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The good, the bad, and the costly

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The significant community investment in social housing that is required for Victoria will come from a narrow and often under pressure sector of the community, being new home buyers, as well as through rate increases for all Victorian ratepayers.

That’s the message delivered to the Municipal Association of Victoria (MAV), its metropolitan and regional councils, who today saw for the first time the Victorian Government’s two-pronged approach to funding social and affordable housing.

From July 2024 new residential developments of three or more lots will contribute 1.75% of their build cost to a social and affordable housing fund. The MAV and Victorian councils support the use of mandatory contributions to provide for social and affordable housing, however such contributions are best sought across broad sectors of the State economy.

Combined with the investment of Victoria’s Big Housing Build, this will go a long way towards providing a roof over Victorians’ heads.

Disappointingly, the Victorian Government has walked away from its long partnership with Local Government to provide services to the residents of social and affordable housing, by exempting itself from paying council rates and charges on almost 70,000 social housing dwellings across metropolitan Melbourne and the regional cities of Ballarat, Bendigo and Geelong. On the high level numbers provided by the State Government this morning, over ten years this will divert upwards of $540 million away from vital council services such as parks, waste management, kindergartens, active transport and maternal and child health.

“Increased access to social housing dwellings is vital to relieving homelessness and having housing options for those in critical need – every Victorian agrees on that,” MAV President Cr David Clark said.

“But providing local services to these residents – the families and individuals living in these dwellings - is also critical. Social housing should be supported and subsidised by the Victorian Government, not just by the ratepayers of each municipality.

“The cumulative impact of this reversal on rates and charges, of other cost-shifting measures, as well as the financial constraints of the rate cap, once again places Council budgets in a no win position when it comes to just maintaining, let alone enhancing, much needed community services.

Communities are asking councils to do more than ever in their local areas while the State actively works to undermine their financial sustainability.

“Social housing is clearly a State responsibility. Yet once again the State is using the ratepayer as its means to money for its own purposes, like the fire services or parks levies. Rates are 3 per cent of the national tax take, or one sixth of the taxes paid to the State each year. Yet the State continues to “mine” our already small tax base for its own service delivery.”

For further information, contact the MAV Strategic Communications team on (03) 9667 5590.