Lack of Developer Rules Limits SRL East Affordable Homes
Victoria’s leading voice on community housing warns the Suburban Rail Loop East is set to fail on affordable housing unless the state government makes developer contributions mandatory, not optional.
One of the Victorian government’s objectives in its draft plans for SRL East is to increase the supply of social and affordable housing, however achieving this goal is entirely in the hands of private developers.
The government’s proposed voluntary scheme allows developers to build at higher densities in SRL East precincts if they choose to deliver select public benefits including public open space, commercial office space or affordable housing.
Community Housing Industry Association Victoria (CHIA Vic) estimates the voluntary developer scheme for SRL East would result in barely any affordable housing based on the limited returns of a similar model used in the City of Melbourne.
The outcomes of voluntary schemes pale in comparison to the City of Sydney’s mandatory scheme, which is expected to deliver 3,484 affordable homes by 2036.
CHIA Vic’s call comes as the state government next week opens up hearings that have a chance to influence the final plans.
CHIA Vic acting chief executive Jason Perdriau said: “Melbourne desperately needs tens of thousands of social and affordable homes. But voluntary affordable housing developer contributions simply don’t work.
“A voluntary scheme in the City of Melbourne, that mirrors the one the state government is proposing for SRL East, has not delivered the affordable housing that’s needed. Developers get the same incentive to build office space as they do to build affordable housing. Delivering homes that are affordable for renters is a less profitable choice for developers, so unless it’s mandatory, it won’t happen.
“Mandatory schemes actually work and Sydney proves it with the thousands of affordable homes that are being built because developers are required to contribute.
“It’s great that the Suburban Rail Loop will deliver more homes in well-connected locations, but what’s missing is an effective way to make sure this includes homes that will be affordable for people who are priced out of the private rental market.
“The Victorian government should introduce a mandatory affordable housing contribution scheme in the SRL East precincts. Developers who are building any new housing must either build social or affordable homes within their developments, or financially support the construction of social or affordable homes to be built elsewhere.
“Developers are already required to contribute to essential infrastructure like roads, parks, and community facilities yet contributions to social and affordable housing, which is the foundation for a good stable life, remain voluntary.
“Housing is set to boom around Suburban Rail Loop stations as Victoria’s population grows. But without mechanisms to build more social and affordable homes, the proportion of housing that is genuinely affordable will go backwards and more Victorians on the lowest incomes will get left behind.
“This is an opportunity that Victoria can’t afford to miss.”