Victoria leads other States in setting out a comprehensive housing plan

4 min read

Victoria has taken a significant lead over other States and Territories by unveiling a comprehensive housing statement aimed at addressing the State's housing shortage.

The sweeping and ambitious plan includes new dwelling supply targets for Melbourne, accelerated deadlines for dwelling approvals and government reforms to protect private renters.

There are also important suburb-based initiatives that, if they proceed, should change Melbourne as a city. These include the re-purposing of the city’s 44 high-rise public housing towers, a new planning act, as well as a tax on short-term rentals to help fund more social housing.

The housing package, announced by Premier Daniel Andrews in late September, is set to affect Melbourne’s long-term and short-term rental providers, renters and holidaymakers as well as private homeowners in many areas of the city.

For all of these stakeholders, there could well be both positive and negative consequences flowing from the plan.

Mr Andrews says the housing statement is the most significant “shake-up” of housing policy in decades.

Over 40 pages, the statement reveals the government’s plans to speed up development approval times, rebuild the State’s ageing social housing towers and unlock land in established suburbs in an effort to build 800,000 new homes over the next decade.

Mr Andrews says the ageing public housing towers no longer meet the standards Victorians have come to expect.

“Our 44 high-rise towers are old, they are out of date, they are crumbling. They need to go,” he told reporters.

“In what is undoubtedly the biggest urban renewal project in our state’s history – and potentially our nation’s history – all 44 of those towers will go, they will be replaced by 2051.”

Mr Andrews says the Carlton, Flemington and North Melbourne towers will be the first to be redeveloped, with department staff and translators already door-knocking residents to inform them of the plans.

He says the development would see the amount of social housing across the sites increase by 10 per cent with some of the land to also be used for private apartments.

“These sites are so well located and they can be home to so many more people,” Mr Andrews notes.

The prospect of new and cutting-edge private/social housing developments on many of the prime sites presently occupied by the 44 hulking public housing towers clearly will offer a range of potential plus-factors to private property owners in inner Melbourne. It is easy to imagine the current tower areas being vastly improved, both architecturally and in terms of the amenities they offer surrounding communities.

Other key features of the Victorian Government’s housing push include:

  • Streamlined approvals for four- and five-storey apartment projects that have 10 per cent social housing.
  • Target 80,000 new homes a year for a decade.
  • A state-wide 7.5 per cent levy for Airbnb and similar style short-stay accommodation.
  • Victoria’s Planning Minister to get approval powers from local councils for certain developments.
  • No planning permits are required for single homes on lots of 300 sq. m or more.
  • No permits are needed for granny flats.
  • $500 million to assist 3000 first-home buyers via a shared equity scheme.
  • Simpler compliance standards for homes meeting size and storage requirements.
  • The appointment of 90 new planners to clear a backlog of 1400 housing permit applications.
  • Active consideration is to be given to converting 80 designated office blocks for residential conversion.
  • New planning controls for “activity centre” suburbs linked to the Suburban Rail Loop.

The plan is expected to boost the supply of private rental accommodation by 70,000 dwellings in the longer term.

There are also new initiatives designed to strengthen renter rights, including a ban on rental bidding, establishing a new rental disputes agency, and restricting rental providers’ ability to raise rents in between successive fixed-term rental agreements.

Victoria will also increase the minimum period for notices to vacate, from 60 to 90 days.

Property investors will be unable to increase rent for new renters within 12 months of issuing a notice to vacate to previous renters.

A core component of the housing statement is the 7.5 per cent levy on short-stay accommodation. This is expected to raise about $70 million annually to fund social and affordable housing when it comes into effect in 2025.

Mr Andrews has characterised the levy as "modest," but like many significant government reforms, it has elicited some criticism from the industry.

Mr Andrews has previously indicated he will take over planning controls for land up to 1.6 kilometres around each proposed station of the Suburban Rail Loop.

The new housing statement reveals that the State Government will now introduce planning controls to deliver 60,000 homes around 10 activity suburbs across Melbourne, taking planning approval power away from numerous local councils.

At Nelson Alexander, we offer comprehensive property management services catering to both permanent and short-term rentals.

We are committed to continuously updating and sharing information regarding legislative changes as they evolve with all stakeholders in the rental, residential, and commercial real estate markets.

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