Council considers innovative solution to ease the housing crisis

Published on 17 April 2024

image of key in lock

Mornington Peninsula Shire is looking for innovative ways to tackle the growing housing crisis that is devastating families and individuals in our community.

While social housing is largely the responsibility of the state and federal governments, the Mornington Peninsula has seen next to nothing from existing programs, such as the Victorian Government’s Big Build.

We are therefore asking our community if they would consider a development contribution scheme, which would treat social housing as essential infrastructure, much like public open space, car parking and drainage.

Council last night voted to consult with our community on this idea. After considering all community feedback, Council will decide whether to take a proposal for a development contribution scheme to the Victorian Government.

This approach aims to help address the housing crisis on the Mornington Peninsula, which has a relatively small rental market heavily dominated by short-stay rental accommodation.

It is now significantly more expensive to rent a home on the Peninsula than in Melbourne and we have a shortage of approximately 4,716 social housing units across the Shire. If nothing is done to address this, that shortfall will grow to 8,051 housing units by 2041.

Our tourism and hospitality sectors are struggling to attract workers due to a lack of affordable accommodation. Low-income local residents are being forced out of the region – away from their families and support networks – or are being rendered homeless. A shocking 12 per cent of our homeless residents are sleeping rough each night, making us the fourth worst LGA in Victoria.

One potential solution is a mandatory development contribution scheme, with the funds raised used to increase the stock of social housing (government subsidised and community rental housing) on the Peninsula.

The scheme would require planning permit applicants to contribute 3.3 per cent of the market value of all developments that result in a net increase in the number of dwellings on the Peninsula or an increase in industrial or commercial floor space.

Developments exempt from the scheme would include:

  • renovations to existing homes
  • new homes that replace an existing home
  • granny flats
  • public buildings such as schools, community facilities, recreation facilities
  • accommodation that already provides a community benefit, such as aged care facilities and rural worker accommodation
  • small-scale extensions to industrial and commercial developments.


Community consultation may result in further exemptions being included in any final proposal.

Funds raised would be directed towards social housing initiatives within the municipality, such as the development of new social housing projects or support for existing housing programs delivered by State Government or local registered housing providers.

This scheme could help deliver in the order of 600 to 1,000 social housing dwellings – representing between 9 and 17 per cent of total need for the Shire to the year 2041.

Changes in Victorian Government policy in recent years have given local governments power to play a larger role in the provision of social housing. While the power remains limited, these changes strengthen the view that the large and increasing shortfall of social housing can be best addressed by action from all three tiers of government, in partnership with the private and community sectors.



Quotes attributable to Mayor Councillor Simon Brooks:
“We expect this consultation to generate a lot of community interest, as it should. There are costs and benefits to this approach and all need to be brought to the table for debate.

“We need a diversity of views to help Council make an informed decision. We are seeking feedback on the different components of the scheme and the different options proposed and are keen to hear what the benefits and impacts would be for our community and stakeholders.

“We welcome all feedback. Already, we are hearing from our homeless service providers how this will help ease the housing and homelessness crisis. There are understandably also concerns about the impact of the proposed scheme on future developments. All views will be carefully considered before any decision is made on whether to proceed.”

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