Melbourne is undergoing a dramatic transformation in its approach to housing, with the Victorian government implementing a suite of radical planning reforms that have taken even seasoned advocates by surprise. In a significant shift, the long-standing influence of 'NIMBY' (Not In My Backyard) sentiment is being challenged by a proactive 'YIMBY' (Yes In My Backyard) movement and a state administration keen to address the affordability crisis.
The Rise of the YIMBY Movement and Policy Surge
For years, Victoria's housing discourse was dominated by residents opposing new developments in their neighbourhoods. However, the landscape has changed rapidly. The formation of Yimby Melbourne in February 2023 catalysed a new wave of advocacy, pushing for systemic change rather than fighting individual planning battles. The group, which includes economist Brendan Coates of the Grattan Institute on its board, found a surprisingly receptive audience in the state government.
"We've seen, in many respects, a planning policy revolution in Victoria," says Coates. The government's response has been swift and substantial. Following a Yimby Melbourne report in April 2024 advocating for local housing targets, the state announced its own enforceable targets for Local Government Areas just two months later. By September, Premier Jacinta Allan and Planning Minister Sonya Kilkenny unveiled the rezoning of land around 50 train and tram stations to allow for higher-density housing, provoking local opposition but signalling a firm commitment to change.
A Sweeping Legislative Overhaul
The reforms extend far beyond specific rezonings. The government has introduced a fast-tracked townhouse code, simplified subdivision rules, abolished mandatory car-parking minimums for new builds, and reformed infrastructure contribution schemes. The most significant change came in December 2024, when parliament approved the most substantial overhaul of the state's Planning Act in decades.
This legislation slashes approval times for certain projects to as little as 10 days and significantly limits third-party appeal rights, largely restricting objections to immediate neighbours. The government's own media release acknowledged the shift, headlined: "A Planning System That Says Yes In My Backyard – Literally". Analysis from the Grattan Institute suggests the combined reforms could increase Melbourne's zoned housing capacity by about 1.6 million homes, a figure that dwarfs comparable efforts in New South Wales.
Challenges and Criticism Amidst Progress
Despite the ambitious agenda, not all stakeholders are convinced. The Planning Institute of Australia (PIA) has welcomed the focus on density but criticises the "blanket" nature of the transit-oriented rezoning, arguing it ignores local context. Kat Smith, a PIA senior policy officer, states the reforms lack a "coherent or integrated" agenda and that crucial local planning controls, including environmental and sustainability standards, have been "effectively switched off".
Furthermore, a major economic hurdle has emerged. Rising construction costs, partly driven by competition from the state's own infrastructure 'Big Build', coupled with relatively stagnant apartment prices in Melbourne, are making new developments less financially viable. A recent industry sentiment survey placed Victorian property sector confidence at 24 points below the national average, the lowest in the country, with two-thirds of respondents blaming state tax settings.
Advocates like Coates and Yimby Melbourne's Jonathan O'Brien identify the next frontier: heritage protection. With 29% of residential land within 10km of the CBD under heritage overlay, they argue that overly restrictive rules are protecting low-quality housing and blocking more efficient land use. The success of Victoria's planning revolution, they caution, now depends on navigating these final obstacles to ensure the new zoned capacity translates into actual, affordable homes.
