Victorian Social Housing Projects Ramp Up

Years in the planning, several of the Victorian government’s Big Housing Build projects are finally under construction. 

The $5.3-billion Big Housing Build program was started in November, 2020, to address the demand for social housing. It aims to deliver more than 12,000 homes during the next four years.

The list of social housing projects has since grown with the Victorian government partnering with developers, including MAB Corporation and Built, to undertake construction. 

This has also led to the adoption of the Ground Lease Model, under which Community Housing Ltd will invest $500 million to build 1110 homes.

Community Housing is part of the Building Communities Consortium with Tetris Capital, the National Housing Finance and Investment Corporation, Icon Kajima, and Citta Property Group. 

The new builds will include 619 social housing homes, 126 affordable homes and 365 market rental homes in Brighton, Flemington and Prahran. Of these, 52 will be specialist disability or fully accessible accommodation.

The state government has put $50 million from the Big Housing Build budget into the Ground Lease Model projects.

The consortium will build and operate the homes for 40 years before returning them to the state government for Homes Victoria to manage. 

The model allows more homes to be built and managed without Homes Victoria having to pause or stop management on any of its current or planned projects.  

Construction has started on 10 featured projects: Bills Street in Hawthorn, Dunlop Avenue in Ascot Vale, Markham Avenue in Ashburton, Tarakan Street in West Heidelberg, Victoria Street and Holland Court in Flemington, New Street in Brighton, Bangs Street in Prahran, Harvest Square in Brunswick West, and Abbotsford Street in North Melbourne.

Ten other projects are in consultation stages. They are Elizabeth Street in North Richmond, Delacombe in Ballarat, Walker Street in Northcote, Oakover Road in Preston, Simmons Street in South Yarra, Wellington Street in Collingwood, Bendigo in Virginia Hill, Barak Beacon in Port Melbourne, Essex Street in Prahran, Bluff Road in Hampton East, and Benalla West. 

Victorian social housing projects being built

^{^ Source: Homes Victoria, Department of Families, Fairness and Housing}

Homelessness numbers increase

During 2017 and 2018, it was estimated that about 1700 homes were needed each year to meet demand. 

However, the Department of Families, Fairness and Housing said the pandemic and other factors, such as increasing rents and house prices, stagnant wage growth and decreasing housing supply, meant that more people were struggling to find social and affordable housing. 

“The pandemic has had a significant impact on employment and incomes for many Victorian families, and this has seen a clear increase in the number of Victorians needing assistance with social housing and putting their name on the Victorian Housing Register,” a department spokesperson told The Urban Developer. 

In March, 2021, the number of new priority applications for social housing was 27,534—a year later it was 30,669. 

The state government has also invested $2.6 billion into the Homes for Victorians strategy to increase the amount of social housing delivered.

Homes Victoria assigns social housing to people who need emergency housing, need to transfer to other social housing, are escaping family violence, need disability support in their housing, have special housing needs, or are aged over 55 but do not fall into any other category. 

▲ The proposed plans by Hayball for social housing at Bills Street in Hawthorn. Source: Homes Victoria

It also manages $31 billion of social housing assets.

In March, 2022, there were 15,302 new applications for housing due to homelessness and the total number of applications was 55,907.

Of the total, 12,023 were single people aged between 25-54 years, 7422 were elderly singles and 6124 were single parents. 

Numbers also increased as the state government intervened to get people into emergency accommodation and off the streets with many of those homeless not yet on the VHR and waiting for a home. 

The Australian Institute for Health and Welfare reported that 101,644 people had approached specialist homelessness services in Victoria for help during 2020-2021. 

The data also noted that the top reasons for homelessness were financial difficulties and escaping domestic and family violence with women seeking the most assistance. 

▲ The proposed plans for social housing at Bangs Street in Prahran. Source: Homes Victoria

Government tries other methods

This year, the state government introduced a levy on property developers of 1.75 per cent of the estimated end value of any new residential development with more than three homes or lots. 

It was estimated that this would generate more than $800 million annually to fund more social and affordable housing.

The policy also included exempting rates on social housing developments gradually over four years, enabling rents to be more affordable and allowing for $54 million to be reinvested annually into upgrading public housing. 

Industry lobby groups criticised the idea, saying it would increase housing prices for the end customer, exacerbating the housing affordability crisis.

“Ultimately it is new home buyers who will lose out as the taxes must be passed on in higher land and house prices,” HIA's Victorian chief executive Fiona Nield told The Urban Developer. 

Premier Daniel Andrews later announced the government was taking the policy off the table for good but was disappointed in the reaction from the industry. 

“I’m not in the business of creating super profits for developers if they are unwilling to support sharing those profits with those who need more affordable housing,” Andrews said. 

He also suggested that Property Council chief executive Danni Hunter had supported a profit-sharing model and that the development industry had agreed to share profits if the planning approval process could be streamlined and sped up. 

Meanwhile, the Victorian government is also funding local government initiatives to create social and affordable housing projects.

The City of Melbourne has donated a building worth $12 million at 602 Little Bourke Street with $365,000 to begin refitting it for the Make Room project to find accommodation for Melbourne's homeless. 

The council has secured more than $12.75 million for the $20 million project with committments from the state government, the Ian Potter Foundation, the Lord Mayor's Charitable Foundation and the Gandel Foundation philanthropic grant of $1 million. 

Unison Housing will refit and manage the property with 50 studio apartments and communal spaces and housing and homelessness services and support. 

Construction will start in October and completion is scheduled for late next year.