Affordable Housing Background Paper
Introduction
Wyndham City, one of Melbourne’s fastest-growing growth corridors, stands at a critical crossroads. The expiration of its first Affordable Housing Strategy (2022–2025) has opened the door for a bold, ten-year plan (2026–2036) to tackle one of the most pressing issues facing the municipality: the lack of social and affordable housing. This background paper, released in October 2025, serves as the evidence-based foundation for that new strategy. It acknowledges that housing is a basic human right, as set out in the International Covenant on Economic, Social and Cultural Rights, and that fulfilling this right requires a holistic view of health, wellbeing, and equity.
Wyndham is not just dealing with a housing shortage; it is dealing with a crisis of housing affordability, homelessness, and housing stress. With a population of over 337,000 expected to surge to nearly 490,000 by 2046, the city cannot afford to stand still. The paper makes it clear: without deliberate intervention, the shortfall in social housing and affordable rental housing will deepen, forcing low-income households, key workers, and vulnerable families out of the area.
Housing and Health: The Hidden Costs of Poor Housing
One of the most striking arguments in the paper is the direct link between housing and health. The World Health Organisation has long recognised housing as a social determinant of health, and Wyndham City Council’s Council Plan incorporates this understanding. Poor housing conditions such as damp, mould, and overcrowding lead to respiratory and cardiovascular diseases. In fact, one study cited in the paper estimates that health costs from mouldy or damp housing are three times the cost attributable to sugary drinks in Australia. That places poor housing alongside smoking and obesity as a major public health risk.
The pandemic reinforced this connection. During lockdowns, housing became a shield or a weapon: those without adequate space, private green areas, or safe shared facilities suffered more. The paper notes that few people factored in isolation risks or the need for home offices when choosing housing pre-COVID. Now, equitable housing is seen as essential infrastructure for community wellbeing.
Equitable Housing and Homelessness: A Growing Crisis
The concept of equitable housing goes beyond simply building more units. It asks: who benefits from urban development? In Wyndham, as in much of Australia, lower-income residents face impossible trade-offs: long commutes, overcrowded homes, substandard conditions, or rents that consume most of their income. The paper notes that this doesn’t just hurt families it damages the entire community. When economic diversity erodes, everyone loses.
Homelessness is the most visible symptom. While Wyndham’s rate of homelessness is second only to Brimbank in the region, the paper highlights a powerful economic argument for action: providing last-resort housing for homeless people costs less than leaving them on the streets. For every $1 invested in emergency beds, the community receives $2.70 in benefits equivalent to $10,800 per year per person. Over 20 years, that’s $216,000 in social and economic returns. Housing affordability stress is now the fastest-growing cause of homelessness in Australia, outpacing family breakdown and mental illness.
Wyndham’s Unique Demographics: Diversity and Disparity
Wyndham is one of Melbourne’s most diverse municipalities. Forty-eight per cent of residents were born overseas well above Greater Melbourne’s 35.7 per cent. Nearly half speak a language other than English at home, with Punjabi, Hindi, Mandarin, Urdu, and Telugu being the most common. The city has a higher proportion of children and fewer seniors than Greater Melbourne, but that is changing rapidly. By 2031, the retirement-age population will jump by 48.5 per cent, while the working-age population will grow by 35.9 per cent. This shift will place enormous pressure on affordable housing for older adults, many of whom are women at risk of homelessness.
The labour market tells a similar story. Wyndham has a lower proportion of high-income earners and a higher proportion of low-income workers than Victoria as a whole. Professionals make up the largest occupation group (22 per cent), followed by clerical workers and tradespeople. Importantly, 57 per cent of local workers live in Wyndham; the other 43 per cent commute in. That means key workers nurses, teachers, police, emergency staff are either struggling to live locally or travelling long distances, adding to congestion and reducing quality of life.
Household Structure and Housing Mismatch
Wyndham is a city of families. Couples with children make up 46.4 per cent of households, compared to 33.1 per cent in Greater Melbourne. Single-parent households are also more common. Yet the housing stock does not match these needs. A staggering 87.3 per cent of dwellings have three or more bedrooms, while less than one per cent have one bedroom, and only 6.2 per cent have two bedrooms. This is a fundamental housing diversity problem. Meanwhile, 15.2 per cent of households are single-person households, and 24.7 per cent are two-person households. Combined, nearly 40 per cent of residents live in smaller households, but the housing supply is dominated by large, four-bedroom detached houses.
Overcrowding is the result. The Australian Bureau of Statistics classes overcrowding as a form of marginal housing, and in Wyndham, 98 per cent of marginally housed residents live in overcrowded dwellings. This is not just a comfort issue; it affects mental health, disease transmission, child development, and social stability.
Housing Stress: The 30:40 Indicator
Housing stress is a key measure in the paper. Using the standard 30:40 indicator households in the bottom 40 per cent of income distribution spending more than 30 per cent of income on housing. Wyndham has 13,144 households in housing stress. That includes 6,992 households in rental stress and 6,152 in mortgage stress. More than 6,000 households, including over 2,000 families, need affordable housing immediately.
What does “affordable” mean? The Victorian Government defines income ranges for affordable housing (non-social) as of July 2025: for a single adult, very low income is up to $30,870; low income is $30,871–$49,380; moderate income is $49,381–$74,080. For a family with children, moderate income caps at $155,550. Over half (59 per cent) of Wyndham households earn within these ranges, yet the private market is increasingly out of reach.
Rental Affordability and the Missing Middle
Rents in Melbourne rose 56.8 per cent between 2015 and 2025, far outpacing incomes and inflation. Across Victoria, less than one per cent of rental properties are suitable for households on income support. Wyndham does not even rank in the top ten most affordable LGAs for such households. The paper notes that the Victorian Government’s Big Housing Build while welcome, will only raise social housing stock to 3.5 per cent of all housing, still below the national average of 4.5 per cent. In Wyndham, social housing accounts for just 0.9 per cent of households. That is abysmally low.
The “missing middle” is a recurring theme. Wyndham has only 11.5 per cent medium-density housing (compared to 21.6 per cent in Greater Melbourne) and just 0.7 per cent high-density housing. Medium-density options townhouses, duplexes, low-rise apartments, are precisely what’s needed near activity centres and transport hubs. They facilitate social connection, walkability, and affordability. As one expert quoted in the paper says, “The ‘missing middle’ is not just a housing typology gap. It is a chance to fill a social gap.”
Social Housing: Decades of Underinvestment
Australia has underinvested in social housing for decades. Victoria’s 3.1 per cent share of social housing is among the lowest in the country. By comparison, the Netherlands has 29.1 per cent, Austria 24 per cent, Denmark 21 per cent, and Sweden 17 per cent. Even New Zealand (4 per cent) and Canada (4.2 per cent) outperform Australia. To merely catch up, Victoria needs to build 7,990 new social housing dwellings every year for ten years. The paper identifies Wyndham as a high-demand area according to the Victorian Auditor-General’s Office.
The consequences of this shortfall are severe. Households that cannot access social housing are forced into the private rental market, intensifying competition and pushing up prices for everyone. The private market, by design, has been “going upmarket” for decades, producing fewer homes affordable to low- and moderate-income households. Key workers essential to the modern urban economy—are often ineligible for social housing but cannot afford market rents. That is why state and federal governments are increasingly interested in affordable rental housing near employment hubs.
Policy Context: From Pandemic Disruption to National Accord
The paper traces the policy landscape from the pandemic to the present. COVID-19 disrupted global supply chains, caused shortages of raw materials and labour, and forced the construction sector to adapt. Some of those adaptations like greater reliance on domestic materials and forward purchasing may help long-term resilience.
At the Australian Government level, the National Rental Affordability Scheme (NRAS) ends in June 2026. It has been replaced by a suite of new measures: the National Agreement on Social Housing and Homelessness (NASHH), providing $1.8 billion annually to states; the National Housing Accord, aiming for 1.2 million new well-located homes by 2029 (with Victoria committed to 2,546 affordable homes); and the Housing Australia Future Fund (HAFF), a $10 billion fund supporting social and affordable housing, including for Indigenous communities, women, children, and veterans. New tax incentives for Build to Rent (BTR) developments also came into force in January 2025, requiring a proportion of apartments to be offered at affordable rents.
The Victorian Government’s Housing Statement: The Decade Ahead 2024–2034 focuses on five areas: faster planning decisions, cheaper housing near jobs, renters’ rights, more social housing, and a long-term housing plan. For Wyndham, the most relevant is the pledge to unlock surplus government land, including industrial land at Werribee Junction (though only due diligence so far). Tax incentives for BTR include a 50 per cent reduction on land tax and exemption from the Absentee Owner Surcharge for up to 30 years.
Wyndham City Council’s Role and Planning Framework
Wyndham City Council cannot solve the crisis alone, but it has significant influence. Its Wyndham Plan envisions a city of 20-minute neighbourhoods, where residents can access jobs, services, and amenities within a short walk or bike ride. The Housing and Neighbourhood Character Strategy (2023) sets a 15-year vision with four principles: housing choice for everyone, locating new homes in key centres, enhancing landscape character, and protecting the natural environment. However, due to state government changes, the planning scheme amendment to implement this strategy is on hold.
The Wyndham Planning Scheme already encourages higher density near rail stations, activity centres, and the Princes Highway corridor. The expired Affordable Housing Strategy 2022–2025 was a trailblazer, updating the planning scheme to include affordable housing objectives and supporting specific developments like Unison Housing’s Cottrell Street apartments and Haven Home Safe’s Stewart Drive townhouses.
Future Options: What Council Can Do
The paper outlines a range of future options, many of which other councils have already piloted.
Inclusionary zoning is a standout. This planning intervention mandates or incentivises a proportion of social or affordable homes in new residential developments. While Victoria lacks a statewide mandatory scheme, Yarra requires 10 per cent affordable housing in significant rezonings, and Monash requires contributions for developments of 20+ dwellings. Wyndham supports a well-designed statewide mandatory scheme. In its absence, Council can use Section 173 agreements (voluntary but binding) to negotiate affordable housing contributions. Bayside City Council, for example, used a Section 173 agreement to require 10 per cent key worker affordable housing and a 0.1 per cent contribution to a social housing fund.
Housing trusts are another mechanism. Hobson’s Bay, Merri-bek, Port Phillip, and Mount Alexander have all established local housing trusts to collect land, cash, and philanthropic donations for affordable housing. Wyndham will explore creating its own Wyndham Affordable Housing Trust under the new strategy. A trust can own assets, partner with community housing providers, and provide long-term sustainability.
Council-owned land and infrastructure offer opportunities. While little vacant land remains, Council could build affordable housing above car parks, libraries, or community centres using air rights. Port Phillip transformed airspace above a council carpark into housing; Melbourne’s Queen Victoria Market precinct now includes 49 affordable dwellings above a 500-space carpark. Ground leases leasing Council land to a consortium for up to 50 years are also viable under the Local Government Act 2020, with the land returning to Council at lease end.
Partnerships are critical. Wyndham already works with Unison Housing, Melbourne City Mission, Haven Home Safe, and Women’s Housing Limited. The H3 Alliance (Health, Homelessness, Housing) brings together health, housing, and homelessness services using a collective impact model. One success is the youth foyer in Werribee, providing supported accommodation for 16–24 year olds at risk of homelessness, integrating housing with education and employment support.
Homelessness and At-Risk Residents
For vulnerable households those escaping family violence, living with a disability, or on very low incomes, the risk of homelessness is acute. The H3 Alliance is Council’s primary vehicle for intervention. Unison Housing is the central access point for homeless households in Wyndham. Melbourne City Mission focuses on young people, especially those leaving out-of-home care at 18. The foyer model has proven effective in breaking the cycle of disadvantage. Council will continue to support these partnerships and trial proactive approaches to prevent homelessness before it occurs.
Affordable Housing Targets: The Plan for Victoria
The Plan for Victoria sets housing targets for every LGA. For Wyndham, the target is 99,000 additional homes by 2051-25,000 in non-greenfield areas and 74,000 in greenfield areas. That equates to 3,807 new homes per year. While ambitious, the paper notes that targets only work if they are realistic, backed by streamlined planning, surplus government land, and political will. Wyndham will need to advocate strongly for the state to unlock crown land, particularly in the East Werribee Precinct.
Definitions and Key Terms
The paper ends with a helpful glossary. Affordable housing is priced so that very low to moderate income households can meet other basic living costs. Community housing is delivered by not-for-profit organisations. Housing stress is the 30:40 indicator. Inclusionary zoning is a planning tool to mandate affordable units. Key workers include teachers, nurses, police, and emergency personnel. Public housing is state-owned and managed. Social housing is the umbrella term for public and community housing, with rents capped at 25–30 per cent of income.
Conclusion: A Call to Action
This background paper is unflinching. It shows that Wyndham’s housing crisis is not abstract it is 13,144 households in housing stress, 0.9 per cent social housing, and a rental market that has abandoned low-income families. But it also shows a path forward. Inclusionary zoning, housing trusts, ground leases, air rights, and strong partnerships have all worked elsewhere. The next Affordable Housing Strategy (2026–2036) must turn these options into action. As the paper states: “No level of social exclusion, where households that cannot afford to live in Wyndham are forced out, is acceptable.” The time for advocacy, direct action, and partnership is now.
Also Read: 10 Year's Affordable Housing Delivery and Financial Strategy