Inclusionary Zoning Tops the Affordable Housing Agenda


The landscape of affordable and social housing is changing rapidly in Australia.

In Victoria, the Big Housing Build is injecting substantial funds into social and affordable housing and creating new partnerships and mechanisms for housing delivery.

The Victorian government is also beginning work on a 10-year social and affordable housing strategy.

These initiatives are likely to trigger a focus on long-term, consistent policy for affordable housing and new relationships between the private sector, government, not-for-profit housing providers and low-income residents.

One topic likely to top agendas is inclusionary zoning.

This is a planning intervention that mandates or incentivises the delivery of affordable housing as part of a planning approval process.

Inclusionary zoning applies a consistent or predictable approach to calculating contributions.

If applied transparently and for a long enough time, it can level the playing field for developers and allow land purchase decisions to reflect affordable housing expectations.

Inclusionary zoning is increasingly common in Australia and internationally—in South Australia, government regulation calls for 15 per cent of housing in all significant developments to be affordable.

In Vancouver, rezonings and development that exceeds maximum density limits must make a community amenity contribution.

In the 10 years to 2019 these contributions generated 2500 social housing units and 2500 units of affordable rental housing in metropolitan Vancouver, a city of 675,000 people.

▲ Inclusionary zoning has been debated in Victoria for decades but is yet to be implemented.
▲ Inclusionary zoning has been debated in Victoria for decades but is yet to be implemented.

Affordable housing agreements in Victoria

Inclusionary zoning has been debated in Victoria for decades but is yet to be implemented.

The state took a step in that direction in 2018 when the Victorian government amended the Planning and Environment Act to support the voluntary negotiation of affordable housing contributions.

Places such as East Village in Glen Eira and Altona North in Hobsons Bay now have agreements in place to secure up to 5 per cent affordable housing on site.

Women’s Housing Limited bought seven units for low-income women at a discounted rate in Box Hill through a negotiated agreement.

Despite this, uptake is limited. The City of Melbourne recently reported that voluntary affordable housing arrangements and uplift mechanisms were yet to deliver any affordable or social housing in the Melbourne LGA.

Part of the problem lies with the ambiguous, labour-intensive and seemingly arbitrary nature of current affordable housing negotiations.

A University of Melbourne research team has found that many councils feel negotiated agreements are unenforceable while developers report there is little incentive to justify them engaging in affordable housing delivery.

The authors are currently researching affordable housing agreements in Victoria and want to hear from the industry. To share your thoughts, see this survey.


Dr Katrina Raynor, research fellow, University of Melbourne

Dr Georgia Warren-Myers, lecturer in property, University of Melbourne

Melanie O’Neil, research assistant, University of Melbourne

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