In a significant shift in housing policy, the state of Victoria has implemented a series of reforms aimed at increasing home ownership among millennials. Over the past two years, these changes have surprised even advocates, marking what some are calling a planning policy revolution. Brendan Coates, director of the Grattan Institute’s housing and economic security program, stated, “I don’t think anyone in their wildest dreams would have expected that a state government would go as far as they have.”
Historically, the housing landscape in Victoria has been shaped by “nimbys” (not in my back yard), who opposed new developments in their neighborhoods. However, the emergence of the “yimby” (yes in my back yard) movement has shifted this narrative. Formed in February 2023, Yimby Melbourne arose from a collective frustration over the shortage of affordable housing. O’Brien, the group’s lead organiser, noted that their initial aim was to operate as a grassroots movement focused on individual local council developments.
Systemic Changes and Government Support
O’Brien remarked on the unexpected support from the state government, which has been willing to engage with evidence-based proposals. He emphasized that significant systemic change has occurred in a relatively short time. The group’s first major initiative, a report advocating for enforceable housing targets for local government areas (LGAs), was released in April 2024. Just two months later, the government announced its own LGA targets.
More reforms followed, including the rezoning of land around 50 train and tram stations, which has caused some controversy among residents. The state government has introduced a fast-tracked townhouse code, simplified subdivision processes, eliminated car-parking requirements for new constructions, and revamped the infrastructure contribution scheme, ensuring developers cover costs for schools and parks.
In a notable move, the Victorian parliament recently approved the most comprehensive overhaul of the Planning Act in decades, reducing approval times to as little as 10 days and restricting appeal rights primarily to neighboring properties. Coates pointed out that the reforms in Victoria are far more ambitious compared to those in New South Wales, where housing capacity increases are projected to be significantly lower.
Challenges and Community Response
Despite these reforms, not all stakeholders are convinced of their efficacy. Protests have emerged in affluent suburbs such as Brighton, where new regulations permit buildings of up to 12 storeys. In nearby Elsternwick, a rally opposing proposed housing towers was interrupted by YIMBY supporters advocating for inclusive development.
Kat Smith, a senior policy officer at the Planning Institute Australia, expressed concerns about the limited engagement with planning professionals who will implement these changes. She highlighted that the reforms lack a coherent agenda and that blanket rezoning does not consider local contexts. Smith cautioned that such changes could overlook essential factors like environmental hazards and public transport access.
Coates acknowledged that while the reforms have increased housing stock, Melbourne’s market is facing challenges. The city has become less expensive compared to other capitals, complicating the financial viability of new developments. Rising construction costs, exacerbated by the government’s own infrastructure projects, further complicate matters. Coates stated, “If the Victorian government had done what it’s done this term in its last term, an enormous amount of that extra capacity would have been profitable to build.”
Recent sentiment surveys indicate that confidence within Victoria’s property sector is the lowest in the nation, with respondents citing tax settings as a significant concern. The additional duty imposed on foreign purchasers has been described as a barrier to attracting investment, which is essential for stimulating new builds.
Both Coates and O’Brien agree that reforms related to heritage protection are urgent. Currently, 29% of residential land within 10 km of the central business district is subject to heritage overlays, which can restrict redevelopment opportunities. O’Brien pointed out that many of these properties are outdated and could be better utilized to meet current housing needs.
As Melbourne navigates this transformative period, the balance between development and community interests remains a crucial topic. The success of these reforms will hinge on the government’s ability to address the concerns of both YIMBY advocates and community members who fear the impact of rapid change.
