“This is in the context of a challenging investment environment in Victoria due to increased construction costs and difficulties sourcing finance.”
Linda Allison, the Urban Development Institute of Australia’s Victoria chief executive, said some of the additional requirements needed to access the program meant some projects no longer stacked up financially.
Cath Evans, the Property Council of Australia’s Victoria executive director, says the figures about new homes are encouraging.Credit: Justin McManus
“In these cases, developers are choosing the conventional approvals route, which could include a protracted process at VCAT. And permits are great, but construction is better,” she said.
Jonathan O’Brien, a founder of housing activism group YIMBY Melbourne (Yes In My Backyard), said it was good to see changes happening that could encourage homes in the short term.
But an analysis and map by the group of another key state initiative, the Future Homes program, has raised concerns about how effective it will be at delivering more homes. The scheme provides off-the-shelf designs for developers and promises faster approvals if they are used 800 metres away from centres such as railway stations, but no projects are yet under way.
The government’s own mapping tool estimates there are 666,000 eligible individual lots under the program, but analysis by YIMBY Melbourne estimates the true figure would be closer to 3250 lots, plus another 68,000 that could be viable if consolidated.
O’Brien’s analysis ruled out about 63 per cent of lots in the Future Homes radius because the lots were too small and didn’t have a neighbouring lot that could be consolidated. The designs were created with 1200 square metres of space in mind and are unlikely to suit anything below 900 square metres.
O’Brien said Australia had smaller lot sizes than in Europe and the cost of purchasing and merging these was a major barrier in housing policy.
“Consolidation is the wicked problem of Future Homes,” he said.
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“Future Homes would be much more successful if the government were providing an incentive and a method to consolidate the land because that is what is scarce.”
O’Brien said the government had an opportunity to make the scheme more effective this year when competition opened for a new round of designs with more storeys, which would deliver a better return for builders.
He said another key issue was the new bespoke planning rules that were yet to prove they were faster than what they had replaced.
“Developers need certainty, and if they have never seen anyone go through the Future Homes process, which no one has, and they have never seen the success rate, they’re going to go with the devil they know,” O’Brien said.
“The promise that this allows you to bypass things, is undermined by the fact that it has actually just invented a whole lot of new steps.”
A spokesman said the state government was pulling all the levers it could to boost housing supply.
“We’ve given industry certainty and since the release of the Housing Statement more than 30,000 homes have come into our accelerated assessment pathway,” he said.
“Our Future Homes program is just one of many levers we’ve pulled to help build 800,000 high-quality new homes for Victorians over the next decade.”
Source Agencies
