Daniel Andrews goes all out on Victorian ‘urban renewal’ and public housing

The Andrews government says its housing policy statement represents the ‘biggest shake-up to planning and housing reform in generations’.

Victorian Premier Daniel Andrews. Picture: NCA NewsWire / Luis Enrique Ascui

The Andrews government will demolish and redevelop 44 public housing towers, introduce Australia’s first short-stay accommodation levy, overhaul the planning approval process and establish a new agency to resolve rental disputes.

Premier Daniel Andrews on Wednesday announced his government’s ambitious housing statement, promising to build 800,000 homes over the decade to 2034, in a bid to accommodate a Victorian population which is forecast to reach 10.3 million by 2051.

While the tourism industry has warned the new levy will cost jobs and make holidays less affordable, the property and construction sectors largely welcomed the announcements, despite warning of significant ongoing challenges presented by construction costs and labour shortages.

The state opposition said the promise to build 80,000 homes a year was not credible, while the Greens claimed the plan “could end public housing in Victoria”.

Mr Andrews said the statement represented the “biggest shake-up to planning and housing reform in generations.”

“What’s more important than somewhere to live?” he said.

“Nothing is. We know that we’re simply not building enough houses right now.

“The status quo is not an option, and admiring the problem will only make it worse. Unless we take bold and decisive action now, Victorians will be paying the price for generations to come.”

The Carlton housing commission flats are among those set to be demolished and redeveloped. Picture: Alex Coppel

In what the government has dubbed “Australia’s biggest ever urban renewal project”, 44 public housing towers which were built in the 1950s, ’60s and ’70s are set to be demolished and redeveloped by 2051.

The towers will be replaced by 10 per cent more public housing, but some of the land will also be made available to developers, with the aim of tripling the numbers of people living across the 44 sites from 10,000 to 30,000.

Towers in Flemington, North Melbourne and Carlton are set to be prioritised first.

A 7.5 per cent levy on consumers renting short-stay accommodation through platforms such as Airbnb and Stayz is expected to raise $70m annually, which the government says will be used to fund the building of social and ­affordable housing.

Mr Andrews described the levy as a “modest charge” that would go towards boosting housing ­supply.

“It’s a direct link between a group of homes that can’t be leased or aren’t being leased out long term, and those … that will be,” he said.

Victorian Tourism Industry Council CEO Felicia Mariani.

Victorian Tourism Industry Council chief executive Felicia Mariani said the levy would “smash tourism”, and exacerbate an emerging slump in regional tourism. “What the government is proposing is not a tax on short-stay platforms or property owners, it’s a tax on consumers who rent those properties,” she said.

“If you’re a family that spends $1000 on a rental, get ready to pay an extra $75 to the state government. That’s money that would otherwise flow into local shops, cafes, or tourism experiences during your holiday.”

Other measures in Wednesday’s 44-page policy statement include streamlining the planning process for medium to high density residential developments worth at least $50m in Melbourne or $15m in regional Victoria, provided they include at least 10 per cent affordable housing.

The government will hire 90 new planners, and encourage the building of granny flats by abolishing the requirement for planning permits for second dwellings of 60sq m or less.

It also announced plans to convert close to 80 under-utilised commercial office buildings in central Melbourne into 10,000-12,000 apartments and mixed-use properties.

Government land across 45 sites in Melbourne and regional Victoria is set to be rezoned, in a bid to provide sites for another 9000 homes.