Build social housing for the future

Victoria is facing an unprecedented housing affordability crisis. Rental stress in Victoria has jumped by 25 per cent in just 2 years, with over 140,000 low income households now affected. Just 5.7 per cent of private rental properties are affordable for people on income support.

In this context, VCOSS believes that proposals for building new social housing should proceed as quickly as possible. Delaying or blocking the Public Housing Renewal Program will simply reduce the social housing supply, and delay future action on building more.

In commissioning and design processes, the Victorian Government should maximise the number of social housing dwellings provided, on a site by site basis. The potential return on each site is variable, and it is not appropriate to set an arbitrary target on a blanket basis across all sites.

Currently, the Victorian Government has set a 10 per cent minimum increase in social housing on each site. VCOSS believes that there is potential for more dwellings to be created on many of the sites. However, the different estates vary in their available land, appropriate density and land value that can be extracted to contribute to growth. We do not believe it is appropriate to set an arbitrary benchmark for growth, and applying it on a one-size-fits-all basis.

If greater uncertainty about the projects are introduced, this will reduce the value that can be extracted. Delaying the process, or introducing planning uncertainty, may reduce the amount of public housing that can be generated.

The land has considerable value. It is appropriate for the Victorian Government to maximise the potential social housing yield on existing sites by seeking to leverage the best possible returns on high value land, and use private contributions towards the construction of public assets. The growth should be maximised taking into account the potential for each site, the contribution extracted from development partners, and the needs of returning residents.

VCOSS also notes that the return generated from the projects depends on a number of factors, including the risk taken on by a development partner. If greater uncertainty about the projects are introduced, this will reduce the value that can be extracted. Delaying the process, or introducing planning uncertainty, may reduce the amount of public housing that can be generated.

However, given the scale of the shortfall in social housing in Victoria, it is unfeasible and unrealistic to expect these nine sites, representing less than 1.5 per cent of Victorian social housing stock, can somehow provide all growth necessary for the future. With at least 30,000 new homes required in coming years, the Victorian Government will need to look beyond estate redevelopments to provide for growth.

VCOSS welcomes the Victorian Government’s Homes for Victorians policy, which provides the most comprehensive response to Victoria’s housing needs for some time. This includes funding for a $1 billion Victorian Social Housing Growth fund, to be capitalised over coming years to fund increases in social housing. It also includes $1.1 billion in financing for an expansion in community housing. The Victorian Government has also funded acquisition of many hundreds of homes through its response to the Royal Commission on Family Violence. Building on these initiatives, the Victorian Government will be required to continue to invest in broader opportunities, including beyond existing public housing land assets, to expand social housing growth.

This includes producing social housing through private sector housing construction. VCOSS advocates adopting inclusionary zoning to mandate that a proportion of social housing in included in multi-dwelling developments. In 2016, private developers began construction of around 30,000 apartments. If only a few per cent of these were reserved for social housing, thousands of social housing dwellings could be created.

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