New activity centres raise questions over government’s approach to housing crisis

As part of the state government’s new development strategy for Victoria, there are plans to unlock more potential home sites by establishing two new activity centres in inner Melbourne. However experts are calling for the government to rethink its deregulatory approach.

The activity centres will be in the Cities of Yarra and Melbourne, with a focus on unlocking more developments around train and tram zones, upzoning strategic sites, using newly-developed planning controls, and fast-tracking specific site developments.

To achieve this, the government has announced its intention to work alongside both the City of Melbourne and the City of Yarra councils, stating that “nothing is off the table” to help establish more homes.

In the recently released Plan for Victoria, the state government has set a target of 119,500 new homes by 2051 for the City of Melbourne, which Lord Mayor Nick Reece said highlighted opportunities for additional housing in inner-city municipalities.

“We welcome the Victorian Government’s plan to build more homes close to transport, jobs, and services,” Cr Reece said.

However, RMIT University Emeritus Professor of Environment and Planning Michael Buxton believes that the activity centres will reduce the power of local councils and diminish residents’ rights.

Prof. Buxton told CBD News that the state government’s focus on changing planning controls to unlock more homes presented a “false narrative” to justify “deregulation”.

“There are better ways to do it, and councils have been doing it pretty well up until the government jumped in and threw everything away,” Prof. Buxton said.

He noted that the “fast-tracking” of developments, particularly the Development Facilitation Program (DFP), is robbing residents of their right to “objection” and “appeal”.

The program is an accelerated assessment pathway for projects that invest in the Victorian economy, support jobs, and create homes, including helping to streamline the planning process for residential developments that deliver at least 10 per cent affordable housing.

However, Prof. Buxton believes that having mandating affordable housing targets and stricter planning rules would be more effective than the deregulatory approach that has been adopted.

The planning system has become a scapegoat, according to Prof. Buxton, who said the state government had used it to justify the lack of housing in the city while failing to appropriately address other contributing factors such as the taxation system and building costs.

“The government refuses to bring in more certainty through mandatory rules,” he said. “That’s been the problem, and the government blames the planning system without identifying the problem.”

Speaking with CBD News in March, Lord Mayor Cr Nick Reece said, “We urge the Victorian Government to set a clear target for affordable housing to ensure Melbourne remains the best and fairest city.”

“The city has a shortfall of at least 6000 affordable rental homes, and if we do nothing, this will almost quadruple to more than 23,000 by 2036.”

To date, the only council land earmarked for development into affordable housing is a car park at 325-341 Victoria St, West Melbourne, with a second site in North Melbourne deferred until the impacts of the first development are assessed.

Additionally, the state government is also looking to unlock more land by developing government-owned sites, with surplus health precinct-zoned land on Grattan St in Carlton earmarked for housing development as part of this strategy.

This was recently seen in Kew, where the former VicRoads headquarters has been rezoned for residential and commercial use to deliver about 500 homes.

A structure plan for urban renewal in Arden was also approved in 2022 without any affordable housing targets, which former City of Melbourne Cr Rohan Leppert described at the time as “outrageous”. •