Binding housing targets mandate local councils to enable growth
The Victorian Government introduced tooling and requirements for Councils to zone for feasible, rather than theoretical housing capacity. This ensures that Councils cannot fake their housing capacity in order to limit development.
The Problem
Victoria’s 79 local councils had no binding obligation to deliver housing. Many inner and middle-ring councils—governing the areas closest to jobs, transport, and services—actively restricted supply through restrictive zoning that stopped new homes being built to meet demand. Boroondara, for instance, maintained a planning scheme that allowed only two storeys to be built on more than 90% of its land. There was no accountability mechanism: when a council blocked new homes, no one could do anything about it.
The consequences were severe and measurable. Melbourne’s inner suburbs became increasingly unaffordable, with planning restrictions in the most desireable areas adding more than $120,000 to the cost of an apartment. Younger and lower-income residents were excluded, suburbs aged, and schools began to close. The planning system implicitly rewarded councils that said no. Councils could keep wealthy incumbent residents happy, push infrastructure costs onto other municipalities, and face zero consequences for the housing they prevented.
Meanwhile, the people who would have lived in the homes that weren’t built—renters, young families, and essential workers—continued to be excluded from the planning process. Community consultation models systematically favoured the time-rich over the time-poor, property owners over renters, and those who already lived in a suburb over those who wanted to.
The Outcome
On 24 February 2025, Premier Jacinta Allan announced final housing targets for all 79 Victorian local government areas as part of Plan for Victoria—the state’s new 30-year strategic plan. The targets call for 2.24 million new homes by 2051, with 70% directed to established infill areas and 30% to outer growth areas. Metropolitan Melbourne accounts for 1.68 million of those homes.
The targets are backed by the strongest enforcement mechanism of any Australian state. Premier Allan stated plainly: “Work with us to unlock space for more homes, or we’ll do it for you.” Councils that fail to zone for their allocated growth face direct state intervention. Key to this is a requirement for capacity to be feasible, rather than just on-paper. This closes a key loophole that councils have previously used to reduce development in their jurisdictions.
New South Wales announced its own council-level housing targets around the same time, but Victoria’s use of feasible capacity, combined with clear enforcement mechanisms, makes the state’s reforms more robust than those of any other Australian jurisdiction.
Our Research & Advocacy
In April 2024, we released Missing Middle Housing Targets (opens in a new tab)—our second flagship report—which proposed binding annual housing targets for inner-middle Melbourne councils. The report modelled a demand-driven allocation methodology incorporating apartment prices, development costs, land availability, and infrastructure access, proposing 40,000 new homes per year across these councils, backed by a “carrot and stick” enforcement framework with financial incentives for compliance and reduced planning autonomy for persistent failure.
The Victorian Government’s draft targets followed two months later, in June 2024. The conceptual alignment was clear: targets directed at inner-suburban councils, based on proximity to transport and services, enforced through state intervention. Our targets for key LGAs — Darebin, Kingston, and Yarra — aligned closely with the government’s published figures.
We presented our methodology to the Planning Minister’s office and engaged directly with councils. We built an interactive housing targets dashboard, making the data accessible to journalists, policymakers, and the public. We pushed publicly on the areas where the government’s approach fell short of our recommendations — particularly the use of 30-year capacity targets rather than annual construction targets, and the risk that outer-suburban councils had been allocated targets higher than could feasibly be built given development economics.
Victoria’s housing targets represent a fundamental shift in how the state holds local government accountable for housing delivery. Our research helped frame the debate, our modelling provided a credible benchmark, and our advocacy helped build the political case for enforcement with teeth.
Related Research
Missing Middle Housing Targets
An accountable system for housing abundance — 40,000 new homes every year. Melbourne's planning system lacks accountability. Our demand-driven housing target model ensures more homes are built where people want to live.