The two inner-city councils that have to open up their streets to density

Two inner-city councils will be compelled to find space for thousands more homes as the Allan government expands the scope of its plan to increase density around transport corridors across the city.

On Thursday, Premier Jacinta Allan unveiled Melbourne’s next 25 “activity centres” earmarked for higher-density living as part of the plan to encourage developers to build hundreds of thousands of new homes.

The next 25 activity centres for extra housing have been announced.Credit: Chris Hopkins

Previously announced activity centres have been confined to areas up to a kilometre around railway and tram stations, but two new “citywide” activity centres have been named in the City of Yarra and City of Melbourne.

The government says that while these areas are already built up, they have more transport services than anywhere in the state and have underutilised pockets of land that could accommodate more homes.

Allan said the new activity centre classifications for Melbourne and Yarra councils would look at those communities “street by street, block by block” to target underutilised land for development.

Victoria has pledged to work with the councils to map out these areas, find strategic spots to alter with more dense zoning and fast-track developments.

The government first announced 10 activity centres as part of its housing statement in 2023 and committed to add 50 more last year, naming 25 of those precincts. Allan and Planning Minister Sonya Kilkenny identified the remaining hubs on Thursday, including inner suburbs South Yarra and Prahran, inner-northern communities such as Brunswick and Thornbury, and outer suburbs including Dandenong.

But most of the centres are in Melbourne’s east and south-east, including on the Frankston line past Caulfield and along the rail corridor beyond Clayton.

Glen Eira Mayor Simone Zmood said the local government was very disappointed the state was taking over plans for the centres “with little to no consultation of councils or local communities”. Final details for the centres will be announced after consultation.

“Nearly every train station in Glen Eira — Bentleigh, Carnegie, Caulfield, Elsternwick, Glen Huntly, Ormond and Murrumbeena — has now been classified as an activity centre subject to new planning reforms,” Zmood said.

She said the council had been planning its centres for years to balance the need for housing with neighbourhood character and amenity. She singled out the inclusion of Elsternwick as particularly disappointing, given Kilkenny had approved the council’s structure plan for the suburb before it went out for exhibition just two weeks ago.

“The sudden introduction of an activity centre plan at this stage raises serious concerns about how the state-led process aligns with state-authorised planning efforts,” Zmood said.

Holmesglen, East Malvern and Ashburton are also named in the east.

Locations on the Alamein line will be classified as “neighbourhood” activity centres to accommodate smaller growth because of the line’s reduced capacity. Ashburton and Bentleigh will have similar classifications.

Kilkenny said the final plans would acknowledge that “every centre is different”, and height limits would be imposed accordingly.

The government hopes to encourage residential development around train stations and tram stops, but is yet to specify height limits for the newest sites. It hopes to add a total of 300,000 homes to 50 of the activity centres by 2051 and 60,000 to the first 10 announced by the state.

On Sunday, Allan and Kilkenny scaled down the height limits for neighbouring streets around some of the already announced activity centres.

Under the government’s activity centre proposal, the planning process for multi-storey residential dwellings will be fast-tracked from up to five years to as little as 12 months. Residential construction would also be streamlined for developments that meet their new height limits.

New centres in Melbourne’s north include Coburg and Brunswick, along the Upfield line; Preston and Thornbury, along the Mernda line; and another along St Georges Road, which is serviced by tram.

City of Yarra Mayor Stephen Jolly commended the announcement on Thursday, while also referencing concerns about the impact of the safe injecting room in North Richmond, which has been controversial with some neighbours.

“If they’re looking to get the ball rolling, I’ve got just the place that’s crying out for revitalisation – and that’s Victoria Street in North Richmond. They can start tomorrow,” he said.

The Upfield train line has one of the worst timetables on the Metro network. Credit: Jason South

The City of Melbourne was contacted for comment.

Merri-bek Mayor Helen Davidson recognised the need for more homes and said all levels of government needed to take action to address the housing crisis, but that transport investment had to match it.

“The Upfield train line has the poorest service levels of all lines in Melbourne, and the status quo of one train every 15 to 20 minutes in peak hour is not enough,” Davidson said.

“We have been calling on the state government to urgently prioritise duplicating the Upfield train line between Gowrie and Upfield stations to improve frequency and reliability of this service.”

The state government insists the Metro Tunnel, due to open this year, will free up capacity but has delayed the level crossing removal project on the Upfield line from 2027.

Davidson said the council’s planning scheme had capacity for 7500 extra dwellings in Coburg and 8500 in Brunswick.

Greater Dandenong Mayor Jim Memeti, speaking alongside the premier on Thursday, said the local government supported the opportunity to make way for “more housing in the right location” after consultation.

Opposition housing spokesman Richard Riordan said the plan did nothing to address affordability, the government was showing “blissful ignorance”, and it would make Melbourne a “dystopia”.

Riordan said the government should be building public housing on Crown land and relieve taxes to stimulate residential construction.

Property Council Victorian executive director Cath Evans welcomed the announcement but agreed tax incentives to attract investment and restore market confidence should be on offer.

“If we want these activity centres to be more than just a plan on paper, we need targeted tax incentives – such as land tax relief and stamp duty concessions – to close the development feasibility gap,” Evans said.

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