Victorian Labor’s Plan for Housing: Creating 25 New Activity Centres and Building 300,000 Homes

The Labor government led by Allan has introduced 25 “Train and Tram Zone” activity centres aimed at promoting higher-density housing near crucial transport routes. The goal is to create over 300,000 new homes in Victoria by 2051.

The plan involves rezoning upscale neighborhoods like Prahran, South Yarra, and Windsor, where the state will take over planning control to boost housing availability.

Melbourne and Yarra city councils have been identified as “city-wide activity centres” to unlock unused land for development.

Premier Jacinta Allan and Planning Minister Sonya Kilkenny announced the plan in Noble Park on Feb. 27.

“Building more homes near these stations and existing services just makes sense because they are close to jobs, schools, and other opportunities that families seek when purchasing a home,” Allan stated.

Key Transport Hubs to Drive Housing Growth

The rezoning plan designates five train stations along the Cranbourne-Pakenham line—Caulfield, Dandenong, Springvale, Yarraman, and Noble Park—as “activity centres” for high-density housing.

Other key locations include various stations on the Frankston and Sandringham lines, as well as South Yarra.

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Chadstone, currently accessible only by buses, and multiple eastern suburbs stations will also be incorporated.

On the Alamein line, sites will be designated as smaller activity centres, similar to Bentleigh, to accommodate limited growth due to lower train capacity.

A new centre is in the works at Kew Junction, with Brunswick, Coburg, and tram corridors along High Street and St Georges Road in Thornbury included.

For Melbourne and Yarra, instead of rezoning entire precincts, the government will focus on targeted upzoning of specific sites.

“Since there is already considerable height in those municipalities, we will be examining street by street, block by block, where we can, in collaboration with those councils, unlock the underused space that is nearby these excellent public transport connections,” Allan explained.

New Zoning Plan Establishes Building Heights Across Victoria

Victoria’s updated rezoning plan will divide 10 major activity centres into two zones: a core precinct, the busiest area, and a surrounding walkable area.

The core precincts will allow for the tallest buildings, with height restrictions set at 10 storeys in Niddrie, North Essendon, and Preston, and 12 storeys in Broadmeadows, Camberwell, Chadstone, Epping, and Moorabbin.

The walkable area will be further divided into inner and outer sections, with height limits decreasing. The inner area will permit buildings up to four storeys, or six on larger blocks, while the outer area will have a three-storey cap, allowing up to four storeys on larger sites.

In response to the initial announcement, Goldstein member and “teal” Independent Zoe Daniel criticized the lack of consultation and planning, highlighting the absence of provisions for childcare, healthcare, schools, and transportation.

“Addressing the concerning intergenerational inequity created by governments is essential, but once again, the state government is sharing its housing policy with the media before engaging with communities,” she remarked on X.

Former Liberal leader John Pesutto cautioned that the plan would introduce high-rise developments across Melbourne.

“Every part of Melbourne will be covered with these costly high-rises,” he stated.

Pesutto warned that the high construction expenses would render the apartments unaffordable for most Victorians and accused the government of neglecting to involve residents.

“You won’t have a say and you won’t have a choice,” he emphasized.

Business Council Supports Rezoning, Similar to Sydney’s Approach

Allan’s housing plan has received approval from the Business Council of Australia, which advocates for a comparable rezoning strategy.

The council proposes establishing a national fund to increase housing supply and reduce construction costs to combat the ongoing housing crisis.

“We call on the federal government to create a national reform fund, akin to the one established in the 1990s, to encourage states to tackle regulatory and planning obstacles hindering home construction,” CEO Bran Black urged.

The NSW government has also taken action to expand housing in Sydney by implementing the Transport Oriented Development (TOD) program. Seven precincts surrounding major transit hubs have been rezoned to permit high and mid-rise housing within 1.2 kilometers of rail and metro stations.

This initiative is expected to create space for nearly 60,000 new homes and over 126,000 commercial and retail jobs.