It’s about supply and demand. More homes brings the price down
The Greens say the Richmond housing redevelopment is a gift to developers. The supply numbers tell a different story.
The Victorian Greens want to protect public housing tenants in Richmond. That is a legitimate goal. But their response to the government's redevelopment plan at 139 Highett Street, which condemns the project because it hands land to private developers, misunderstands the mechanism by which housing costs actually fall. You cannot want cheaper housing and oppose more housing at the same time. The two positions are in direct contradiction.
The net gain is 580 dwellings — and the Greens are treating that as a loss
The Greens' media release describes the plan as "a massive handout to private property developers." The site will move from 220 public homes to around 800 dwellings, including 650 build-to-rent units and 150 community housing units. The Greens are correct that this represents a net reduction in strictly defined public housing, and correct that community housing comes with less favourable rent settings than the old model. Those are real concessions worth naming honestly.
But the headline figure is 800 dwellings where 220 stood before. That is a city adding homes to a market that desperately needs them. Melbourne's rental vacancy rate has been running near historic lows. Over 100,000 Victorians are on the public housing waitlist, a number the Greens themselves cite. The waitlist does not shrink by preserving the existing stock unchanged. It shrinks when supply expands.
The mechanism rewards holding, not selling — and supply is the only thing that breaks it
The underlying economics here are not complicated. When more dwellings enter a rental market, landlords face more competition for tenants. Competition pushes rents down, or at least slows the rate at which they rise. This is not a theory favoured by one side of politics. It is the finding of housing economists across the spectrum, and it is why cities with the most restrictive planning regimes consistently have the least affordable housing. The constraint on supply is the engine of unaffordability.
Protecting the people already housed, while blocking the development that would house more people, is a policy that looks compassionate from the inside and functions as exclusion from the outside.
Build-to-rent is worth addressing directly, because the Greens characterise it as little more than corporate profiteering. The research does show build-to-rent rents running above market in some configurations, and the tax treatment of the sector deserves scrutiny. But the relevant question is not whether build-to-rent is the ideal housing model. It is whether 650 additional rental dwellings in inner Melbourne exert downward pressure on rents compared to having fewer. They do. Each new unit added to a constrained market reduces the competition among renters chasing the existing stock.
Preserving 220 homes does nothing for the 100,000 on the waitlist
The Greens' preferred alternative, refurbishing and retaining the existing towers, would preserve 220 homes. That is genuinely good for the 220 households currently in them. It does nothing for the 100,000-plus on the waitlist, and nothing for the private renters across Melbourne competing for stock that is not growing fast enough to meet demand. Protecting the people already housed, while blocking the development that would house more people, is a policy that looks compassionate from the inside and functions as exclusion from the outside.
There is a version of the Greens' critique that has merit. The transition from public to community housing is a downgrade in security and affordability for the tenants who live through it. The government should be pressed on relocation arrangements, on whether the community housing component is genuinely affordable, and on how it plans to manage the net reduction in public stock. These are legitimate political fights. The Greens have the standing to pick them as the local member.
What they cannot credibly argue is that the right response to a housing shortage is to leave a constrained inner-Melbourne site at a fraction of its potential density. The city's affordability problem is, at its foundation, a supply problem. We have covered this pattern before with different proposals, including what happens when mandatory public housing quotas make marginal developments economically unviable and how demand-side subsidies inflate prices when supply cannot respond. The common thread is that well-intentioned interventions which ignore supply constraints tend to worsen the underlying problem while appearing to address it.
The 800 dwellings going up at Highett Street are not a handout to developers. They are 800 households who will not be competing with existing renters for the same shrinking pool of available stock. Over time, that is what affordable housing looks like. It is not a tower preserved at 220 units while a waitlist of 100,000 grows longer outside the gate.
Sources
The Bearing — Greens demand 10% public housing quota but can't see the obvious win
The Bearing — How subsidies meant to fix housing affordability are enriching developers instead
The Bearing — Could a public developer solve our housing shortage?
Frequently Asked Questions
Will the Richmond public housing redevelopment actually make rents cheaper?
Adding 800 dwellings to a market running near record-low vacancy rates increases the stock available to renters, which puts downward pressure on rents by forcing landlords to compete for tenants. The effect is gradual and diffuse rather than immediate, but constraining supply — the alternative — is precisely why rents stay high.
Why are the Greens opposing a development that adds more housing?
The Greens' objection is that the redevelopment converts 220 public housing units into predominantly private and community housing, which they characterise as a net loss for public tenants and a windfall for developers. Their focus is on tenure type and tenant security rather than total dwelling count.
What is the difference between public housing and community housing in Australia?
Public housing is owned and managed by state governments, with rents typically set at around 25 percent of a tenant's income regardless of market rates. Community housing is managed by not-for-profit providers and, while still subsidised, generally carries less favourable rent settings and offers tenants weaker security of tenure.
Does build-to-rent housing lower rents or is it just for wealthy renters?
Build-to-rent developments in Australia have in some cases charged above-market rents, and the sector's tax treatment warrants scrutiny. However, each additional dwelling added to a constrained market reduces the number of renters competing for existing stock, which exerts downward pressure on rents across the broader market regardless of the individual dwelling's price point.
How many people are on Victoria's public housing waitlist?
More than 100,000 Victorians are currently on the public housing waitlist. That number does not shrink by preserving existing stock unchanged — it requires expanding the total supply of housing across all tenures.