Victorian first development levy to boost affordable housing

New developments in Bayside will contribute 0.92% of the value of the project towards affordable housing under a new proposed contribution scheme that is the first of its kind in Victoria.

Bayside City Council is proposing to introduce the affordable housing contribution levy in order to encourage construction of affordable housing in the region.

Bayside Mayor, Councillor Fiona Stitfold said that the Victoria first contribution levy reflected Bayside’s commitment to addressing the lack of affordable housing in Bayside and the broader southern Melbourne region.

“A lack of affordable housing means a greater risk of experiencing vulnerability. When households find themselves in financial stress, finding affordable options that do not require an excessive commute to work or to visit loved ones are vital,” Cr Stitfold said.

“We recognise that up to 24% of Bayside households will require some kind of housing assistance by 2041. Council has done the strategic work to develop this proposed levy as a mechanism for investment in affordable housing. We are committed to working with the development and construction industry to encourage more affordable housing as it is sorely needed.”

“There is precedence for a levy of this kind which would be similar to those operating to encourage the provision of open space and alternatives to carparking. These are established practices in planning scheme across Victoria,” she said.

The contribution levy would raise funds from the development of housing and accommodation including aged care facilities, office, retail, industry or warehouse land uses. Single dwellings, extensions and replacement buildings would be exempt.

The contribution would be paid directly to an independent third-party organisation such as Homes for Homes. Bayside City Council would not be involved in any collection or distribution of the contributions.

Council approved the preparation of a planning scheme amendment to facilitate the delivery of the levy at the June Council meeting. The proposed Amendment follows on from Amendment C184bays which was approved by the Minister for Planning in May 2023 and incorporated the Bayside Affordable Housing Strategy 2021 into the Bayside Planning Scheme.

The planning amendment would require the authorisation of the Minister for Planning. Community feedback would be sought as part of the Planning Scheme Amendment process.

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