The country town with an innovative response to the housing crisis
A council in south-west Victoria is putting up its own land to house workers and people struggling to find affordable rental homes in a sign of the state’s worsening housing crisis.
Warrnambool City Council has identified 12 hectares of vacant land where it plans to deliver 50 homes, in an unusual move it hopes will help ease the region’s dire worker shortage.
Mayor Ben Blain at the site of the Warrnambool housing project. Credit: Nicole Cleary
The council would retain ownership of the land but put it up for a 25-year lease with a review of the project after 20 years.
Council figures show Warrnambool’s rental vacancy rate is just 0.8 per cent and the median weekly rental price is $500 – a $100 increase since 2021.
Warrnambool has a population of just over 35,000, but it has a shortfall of about 1600 homes. The regional centre provides jobs and services, including healthcare, to thousands of people in Victoria’s south-west, putting more pressure on existing housing.
The city’s mayor, Ben Blain, said major employers, including the hospital and meatworks, were struggling to attract workers from outside the area partly because there was nowhere for them to live.
“It’s slowing our growth as a city,” he said.
The units will come in a combination of one, two and three bedrooms. Half will be allocated to affordable housing, with rents capped at 75 per cent of the market rate, catering for people unable to break into the private rental market. The others will be for key workers.
Blain said employers would lease the worker units so they could offer homes to their employees.
The council wants permission from the state government to fast-track the planning process so people can start moving to the site within about three years.
While the council will provide the land, Geelong-based modular builder FormFlow will build the houses in a factory offsite. The council will work with community housing group Haven Home Safe to manage the affordable housing tenancies.
Blain with the council’s strategic community planning and policy manager, Ashish Sitoula, at the vacant farmland.Credit: Nicole Cleary
Australian Housing and Urban Research Institute managing director Michael Fotheringham said it was common for councils to provide social housing in other countries, but far less so in Australia, where public and community housing is usually the responsibility of state governments.
“I think we will see more of this from local governments in coming years,” he said. “We need to see more of it.”
Fotheringham said modular housing was a big part of construction markets in North America, Asia and Europe but had a more niche place in Australia.
However, he said the quality of such homes had improved significantly and could now meet high environmental standards.
A spokeswoman for South West Healthcare said the service was working closely with new staff to help find housing and reduce barriers to people relocating to the region.
“As one of the region’s employers, we’re certainly not alone in facing housing concerns for our workforce,” she said.
The site for the project has been used as a buffer zone for livestock saleyards decommissioned last year. The saleyards have had a troubled recent history, with WorkSafe imposing a $12,500 fine on the council without conviction after a platform collapsed during a cattle auction. Nobody was seriously hurt.
Although it’s uncommon, there have been instances in which councils have provided land for social housing. In 2020, Port Phillip Council in inner Melbourne provided a car park to build 46 apartments for people on low incomes.
However, Ashish Sitoula, Warrnambool’s City Council strategic community planning and policy manager, said his council’s project was unique because it catered for both key workers and people on moderate and low incomes, rather than solely applicants on the public housing waiting list.
An example of modular housing, which is common in some countries. Credit: Dominic Lorrimer
He estimated the project would cost $15 million to $18 million. The council is to seek funding from philanthropists, private equity and governments.
Sitoula said the council had witnessed the housing struggle firsthand when it tried to help mental health workers find a home in Warrnambool.
“For each and every one, finding a house has been an epic battle,” he said.
The council intends to rezone the vacant farmland from agricultural to residential. Sitoula said the housing project site had already undergone testing and there was no contamination that would limit building on the land.
The Australian Housing and Urban Research Institute released a report last month that found Australia’s rural and regional housing markets had suffered significant disruption over the past five years. It said shortages of construction workers, building materials and land for development were the greatest impediments to new housing supply outside metropolitan regions.
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