Latest statement from MAV President Cr Jennifer Anderson on the State Government’s Housing Capacity Targets

Our sector is not interested in playing a blame game on this issue – all levels of government and the private sector need to be working together to ensure all communities have access to the housing they need.

It’s in this context that the MAV was disappointed by the media report accusing Victorian councils of “failing to meet” housing targets.

The MAV rejects this claim and its underlying assumptions.

As we have repeatedly outlined, planning controls and decisions are not the primary factor influencing housing construction.

The planning system – and councils’ role in it – is one contributing factor among many to unlocking housing supply. And on this front, councils have consistently demonstrated the ambition to unlock housing supply and build liveable communities throughout Victoria.

As it stands today, the final housing targets have not been introduced to any planning schemes, and the tools to measure housing capacity have not been made available to councils.

Councils have sought explicit directions about how planning schemes should be reviewed in this context, but none have been issued.

In July this year, the MAV wrote to the Minister for Planning requesting urgent advice about how councils can update their planning schemes to integrate housing capacity targets along with planning scheme reviews, in the interests of implementing Plan for Victoria.

We have not yet received a response.

As a sector, we continue to call for a co-ordinated response to the housing challenges we face and stand ready to be engaged in a meaningful partnership.

Explainer: how councils are responding to the ‘housing targets’

• The ‘housing targets’ have not yet been introduced to planning schemes.
• Plan for Victoria (PDF - 32MB) was published on 28 February 2025. It included the final ‘housing targets’ for every local government area and set a ‘short term milestone’ to introduce them to all planning schemes.
• Until this happens, councils cannot consider the ‘housing targets’ when making planning decisions. Decision-makers must instead consider the out-dated regional settlement policies found in every planning scheme (incorporating Plan Melbourne or the local Regional Growth Plan).
• The methodology for setting the final ‘housing targets’ has also not been shared with councils.
• Plan for Victoria clarifies that the housing targets are about capacity, not just delivery: “The targets will ensure that every planning scheme identifies enough realistic opportunities for new development to deliver the targeted number of homes”. Until the government publishes its methodology about how overall development capacity in a council area should be measured, and how “realistic opportunities for new development” should be identified, councils are unable to meaningfully review the controls in their planning schemes that impact housing capacity.
• In the meantime, councils continue to rely on housing capacity studies they have completed earlier, and their own assessments of housing capacity and opportunities for development in each municipality. Almost all councils understand that there is sufficient capacity within municipal planning schemes to comfortably facilitate the ‘housing targets’.
• The government has committed to developing a housing capacity assessment tool for all councils to use, which the MAV and councils have welcomed because it will allow for consistent housing capacity assessment methodology across the state. The assessment tool is not yet complete.
• Councils are currently undertaking municipal planning scheme reviews, due 31 October 2026, as required by the Planning and Environment Act 1987. One of the purposes of planning scheme reviews is to review all local planning controls against state policies and directions. These reviews cannot meaningfully consider housing capacity until ‘housing targets’ have been introduced to planning schemes and the housing capacity assessment tool has been completed.
• The MAV wrote to the Planning Minister in July 2025 to request an urgent update on when the ‘housing targets’ will be introduced, and when the housing capacity assessment tool will be available, in the interests of aligning the current municipal planning scheme reviews with the implementation of Plan for Victoria.
• ‘Housing targets’ alone cannot compel development. Actual construction depends on development feasibility, influenced in part by planning regulations – but also by the availability and cost of materials and labour, Commonwealth and State taxes, interest rates, and property investment trends, none of which are controlled by the planning framework.