As Australia’s fastest-growing municipality, Melbourne faces challenges in providing affordable housing for new residents. With 116,000 current residents, the city’s population has doubled in the past 13 years. Projections call for continued rapid growth: 150,000 by 2021, and nearly 200,000 by 2031.

Building has been robust, with more than 3,000 dwellings completed in 2013, and 8,000 projected for 2015. Rents have outpaced incomes for many residents, according to the city, leading to “housing stress,” where household expenses exceed 30 per cent of the household’s income. In fact, the Government noted, between the years 2001 and 2011, the median cost of rent in the municipality surpassed income growth by a whopping 150 per cent. Half of all renters in the municipality were considered to be under ‘housing stress’ due to this discrepancy.

Looking to address housing affordability and design quality, the city has published a draft strategy titled Homes for People. As apartments are the most prevalent housing type, the strategy focuses on those.

“Affordable and high quality housing in the inner city is good for the economy because it brings people close to where they work and encourages investment and job growth,” said councillor Ken Ong, chair of the Future Melbourne Planning Committee. “Through Homes for People the City of Melbourne is taking steps to ensure Melbourne has diversity in its housing stock to preserve our liveability.”

The draft strategy outlines the city’s aspiration, three major goals, and 12 action steps intended to realize it. It also discusses some ideas that highlight the serious challenges that face Melbourne, and all other successful cities, in providing affordable housing.

“The City of Melbourne’s vision is to be a bold, inspirational and sustainable city,” the Aspiration Statement reads. “It is important that we meet our responsibilities to our community and do the most that we can within our sphere of influence to achieve positive housing outcomes for the city.”

The report outlines three main goals:

Goal 1: Help provide at least 1721 affordable homes (subsidised) for low and moderate income earners by 2021. That figure is 15 per cent of projects expected to be completed in 2016 and 2017 that are in the planning stage now or are further along. That target, 15 per cent, is comparable to the requirements of other Australian capital cities. The affordable housing units should also be indistinguishable from market-rate units within the same development, also known as “tenure blind.” Design quality, location, and appearance should be the same as other units.

Goal 2: Improve the design quality and environmental performance of new apartments. As Melbourne has urbanised, the size of new apartments has dropped. In fact, many new apartments in Melbourne would not be legal in New York, Sydney, or Hong Kong. In addition, poor design features such as insufficient natural lighting and windowless bedrooms have proliferated.

“As our city gets bigger, our apartments don’t need to get smaller. High density doesn’t mean low quality,” Ong noted.

Goal 3: Foster a high level of awareness and knowledge around good housing outcomes. The Council welcomes community participation, said councillor Richard Foster, chair of Future Melbourne People City portfolio.

“We want to work with stakeholders to help provide more affordable housing and develop good housing design standards,” he said. “We also want to ensure both renters and buyers have the know-how they need about good quality homes.”

A number of ideas have informed the draft strategy and helped stakeholders understand the challenges inherent in affordable housing. According to the report:

  • Quality, amenity and performance are decreasing while density is increasing.
  • High levels of housing supply isn’t delivering a good housing mix and social diversity.
  • The majority of high-rise housing in the municipality delivers poor environmental performance.
  • Government has an important role in influencing housing outcomes.
  • The number of vacant apartments is increasing, without a drop in rental prices.
  • The problem is not land supply.

The report lists 12 action steps designed to reach the stated goals. These include:

1. Affordable housing on City of Melbourne owned land: Consider a “Boyd High School style” model for delivery of affordable housing on Council-owned sites that are redeveloped for housing in the future.

2. Development bonuses; support development bonuses to incentivise the provision of affordable housing through the planning scheme in Arden-Macaulay and encourage in other new urban renewal areas (Fisherman’s Bend and E Gate).

3. Inclusionary zoning: Require 15 per cent subsidised affordable housing through inclusionary zoning in the planning scheme in all growth areas (urban renewal areas and the Hoddle Grid).

4. Victorian Apartment Design Standards: Work with the Office of the Victorian Government Architect and other key stakeholders to deliver the Victorian Apartment Design Standards.

5. Ratings tool: Work with the Office of the Victorian Government Architect and other stakeholders to create a ratings tool for new housing development.

6. Higher density living paper: Partner with the Office of the Victorian Government Architect and other stakeholders on a good design and higher density living paper.

7. Good housing campaign: Develop a campaign to help raise awareness of good housing.

8. Resident surveys: Undertake surveys of residents living in apartments in new high density developments to help inform future actions, policies and the market.

9. Inner city coordination: Coordinate the successful delivery of local housing strategies with the Metropolitan Planning Authority, members of the Central Subregion and the Inner Melbourne Action Plan.

10. Housing Advisory Committee: Set up a Housing Advisory Committee to help develop evidence, knowledge and partnerships with industry and community stakeholders and help implement the Housing Strategy.

11. Annual reporting: Report annually to the Future Melbourne Committee on the implementation of the Housing Strategy.

12. City of Melbourne Apartment Design Standards: If required, develop a planning scheme amendment for improved apartment design quality in the municipality to complement the Victoria-wide standards.