housing targets for local councils to achieve in each municipality in Victoria by 2051. The draft targets, which will be finalised by the end of 2024, aim to address housing affordability and availability issues.

The actual mechanism for enforcing the targets remain unclear, and the Premier has declined to comment on any potential penalties. However, the final targets will likely be included in the new Plan for Victoria, set to replace Plan Melbourne, in late 2024, and will also likely be supported by planning scheme amendments.

In addition to consulting directly with councils regarding the draft targets, the government will open submissions to the general public from 1 July 2024 to 30 August 2024. View more details.

Draft targets

The draft targets include:

• 2,000,000 homes to be built in Metropolitan Melbourne by 2051.
• 500,000 additional homes to be built in regional areas, including almost 100,000 across Ballarat and Greater Bendigo.
• City of Greater Geelong assigned the largest single target of 139,800 new homes, more than doubling its current housing stock;.
• Significant targets within Metropolitan Melbourne:
  • City of Melbourne: 134,000 homes;
  • City of Boroondara: 67,000 homes;
  • City of Glen Eira: 65,000 homes;
  • City of Port Phillip: 56,000 homes;
  • City of Stonnington: 51,000 homes; and
  • City of Yarra’s target of 48,000 homes.
• Notable mentions in the outer fringe areas include Melton, Wyndham, Casey, Hume and Whittlesea City Councils, who’ve all been set draft targets of between 87,000 and 132,000 new homes.

The targets are in draft only and will serve as a guide while the government consults with local councils. The targets will be finalised in the coming months, with final targets released by the end of 2024.

At this stage, there are no indications on whether the final targets will also include requirements for the diversity of dwelling types. For example, it’s not clear whether the targets are simply for total numbers of dwellings or will include requirements about:

• minimum sizes or number of bedrooms;
• whether a proportion of new homes will need to be apartments or standalone dwellings;
• the nature of tenure; or
• whether there will be flexibility afforded to different municipalities in these respects, to reflect the varying size of targets and demands of different communities.

Further, it will be interesting to see if the targets will include specific requirements for affordable and social housing as a percentage of the target, and/or whether concessions might be granted for meeting these targets if affordable and social housing is provided.

Concerns raised by councils

In line with these uncertainties, some councils have already expressed significant concerns about the draft targets, including:

• City of Melbourne’s June 2024 meeting agenda notes its target of 134,000 dwellings represents a 121.7% increase. The proposed council motion indicates significant concerns with the proposed targets, such as the inability for the government to compel the lodgement of permit applications or compel the construction of homes, in addition to the uncertainty regarding the delivery and funding of infrastructure needed to support new homes.
• Boroondara Council’s media release states the state government’s approach to the housing crisis is ‘both disappointing and flawed’. The City of Boroondara’s proposed target of 67,000 dwellings will require a 300% increase in the number of dwellings constructed each year to meet the target by 2051.
• Mornington Peninsula Shire’s target is 31,000 homes, with its number of existing homes currently at 94,900. Interestingly, in its recent Statement from the Mayor, concerns were raised about the funding of infrastructure, including public transport upgrades, but also the requirement for additional appropriately zoned land to support residential development. Approximately 70% of the shire being Green Wedge Zone, resulting in a current limited supply of residential land.
• Bayside City Council has expressed concerns about the draft target of 31,000 additional homes, which represents a 70% increase from the current number of homes (44,100). Consequently, the council has raised concerns about the potential change to Bayside’s character and compromised liveability that could result from achieving this target.

Similar housing targets were introduced for 10 municipalities in British Colombia 18 months ago,[1] including quotas for housing tenure, affordability range and size (number of bedrooms per unit). Reports following the first year of the targets have shown Vancouver will fall short of its targets in several respects. Notably, the targets are for completion and occupancy, not just approvals.

Consultation with councils and communities

The state government will engage in close consultation with councils in the coming months. Councils will report back on the draft targets, proposed changes to the local planning schemes and the infrastructure support they deem necessary. Based on the media releases by councils so far, this consultation is likely to be contentious.

In addition to direct consultation with local councils, submissions from the public are also welcome. The submission period runs from 1 July 2024 to 30 August 2024. View more details.

Obviously, the challenge in meeting the targets is not just in the domain of the planning schemes or local councils. The increasing cost of construction and capital continue to put pressure on developers. This means a multi-pronged approach is needed by governments at all levels if we are to meet the overall targets.

[1] BC government announces legislated housing supply targets for 10 cities | Urbanized (dailyhive.com)