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 hospitals, schools and aged and disability care facilities, provide emergency and safety services, 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 expenses. 

Homes Victoria’s affordable housing rental scheme will help address the gap in housing affordability and supply for many low to moderate income households. This includes renters who are experiencing rental stress and cannot afford to buy a home, but who may not be eligible for social housing.  

Under the scheme, 3 year fixed-term rental agreements of will be available to low to moderate income households in metropolitan Melbourne and regional Victoria. This will be based on the income eligibility criteria below.  

Essential government funded service delivery workers will also be eligible in areas of workforce shortage in regional Victoria, recognising the importance of these jobs to local communities. This includes essential workers such as nurses, police, teachers and care workers. 

In metropolitan Melbourne, property rentals will be set at least 10 per cent below the market rent of that area. There will also be the protection of a cap set at 30 per cent of a median household income.  

In regional Victoria, 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.  

Eligible households on the Victorian Housing Register will also have the opportunity to apply for these affordable 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.

Median market rent means the average middle price from a range of low and high rental prices. The affordable housing rental scheme uses the quarterly median rents by local government area reports to understand median rents.

The first affordable rental properties are anticipated to be listed in metropolitan Melbourne from December 2022 and regional Victoria from early 2023. Affordable homes will continue to be listed online throughout 2023, with most homes coming online by 2025.

Available properties will be advertised online by the tenancy manager. The application and allocation process will address key pain points for renters experiencing housing stress and exclusion in the private market. Listings will include further information about the applications process.

Homes Victoria will own the properties and the scheme’s 2,400 tenancies will be managed by a specialised rental tenancy manager. 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.