Following the 2017 passing of the Housing Affordability and Other Matters Bill 2017 (previously) the Planning and Environment Act 1987 (the Act) was amended on 1 June 2018, representing the State Government’s first step in actively encouraging the private sector to deliver affordable housing through the planning system.

The amendments include:

  • - Addition of objective “to facilitate the provision of affordable housing in Victoria” to Part 1 of the Act.
  • - Definition of affordable housing added – “… housing, including social housing, that is appropriate for the housing needs of very low, low, and moderate-income households”.
  • - Section 173 agreements identified as a mechanism for voluntary affordable housing agreements “…a Responsible Authority may enter into an agreement with an owner of land for the development or provision of land in relation to affordable housing”.

The salary range for each household category (very low, low and moderate) has been published in the Government Gazette and roughly equate to 50% or less of median income, 50-80% of median income and 80-120% of median income, respectively. Two different ranges have been provided, one for Greater Melbourne and one for the rest of Victoria.

Whilst changes to the Act help to demystify the voluntary provision of affordable housing and will assist developers and Responsible Authorities in their negotiations, the Act does not actually specify what the cost of the housing should be for these household categories. We note that it is generally accepted that, to avoid housing stress, housing costs should not exceed 30% of household income.

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Source: Ratio Consulting