The 120,000 homes that are ready to be built – but work hasn’t started

Almost 120,000 dwellings are approved and ready to be built immediately, Victorian councils say as they hit back at claims they are responsible for a NIMBY bottleneck behind a lack of housing supply.

Analysis provided to The Age by the Municipal Association of Victoria suggests there are 119,536 houses, townhouses and units that have been approved under Victoria’s planning laws on which construction has not yet begun.

Over 250 local community groups this week plan to submit a “Liveable Victoria Manifesto” to the government.Credit: Craig Abraham

The research comes as the state government finalises its long-promised response to the housing crisis with a package including stripping councils of at least some of their planning powers, part of a push to squeeze an extra 1 million homes into Melbourne’s existing suburbs by 2050.

State and federal governments and the property industry have frequently singled out local governments amid the housing crisis, blaming them for blocking developments on behalf of constituents.

Premier Daniel Andrews on Tuesday warned that the state needed to “get on and build more houses” by making faster planning decisions.

“If everyone says no, then we’re going to be hundreds and hundreds of thousands homes short and I don’t think any of us want to live in a state like that,” Andrews said.

Premier Daniel Andrews and Prime Minister Anthony Albanese in Carlton on Tuesday.Credit: Paul Jeffers

“I say respectfully to people who say, ‘not here’ … well, where are we going to build these homes?

“We need to build the stock that people want, for some people that will be a quarter acre block … for other people that will be apartment living.”

But the figures suggest that local governments are not solely responsible, with builders and developers cancelling and shelving approved projects due to soaring building costs, rising interest rates and uncertainty linked to labour shortages.

Municipal Association of Victoria deputy president Jennifer Anderson.

The analysis also found that more than 98 per cent of housing permits were granted by councils’ professional planning officers – without interference from elected councillors.

“The evidence is clear ... removing planning powers from councils is not going to fix the housing crisis because the current planning system is not where the problem is,” said Municipal Association of Victoria deputy president Jennifer Anderson.

“There are more pressing issues that will need all levels of government to work together with genuine consultation.”

Recent analysis by accounting firm KPMG found that the number of houses, townhouses and apartments approved for construction but not commenced has soared to near-record levels.

In the City of Maribyrnong in Melbourne’s west, there are live approvals for 2678 dwellings not yet built. Developers have sought extensions of time on permits for more than 4700 dwellings.

Labor-aligned Maribyrnong Mayor Sarah Carter said some permits had been extended up to eight times over the past decade.

“We are aware that some developers seek extensions to permits because the economic conditions have not been right to start projects.

“But we also know of developers that are land banking, warehousing permits and approvals; significant development sites have been abandoned for a decade at a time.”

Carter called for government action to stop developers land-banking to maximise their profits from housing.

Maribyrnong City Council Mayor Sarah Carter.Credit: Penny Stephens

Anderson said the Municipal Association of Victoria and its member councils welcomed planning reforms that would contribute to housing supply and affordability.

“Addressing inclusionary zoning, land-banking, and support for councils who have affordable housing targets in their planning schemes will be far more effective in tackling the housing crisis,” she said.

The analysis comes as more than 250 local community groups, along with prominent academics, this week plan to submit a “Liveable Victoria Manifesto” to the government, aimed at countering the property industry’s push for relaxed planning rules.

The manifesto, which included contributions from planning academic Professor Michael Buxton and Royal Historical Society of Victoria president Dr Charles Sowerwine, pushed back against the idea that councils or NIMBYism (not in my backyard) are to blame for declining housing affordability.

Community campaigners Rosemary West and Ian Morgans.Credit: Paul Jeffers

The group pointed to examples of state-led projects approved for housing development that had not commenced, including at the Highett Gasworks in Melbourne’s south.

“The housing crisis is rooted in tax, economic and immigration policies and the ability of developers to bid-up the price of land and cover the cost with low-regulation, high-rise developments,” said Ian Morgans, a spokesman for Planning Democracy and the Green Wedges Coalition.

The group has called on the state to introduce mandatory inclusionary zoning to require developers to include affordable housing in their projects and for the reintroduction of mandatory height limits to minimise the number of disputes at the Victorian Civil and Administrative Tribunal over “discretionary” building heights.

Housing Industry Association Victorian executive director Keith Ryan said a mixture of factors were to blame for the crisis including local government delays, lower returns on projects and uncertainty linked to labour shortages.

“Victoria’s population is still growing, so there are reasons to be positive about the future, but it could be another painful year coming up,” Ryan said.

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