Victoria faces $5.4bn choice between level crossing removals and almost 20,000 social housing builds

News.com.au

12-05-2025

The Allan government is facing a $5.4bn choice between 25 level crossing removals and an almost 20,000 home building surge to help tackle the state's affordable housing crisis.
It comes as the Victorian Housing Peaks Alliance has warned Victoria is 80,000 social homes short of what is needed for the next decade, and the state has the lowest proportion of social housing in Australia.
As treasury prepares the state's 2025-2026 budget for next week, the Community Housing Industry Association as well as the powerful Property Council of Australia, are calling for level crossing removal funds to be repurposed to build social housing.
CHIA has calculated redeploying the funds would allow for the creation of 17,823 additional social homes over the next decade, while putting $6bn into the state's Social Housing Growth Fund would boost that number to almost 20,000.
CHIA chief executive Sarah Toohey said it was time for the Allan government to prioritise the state's 'very pressing and urgent housing crisis'.
'The level crossing removals have done amazing things where they have been through, and there's more public realm around the stations, but after 85 of them it's diminishing returns,' Ms Toohey said.
'We have 55,000 households waiting for social housing right now, they are in a range of circumstances — and some are sleeping on couches and in cars and sleeping rough because they can't get a social housing space.'
While early changes to the level crossing program had undoubtedly saved lives, Ms Toohey said it was known that homelessness caused early death and that there were families enduring domestic violence because they had nowhere else to go to.
Ms Toohey said after years of asking the government for more social housing funding, the response had always been 'how do we pay for it'.
'So we have done the hard work of looking through the budget and finding what we can reprioritise,' she said.
The Victorian Housing Peaks Alliance data shows just 3.1 per cent of the state's housing supply is social housing, compared to a 4.5 per cent national average.
Victorian Council of Social Services chief executive Juanita Pope said social housing was foundational for people being able to live a good life.
'Strong, sustained investment in growing public housing and community housing should be the number one infrastructure priority for this state,' Ms Pope said.
'It's the key to solving our housing crisis and other big societal challenges.'
Property Council of Australia Victorian executive director Cath Evans backed the proposal, describing the state's housing crisis as in need of urgent action.
'A redirection of funds that would kickstart the rollout of 20,000 new social housing homes would offer a much-needed boost to Victoria's supply and ensure more vulnerable members of our community have a place to call home,' Ms Evans said.
'While infrastructure projects are essential to the fabric of a growing city, the government must prioritise housing if we are to continue to grow as Australia's soon-to-be largest and most prosperous state.'
She added that reductions to taxes on foreign investment and more financial support for first-home buyers could also assist with establishing more housing availability for tenants and to help keep property prices from escalating and pushing more people into needing social or community housing spaces.
Common Equity Housing Limited chief executive Liz Thomas said the federal election result had been a 'clear signal people want housing to be a priority', and warned that waiting lists would continue to grow if social housing wasn't made a priority.
A driving force behind co-operative housing formats, where struggling families and individuals are given a say in how their complex is managed, as well as secure, long-term residency, Ms Thomas said they could be virtually self funding once established.
Ms Thomas said most of the households moving into her co-op residences were couples or single parents with two kids — and not just people on government payments.
'They are hospitality workers, retail workers, independent retirees who don't qualify for public housing,' she said.
Co-op resident and single mum Lucy Bowen is studying to become a speech pathologist to better provide for her young family.
But with her only alternative to community housing being living with her mother and brother in a three-bedroom home, said it was time to prioritise housing.
'I feel so secure and know that my children are living in a place that is safe, and that takes the stress off,' Ms Bowen said.
'And it's housing that's most important. Everyone needs safe and secure housing, especially children.'
Additional CHIA budget asks, which could all be made revenue neutral, include transferring general lease stock to the community housing sector, improving lending requirements for community housing organisations and trialling a Community Housing Sector Innovation Fund to support entrepreneurs seeking to increase social housing supply.