Inclusionary housing

Inclusionary housing to increase the supply of social and affordable housing

Inclusionary Housing pilot program

$1 million

over three years - new initiative since 2016-17 Budget Update

We need to be smarter with the land we have available.

To make the best of what we have, the Government will undertake an Inclusionary Housing pilot on surplus government land, delivering up to 100 new social housing homes across six sites. It's a new and innovative way to think about housing.

Surplus government land is often located in areas with good access to jobs and transport. But as this land is no longer required for government needs, it can be put to market for housing.

To make sure Victorians in need aren't being left behind, the Government expects a proportion of social housing to be delivered on each pilot site.

Facilitated through the Fast Track Government Land Service, the focus will be on delivering planning certainty including rezoning and development potential, and establishing partnerships with private sector developers to deliver new social housing.

Proposals will be evaluated to make sure they deliver best value for money, and the best options for social housing.

Sites most likely to be appropriate will be vacant government land in areas where people want to live.

Each site will have planning controls prepared and a panel process undertaken to consider the appropriate rezoning. This will include considering whether any part of the site should be retained for open space – either purchased by local council or delivered through open space contributions.

The first sites are expected to be put to market by the end of 2017 with a view to construction commencing before the end of 2018. A further pipeline of projects will be identified by Land Use Victoria, Development Victoria and VicTrack.

Fact sheet - Inclusionary housing pilot on government land Fact sheet - Inclusionary housing pilot on government landDOC (1.48 MB)

Inclusionary housing in major developments

$7 million

over four years - new initiative since 2016-17 Budget Update

The responsibility for making sure we have more affordable homes should also belong to developers.

It’s why there is a growing appetite from local councils to apply affordable housing provisions as part of both rezoning, and permit applications for major developments.

Already a number of developers are offering packages that include the delivery of affordable housing, in exchange for rezoning approval or a permit uplift condition through a value capture style agreement. The partnership could take one of a number of forms:

  • transfer of ownership of an agreed number of dwellings to a Community Housing Association or the Director of Housing for use as social housing
  • the sale of dwellings to a Community Housing Association at an agreed discounted price to be used in perpetuity as affordable rental
  • offering units for sale to first home buyers through a shared equity scheme.

A clear framework will be developed to give developers, the community and local councils certainty around how a voluntary benefits scheme could be applied.

To provide a clear framework for these voluntary arrangements, the following will occur:

  • a legal definition of social and affordable housing will be put into legislation
  • the Victorian Planning Provisions and State Planning Provision Framework will be amended to provide clear direction
  • a new voluntary tool will be developed to enable affordable housing agreements
  •  new value capture tool will be developed to set out how these arrangements can be structured.

This will enable councils to set up voluntary arrangements with developers and land owners to provide affordable housing in exchange for rezoning.

A total of $4.7 million has been allocated to implement these reforms.

Fast tracking social housing redevelopments

Too many people in need of social housing are being left too long on waiting lists. It simply isn’t good enough that those waiting times are made worse because of planning delays.

To ensure project costs are minimised and delays for public housing projects are avoided, $500,000 has been allocated to improve the approvals process.

The redevelopment of public housing estates will be the first implementation priority for streamlined planning approvals. This will be facilitated by consideration of social housing redevelopments through an advisory committee process.

This new approach will ensure that good design, public consultation and consistent decision making result in timely delivery of social housing projects.

Underutilised government land

Underutilised and surplus government land will be identified with a further $1.9 million allocated to the new Land Use Victoria.

Using the Fast Track Government Land Service, these funds will ensure changes to the planning provisions for government land are streamlined.

Under this process, the independent Government Land Standing Advisory Committee examines proposals that are referred to it by the Minister for Planning, and calls for public and local council submissions on the future potential of each site.

The advisory committee then provides recommendations to the Minister, including advice on future zoning, consistent with Plan Melbourne’s objectives.

To date, this fast track process has been successful in freeing up land supply and cutting months off the traditional planning scheme amendment process. With this extra investment, a future pipeline of potential sites for the Inclusionary Housing pilot will be generated, ensuring Victorians are getting the most from publicly owned land assets.

Find out more information at Housing Strategy Planning Initiatives


For more information, email