Defining a problem is a good first step if you want to address the problem
Victoria's 'affordable housing' label is legally meaningless — and the government has sat on a fix for two years.
The Victorian Greens are not wrong. Across Victoria, the term "affordable housing" covers a patchwork of schemes using different rent-setting methods, different benchmarks, and different definitions of what affordability actually means. An ABC Four Corners investigation found listings advertised as affordable housing that were priced above median market rates. That is not a loophole. That is a system working exactly as its ambiguity allows.
A 2024 parliamentary inquiry, secured by the Greens, recommended the Victorian Government legislate a clear and consistent definition of affordable housing, one tied to what people actually earn rather than to some floating percentage of market rent. The government has not implemented that recommendation. Nearly two years later, the definitional chaos remains, and developers continue accessing government grants, taxpayer subsidies, and public land under an "affordable" label that is not required to mean anything in particular.
This is a genuine problem worth taking seriously. When a term carries no legal content, it becomes marketing. "Affordable housing" that costs more than median rent is not affordable housing. It is regular housing with a press release attached. The Greens are right to push for definitional rigour, and the government deserves criticism for sitting on a clear, reasonable recommendation for the better part of two years.
The definition fixes the rort, not the shortage
But here is where the argument needs to be followed a little further.
Defining "affordable housing" is a precondition for a functioning system, not a solution to the underlying problem. You can legislate the most rigorous income-based definition imaginable, and it will not, by itself, produce a single additional affordable dwelling. What it will do is clarify which existing dwellings qualify, which developers are currently rorting the subsidy system, and what governments are actually getting for their public money. That is worth having. But it is a quality-control mechanism, not a supply mechanism.
You cannot make a constrained good affordable by increasing the money chasing it. You make it affordable by increasing supply.
The structural driver of housing unaffordability in Australia is a supply system that has spent decades producing fewer homes than demand requires. Restrictive zoning, slow planning approvals, infrastructure levies, and consistent political resistance to density have compounded across cities and decades into the housing crisis we now have. The evidence from cities that have taken the opposite approach is consistent: where supply has been allowed to grow, costs have stayed manageable. Tokyo has maintained relatively stable rents against strong demand by permitting continuous construction. Houston's minimal zoning restrictions produce housing costs well below comparable American cities. The policy logic runs one direction: you cannot make a constrained good affordable by increasing the money chasing it. You make it affordable by increasing supply.
Public housing is a legitimate answer, but it requires a commitment governments have avoided
The Greens' preferred alternative, returning to a model where government directly builds, owns, and operates public housing, is a legitimate position with historical precedent. It does address the profit-motive problem that sits at the centre of their critique: private developers optimise for returns, not for housing outcomes, and expecting otherwise is a category error. But public housing at the scale needed to materially shift the market requires sustained capital commitment across multiple parliamentary terms, and Australian governments, of both stripes, have spent decades moving in the opposite direction.
The definitional argument the Greens are making is the least controversial part of their platform, and probably the easiest win on offer. A legislated definition tied to incomes would stop the subsidy rort, give future inquiries a baseline to measure against, and force honesty into a conversation that has been allowed to run on vague language for too long. The government's failure to implement a recommendation that came from its own parliamentary process, two years ago, is not a trivial oversight. It is a choice.
But a definition is a floor, not a ceiling. The Victorian Government should implement the recommendation. And then the harder conversation, about what it takes to actually build enough housing that people can afford, still needs to happen.
Sources
Frequently Asked Questions
What does 'affordable housing' actually mean in Victoria?
In Victoria, 'affordable housing' has no consistent legal definition. Different schemes use different rent-setting methods and benchmarks, which means a developer can legally label a dwelling 'affordable' even if it is priced above median market rent.
Why are some 'affordable housing' listings more expensive than regular rentals?
Because the term carries no enforceable income-based standard, developers can access government subsidies and public land while charging whatever the market allows under an 'affordable' label. An ABC Four Corners investigation found exactly this occurring with listed properties in Victoria.
Would a legal definition of affordable housing fix the housing crisis?
A legislated definition would stop the subsidy rort and create a measurable standard — but it would not produce a single additional dwelling. The underlying problem is a supply system that has spent decades building fewer homes than demand requires, and a definition alone does not address that.
What did the 2024 Victorian parliamentary inquiry recommend on affordable housing?
The inquiry recommended the Victorian Government legislate a clear definition of affordable housing tied to what people actually earn, rather than to a floating percentage of market rent. Nearly two years later, the government has not implemented the recommendation.
Does public housing solve the affordability problem private developers can't?
Public housing removes the profit motive that causes private developers to optimise for returns rather than housing outcomes. However, building public housing at a scale that would materially shift market rents requires sustained capital investment across multiple parliamentary terms — a commitment Australian governments have consistently avoided.