Summary of Victorian Planning Policy Reforms (2023–2025)

The development industry has been handed a deck of cards by the Victorian State Government with the aim to provide planning mechanisms to address the low Housing supply, with a target of delivering 2.24 million homes by 2051. Key initiatives include:

Major Amendments and Reforms

• Amendment VC257 (27 Feb 2025):
  • Introduced updated housing targets.
  • Announced 50 Activity Centres for high-density development (up to 20 storeys).
  • Introduced the Housing Choice and Transport Zone (targeting 800,000 homes).
  • Defined built form rules for ‘Activity Centre Core’, ‘Inner’, and ‘Outer Catchments’.
  • Introduced a Built Form Overlay with strict design rules and limited third-party rights.

• Amendment VC274 (28 Feb 2025):
  • Introduced Precinct Zone (PRZ) to support strategic precinct planning.
  • Applications under PRZ are exempt from notice and review requirements.

• Amendment VC267 (6 Mar 2025):
  • Revised Clause 55 for townhouse and low-rise development, reducing design restrictions but increasing sustainability focus.
  • Notably, Clause 55 removes Neighbourhood Character and Residential Policy as standards for consideration.
  • Deemed to comply provisions were introduced to Clause 55, with an application exempt from third party appeal rights (VCAT) if certain design standards are numerically meet.
  • Introduced Clause 57 for four-storey developments, emphasizing design quality but with full third-party appeal rights.

• Amendment VC280 – Great Design Fast Track (7 Apr 2025):
  • Created Clause 53.25 to streamline approvals for developments with 8+ dwellings and 2–8 storeys, if high sustainability and design standards are met.
  • Exempt from VCAT review but requires government architect and investment approval.

• Amendment GC252 (11 Apr 2025):
  • Formally applied the Built Form Overlay to the 10 Pilot Activity Centres.
  • Also, the Minister for Planning revoked a series of Ministerial Directions and replaced new ones with infrastructure and developer contributions.

Next Steps

• Further greenfield Precinct Structure Plans announced, updated flood maps, and changes to Clauses 54 and 58 are expected.
• Dual occupancy and small subdivision processes will be streamlined.

Implications for the Industry

Amendment VC280 brings opportunities and challenges for developers and planners by easing approvals and allowing taller buildings, while increasing design and sustainability requirements. The industry is also adjusting to other reforms like Clause 55 and the Housing Choice and Transport Zone. However, unresolved issues such as high construction costs, taxes, and limited financing continue to obstruct viable housing projects. While they bring new opportunities, they also pose challenges for stakeholders. The true impact on housing supply, affordability, neighbourhood integration, and sustainability will become clear over time.

Only then will we see how the cards have landed.