The Activity Centre Program unlocks transit-oriented development across the city
The Victorian Government adopted an ambitious transit-oriented development program—enabling medium-density housing within 60 activity centres across Melbourne.
The Problem
For decades, Melbourne’s planning system pushed new housing to the urban fringe while restricting medium-density development near the train stations and town centres where it makes the most sense. The city’s density profile drops precipitously from high-rise towers to detached houses with almost nothing in between—no walk-up apartments, no mixed-use shopfronts, no gentle six-storey streetscapes of the kind that make Paris, Barcelona, and Melbourne’s own inner suburbs so liveable.
The suburbs closest to jobs, transport, and services were locked under restrictive zoning that prevented anything taller than two storeys on the vast majority of inner-city residential land. Neighbourhood Residential Zones, heritage overlays, and mandatory parking requirements ensured that the most desirable, infrastructure-rich parts of the city remained the exclusive preserve of detached housing. Meanwhile, new residents were funnelled to outer-suburban greenfield estates—far from employment, expensive to service with infrastructure, and contributing to car-dependent sprawl.
The Reserve Bank estimated that planning restrictions added up to 40% to the price of houses in Melbourne. The problem was not a lack of demand for medium-density living—surveys showed many Melburnians wanted to live in townhouses or apartments in inner or middle suburbs—but the planning system had made it functionally illegal to build those homes where people wanted to live.
The Outcome
In September 2023, the Victorian Government announced the Activity Centre Program as part of its Housing Statement, beginning with 10 pilot centres. Over the following two years, the program expanded to 60 centres in three tranches: 10 pilots (gazetted April 2025), 25 Stage 1 centres, and 25 Stage 2 centres.
The program introduced two new planning tools via Amendment VC257 (gazetted 25 February 2025). The Housing Choice and Transport Zone applies to residential land in walkable catchments around each centre, enabling three-to-six-storey housing and exempting compliant projects from third-party objection and VCAT review. The Built Form Overlay applies to activity centre cores—the commercial hearts nearest transit—allowing four to twenty storeys with streamlined approval pathways.
The government estimates the program will enable over 300,000 new homes across all 60 centres by 2051, with the Grattan Institute calculating that it has already boosted feasible housing capacity by more than 110,000 homes, representing some of the most significant changes to Melbourne’s residential planning controls in a generation.
Our Research & Advocacy
Our Missing Middle report (2023) proposed enabling six-storey, mixed-use development within walkable distances of 1,992 transit-accessible activity centres. The report modelled housing capacity, infrastructure costs, and community benefits.
In October 2023—nineteen days after the Housing Statement announced the first 10 pilot Activity Centres—we released Melbourne’s Missing Middle, our flagship report proposing six-storey, mixed-use development within walkable distances of all 1,992 of Melbourne’s train stations and tram stops. The report modelled housing capacity, infrastructure costs, and community benefits, and was endorsed by Dr Max Holleran (University of Melbourne), Colleen Peterson (CEO, Ratio), and Dan McKenna (then CEO, Nightingale Housing). The report articulated a comprehensive vision that the pilot program was only the beginning of.
We then built the tools to expand it. Our open-source Next 25 Stations model ranked every Melbourne train station by suitability for upzoning, and we published analysis of every tranche of Activity Centre draft plans as they were released—identifying where the government was getting it right and where unnecessary constraints remained. More than half of the stations identified by our model were included in the program’s expansion.
We briefed the Department of Transport and Planning, engaged crossbench MPs, and presented our framework to the Legislative Council Select Committee on planning amendments. We pushed publicly on the program’s weaknesses—particularly the 1,000 square metre minimum lot size rule, which we called “the exact rule a legacy planner would create if they didn’t want to see a lot of homes actually get built.” Architecture Australia noted that the Activity Centre Program aligned with the vision YIMBY Melbourne had outlined in Melbourne’s Missing Middle.
The Activity Centre Program represents the most significant shift toward transit-oriented density in Melbourne’s planning history. Our work helped build the intellectual case, public support, and political confidence for it. We continue to push for its expansion to more stations.
Related Research
Melbourne's Missing Middle
Building a liveable, affordable, and sustainable city for all.