Victorian Government’s Housing Statement – Key changes and what we know so far

Eliza Minney & Edward Mahony
20 September 2023

After months of speculation, the State Government has released the “Victoria’s Housing Statement” (VHS) seeking to introduce new policies and processes to boost housing supply and housing affordability across Victoria.  

The materials released, on our review, are at a high level however the key points we have distilled from the VHS are as follows: 

1. Introduction of a ‘dedicated team’ to work with local Councils and Referral agencies to expedite decision making at local government level.
2. Expanding the Development Facilitation Program (DFP), making the Minister of Planning the decision maker for ‘significant residential developments’ that have construction costs over $50 million in Melbourne and $15 million in Regional Victoria and include 10% affordable housing.
3. Introduction of new planning controls for ‘an initial’ 10 activity centres across Melbourne, including Broadmeadows, Camberwell Junction, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston, and Ringwood. 
4. Expanding permit exemptions, expanding the eligibility criteria for ‘VicSmart’ applications and  refining the Victorian Apartment Design Standards.
5. Expanding the jurisdiction of VCAT to dismiss a matter which has no prospects of success and imposing time limit on submissions being made.  
6. Updating Plan Melbourne to cover the whole state with a target of 70% of new homes to be constructed in established areas. 
7. Rezoning of ‘under-used and surplus government land’ with a target of at least 10 per cent affordable housing on these sites. 
8. Introducing a Short Stay accommodation levy of 7.5% with the payment being funneled to Homes Victoria (25% of funds invested in regional Victoria).
9. Expanding the ambit of:
   1. Big Housing Build, 
   2. Regional Housing Fund, 
   3. Regional Worker Accommodation Fund, 
   4. Social Housing Accelerator, and 
   5. Affordable Housing Investment Partnership.
10. Redeveloping Melbourne’s high-rise public housing towers by 2050, starting at Flemington, North Melbourne and Carlton
11. Buying off-the-plan apartments from Developers to assist with funding of construction. 

As the first step in implementing these reforms, the Government gazetted VC242 on 20 September 2023 (Amendment). The Amendment introduces two new clauses into all planning schemes in Victoria (as well as updates to the Neighbourhood Residential Zone, General Residential Zone and Residential Growth Zone). The intent of these provisions is to (1) facilitate developments that provide a significant level of housing, which may include affordable housing, or (2) make a significant contribution to Victoria’s economy and provide substantial public benefit, including new jobs. 

 In summary, the two new clauses are:

1. 1. Clause 53.22 (Significant Economic Development) which sets out three categories of non-residential use applications which may be considered as meeting the above objectives. Broadly:
      1. Category 1 seeks to deliver development which contemplates uses set out in the clause (which have a corresponding minimum construction amount);
      2. Category 2 relates to developments or uses which are carried out on behalf of or jointly with State government or public authorities, funded or partly funded by the State government or public authorities or carried out on Crown land; and 
      3. Category 3 relates to uses or developments the responsible authority (being the Minister for Planning) considers to be of significance. 

1. 1. 1. Clause 53.23 (Significant Residential Development with Affordable Housing) which sets out three categories of residential use applications, noting that this clause prevails over any inconsistent provisions in the scheme and also has the potential to vary mandatory height, setback and garden area controls. The categories in this control are broken down into:

1. 1. 1. 1. Category 1, which concerns developments with a minimum development cost ($50 million in metropolitan Melbourne or $15 million if not in metropolitan Melbourne) and provides at least 10% of the total number of dwellings as affordable housing; 
         2. Category 2 is development which is partly funded by a Public Authority or carried out by/in conjunction with the State and provides at least 10% affordable housing and 
         3. Category 3 is a development the Minister for Planning has deemed in writing to be significant, with some set criteria.

Importantly, the Amendment seeks to vary clause 73.01, so that the Minister is the responsible authority for an application under clauses 53.22 and 53.23 and can exempt the application requirements which would otherwise apply. Applications under clauses 53.22 and 53.23 will still be subject to notice requirements including notice to the relevant municipal council however, they will be exempt from third party review right under sections 64 and 82 of the Planning and Environment Act 1987. 

VC242 does not afford transitional provisions to current applications. 

We expect further detail to emerge in the coming days, weeks and potentially months as to how these changes will be implemented, the process and bodies set up and more importantly how it will affect your current and anticipated planning applications. We understand that the Planning and Environment Act 1987 (Vic) will need to be rewritten to facilitate the delivery of the Housing Statement.

As that information comes to light, we will continue to provide updates to our clients and referral networks. 

As an observation, we note that the Development Facilitation established during the COVID-19 pandemic sought to fast track approvals for developments with set criteria and in some instances, round table hearings with limited terms of reference, submissions and evidence occurred. The swiftness of these hearings was of benefit to the industry and helped fast track approvals during this period. 

Given the indication that a new body will seek to hear permit applications within 4 months of lodgement, we would expect that a similar process may be implemented. This doesn’t mean that permits will be “rubber stamped” and instead will mean consultation, strategy and regard to the relevant planning considerations and design standards need to be clear, considered and determined at the outset of an application to ensure the project has the best chance of approval in that short period. 

Best Hooper is Victoria’s Property, Planning and Land Development Advisory Law Firm and we will remain at the front foot with all announcements made by the State Government as it attempts to deliver this wholesale change to our planning system. Please contact our office on (03) 9670 8951 should you have any specific questions on the announcement and what it means for your current or anticipated application.