Victoria is undergoing significant changes in its housing policy, aiming to improve access for millennials and younger buyers. Over the past two years, the state government has introduced a series of reforms that have surprised even housing advocates. According to Brendan Coates, director of the Grattan Institute’s housing and economic security program, “We’ve seen, in many respects, a planning policy revolution in Victoria.” The reforms have shifted the long-standing dominance of “NIMBYs” (Not In My Backyard) – residents resisting new developments in their neighborhoods – to the emergence of the “YIMBY” (Yes In My Backyard) movement.
The YIMBY Melbourne group was formed in February 2023, born from a desire for affordable housing among like-minded individuals. Coates serves on its board, and Jonathan O’Brien, the group’s lead organiser, noted that they initially envisioned a grassroots effort focused on local developments. Instead, the state government has been responsive to their advocacy, enabling them to influence broader systemic changes. “We were able to make a lot more meaningful systemic change in two years than any other reform group,” O’Brien said.
Key Reforms and Their Impact
One of YIMBY Melbourne’s significant contributions came in April 2024 when they released a report advocating for enforceable housing targets for local government areas (LGAs) and proposed rezoning amenity-rich suburbs. Following this, the government announced its own targets for LGAs, marking a collaborative approach to addressing housing shortages. In a further push, Premier Jacinta Allan and Planning Minister Sonya Kilkenny declared plans to rezone land around 50 train and tram stations, eliciting mixed reactions from local residents.
The reforms have included establishing a fast-tracked townhouse code, simplifying subdivision processes for homeowners, eliminating car-parking requirements for new developments, and revamping the state’s infrastructure contribution scheme to ensure developers finance essential services. In a landmark move, the parliament approved the most extensive overhaul of the Planning Act in decades, reducing approval times to as little as ten days and limiting appeal rights primarily to neighbouring residents.
According to Coates, Victoria’s reforms are more ambitious than those implemented in New South Wales during the same timeframe. A recent Grattan Institute report estimated that changes to the townhouse code and the introduction of 60 activity zones could increase Melbourne’s housing capacity by approximately 1 million homes, equating to 70% of the city’s existing housing stock. In comparison, reforms in New South Wales might yield around 930,000 new homes in Sydney, which represents 40% of its current housing stock.
Challenges and Concerns
Despite these advancements, there is significant opposition from some quarters. Protests have occurred in affluent suburbs such as Brighton, where plans allow for the construction of apartments up to 12 storeys high. In Elsternwick, a rally against proposed housing towers was disrupted by YIMBY supporters advocating for increased housing options.
Kat Smith, a senior policy officer at the Planning Institute Australia (PIA), acknowledges the government’s innovative approaches but expresses concerns over limited engagement with professionals in the planning sector. “From a planning perspective, [the changes] do not form a coherent or integrated reform agenda,” Smith stated. She highlighted that while some individual reforms have merit, the overall strategy lacks clarity on how various changes will collectively enhance housing availability.
The PIA has raised alarms about the blanket rezoning of land around transport hubs, arguing that local context should play a vital role in planning decisions. Additionally, the new townhouse code may impede councils from evaluating environmental hazards and essential services when processing planning applications. Smith emphasized the need for homes that align with the future needs of Victorians, rather than simply increasing the quantity of housing.
The economic landscape complicates these reforms further. Coates warned that Melbourne’s housing market may be experiencing a paradox of success. As housing stock increases, prices have decreased relative to other capital cities, making it challenging for developers to justify new projects financially. Rising construction costs have compounded this issue, driven in part by the Victorian government’s infrastructure initiatives, which have intensified competition for building materials and labour.
A recent Procore/Property Council sentiment survey revealed that confidence in Victoria’s property sector is the lowest in Australia, significantly below the national average. Many industry respondents attributed their concerns to the state’s tax policies, including an additional 8% stamp duty imposed on foreign buyers, which could hinder international investment in new developments.
Looking Ahead
Both Coates and O’Brien stress the urgency of addressing heritage protection as a key reform area. Approximately 29% of residential land within 10 km of Melbourne’s central business district is subject to heritage overlays, restricting the potential for redevelopment. O’Brien noted that many of these areas consist of deteriorating homes that could be better utilized for housing.
As Victoria continues to navigate its housing revolution, the balance between development and community interests remains a pivotal concern. The outcomes of these reforms will likely shape the future of housing accessibility in the state for years to come.
