Definitions around affordable housing in Victoria come into force

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Definitions around affordable housing in Victoria come into force

On the 1st of June, the amendments to Victoria's Planning & Environment Act 1987 came into force which, among other things, provide a definition of affordable housing in the state.

In essence, the new legislative amendments that are now in force provide a definition for what very low, low and moderate income households are and the act now states that affordable housing is housing for households who fit within the income brackets now outlined.

The definition of affordable housing, as described in law, for Victoria is:

...affordable housing is housing, including social housing, that is appropriate for the housing needs of any of the following-- (a) very low income households; (b) low income households; (c) moderate income households.

Housing Affordability and Other Matters Bill 2017

Very low income, low income and moderate income households are defined by income ranges that apply to people living in Melbourne or outside of Melbourne.  On the advice of the Planning Minister, the Lieutenant-Governor of Victoria sets & amends the income ranges.

For Melbourne, the household income brackets for very low, low and moderate income households are:

  Very low income range (annual) Low income range (annual) Moderate income range (annual)
Single adult Up to $25,220 $22,221 - $40,340 $40,341 - $60,510
Couple, no dependents Up to $37,820 $37,821 - $60,520 $60,521 - $90,770
Family (one or two parents and dependent children) Up to $52,940 $52,941 - $84,720 $84,721 - $127,080

For the rest of Victoria, the income brackets are as follows:

  Very low income range (annual) Low income range (annual) Moderate income range (annual)
Single Adult Up to $18,380 $18,381 - $29,400 $29,401 - $44,100
Couple, no dependents Up to $27,560 $27,561 - $44,100 $44,101 - $66,160
Family (one or two parents and dependent children) Up to $38,590 $38,591 - $61,750 $61,751 - $92,610

With these definitions now described in law, it allows developers, councils and the state government to negotiate affordable housing outcomes with a specific set of unambiguous definitions. 

As Ratio Consultants note the amendments to the act do not specify what the cost of housing should be for the people who fit within the income bands, noting "it is generally accepted that, to avoid housing stress, housing costs should not exceed 30% of household income."

Likewise, the legislative changes included no targets for affordable housing throughout all or some of the new development pipeline for Victoria but as Ratio further note, the affordable housing can be a strong negotiation tool.

Councils are increasingly seeking to strongly encourage or even require affordable housing in new developments (City of Melbourne’s West Melbourne Structure Plan and Fishermans Bend discretionary requirements, and Glen Eira’s Carnegie, Elsternwick and Bentleigh Structure Plans).  

The voluntary provision of affordable housing can be a strong negotiation tool with recent agreements including in the Queen Victoria Market Munro Precinct where PDG are providing 15% affordable housing (being 56 apartments out of the total 360).

Ratio Consultants

The Department of Environment, Land, Water and Planning (DELWP) has also published guidance for those seeking to negotiate affordable housing agreements within the context of the new definitions, see planning.vic.gov.au for more information.

Lead image credit: vic.gov.au

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