The funding, announced by Mr Albanese at the Melbourne Assembly civic forum at Federation Square, is part of a federal program designed to reward states that meet housing targets under the National Housing Accord. New modelling from the National Housing Supply and Affordability Council indicates Victoria is expected to deliver 287,000 new homes by July 1, 2029, nearly 32,000 above its minimum target, despite currently lagging by about 6,000 homes in its annual quota.
Former New York mayor Bill de Blasio, who introduced mandatory inclusionary zoning in New York City, warned that without aggressive public sector intervention, the private sector will not produce enough housing for working-class families. "A city without enough affordable housing will simply fail," he said in prepared remarks. He argued that developers could build higher or denser than normally allowed in exchange for about 25 per cent affordable housing, a model he said could be used effectively in Melbourne.
The state government currently uses a limited version of inclusionary zoning through its Development Facilitation Program, which fast-tracks projects if developers include 10 per cent affordable housing. However, developers can opt out by paying a fee of 3 per cent of the project's value into a government housing fund.
Planning Minister Sonya Kilkenny said the program had delivered 16,000 new homes, with 18 per cent being affordable. Opposition planning spokesman David Southwick said the Liberals wanted to lower property taxes to boost supply. The Planning Institute of Australia backed mandatory targets, with Victorian president Patrick Fensham calling for transparency and a mandatory social housing contribution. The Urban Development Institute of Australia's Linda Allison opposed a one-size-fits-all approach, arguing a mandatory target would raise housing costs for buyers and that affordable housing needs government funding.