Affordable Housing Rental Scheme

More Victorians than ever are renters, including many who helped Victoria survive the pandemic. They are the essential workers who run our supermarkets, hospitals, schools and aged and disability care facilities, deliver us water and power, take away our rubbish and recycling, and make our cities, suburbs and towns work.

There is a growing gap between the existing private rental market and social housing. Many working households are being priced out of private rental. More than 162,000 households, or 1-in-4 of the 650,000 households in the private rental market, are experiencing rental stress. That means more than 30 per cent of their income is spent on rent, which reduces the money available to pay for other essential items and expenses.

The Victorian Government’s Affordable Housing Rental Scheme will help address the gap in housing affordability and supply for the many low to moderate income households who are experiencing rental stress and cannot afford to buy a home. The program aims to encourage other investors, such as superannuation funds, to also build or buy additional affordable rental properties.

Under the program, fixed-term rental agreements of at least 3 years will be available to low to moderate income households in metro Melbourne and regional Victoria based on the income eligibility criteria below. Essential government funded service delivery workers such as nurses, police, teachers and care workers will also be eligible in areas of workforce shortage in regional Victoria, recognising the importance of these jobs to local communities. Eligible households on the Victorian Housing Register will also have the opportunity to apply for any relevant properties.

Table 1: Eligible income thresholds

Proof of income will be required and rents will be set based on the location and number of bedrooms to ensure that homes are affordable wherever they are located. In metropolitan Melbourne, property rentals will be set at least 10 per cent below the market rent of that area, with the additional protection of a cap set at 30 per cent of a median household income.

In regional Victoria, where supply of affordable housing is a critical challenge, rents will never be more than the median market rental price, with the same protections of a cap set at 30 per cent of a median household income. There will also be an additional focus on eligibility for essential workers in areas of workforce shortage in regional Victoria.

Homes Victoria will own the properties and the program’s 2,400 tenancies will be managed by specialised rental tenancy managers. This will enable Homes Victoria to develop and strengthen partnerships with private and community sector tenancy managers, by building their capacity to support future growth of the affordable housing sector and ensuring a quality experience for tenants. The successful tenancy managers will be selected through a request for tender process in 2022.

The first affordable rental properties are anticipated to be available in regional Victoria, specifically Ballarat, Greater Geelong and Bendigo, from late 2022. The first metropolitan Melbourne properties in Ascot Vale, Ashburton, and Heidelberg are also expected to be available from late 2022. Properties will come online throughout 2023-25, with the majority of properties coming online in 2025.

Once the program is operational, available properties will be advertised online. Listings will include information about the applications process.