State government overrides council to unlock stalled housing site
A remediated Melbourne site sat empty for over a decade — what finally unlocked it reveals a structural problem with how Australia builds housing.
A former quarry and landfill in Oakleigh South in Melbourne, has sat empty and remediated for over a decade while the local council declined to move on it. Now the Victorian government has stepped in, approving planning scheme changes that will enable more than 1,100 homes to be built on the site, along with a village centre, community facilities, open space, and upgraded intersections. The project is called Talbot Village, and it is a useful case study in what actually unblocks housing supply when the system fails to do it on its own.
A remediated site that sat idle for a decade is not a market failure — it is a planning failure
The basics of the housing crisis in Australia are not complicated. Demand for housing has grown faster than the supply of it, and prices and rents have risen accordingly. Every credible analysis arrives at the same structural conclusion: the country needs to build significantly more homes, in places where people actually want to live, near jobs and public transport. Talbot Village clears that bar. Oakleigh South sits within the middle ring of Melbourne, connected to the Pakenham and Cranbourne rail lines and close to Monash University and the employment corridor along Princes Highway. It is exactly the kind of location where density makes sense.
The site itself has a history that illustrates how housing supply gets strangled by inertia rather than principle. The former Talbot Quarry and Landfill was remediated, a long and expensive process, yet still sat unused. Planning approval had been blocked at the local level for more than a decade. A site that had already been cleaned up, in a middle-ring suburb with good bones, simply did not get built on. That is not a market failure in the traditional sense. It is a planning failure, and it has a real cost: homes that did not exist, people who rented or were priced out, demand that did not get met.
A site that had already been cleaned up, in a middle-ring suburb with good bones, simply did not get built on.
State override of local planning is now the mechanism that delivers supply
What the Victorian government has done here is the same thing it did with the former Kingswood Golf Course in Dingley Village, covered here when that approval came through: it used state-level planning powers to override local paralysis and unlock supply. That mechanism attracts criticism, and some of it is fair. Local councils exist for a reason, and communities have genuine interests in how their neighbourhoods develop. But there is a difference between democratic input into planning decisions and a decade of inaction on a remediated brownfield site while housing affordability deteriorates. The latter is not a feature of the planning system worth protecting.
Queensland is working through the same tension. Its draft State Planning Policy, examined in an earlier piece, proposes to standardise rules and unlock land across the state in ways that reduce the discretion of local councils to block development. The instinct is the same as what Victoria has done in Oakleigh South: pull the approval power upward when local gatekeeping produces bad outcomes.
The development details matter — and Talbot Village gets the sequencing right
The details of Talbot Village are worth taking seriously. The development will be staged, with homes built as infrastructure comes online, which addresses one of the legitimate complaints about poorly sequenced development: communities that get the density before they get the schools, roads, and services. There is a childcare centre and kindergarten planned, an indoor community facility, and upgraded intersections. These are not afterthoughts. Whether the sequencing holds in practice depends on how the government manages delivery through construction stages, but the design intent is right.
The approval also establishes the planning framework rather than issuing construction permits. Further approvals will be required before ground is broken. That is a realistic description of how large staged developments work, not a hedge. But it does mean the timeline from here to occupied homes is not short. The land is ready. The question is execution.
Local councils will always resist supply — which is why state governments have to force it
The broader lesson is the one that keeps recurring across Australian cities: supply-side wins require political will to override local resistance, and that resistance is structurally predictable. Existing homeowners in established suburbs face no personal benefit from new supply nearby, and often perceive real costs, traffic, construction noise, changed neighbourhood character. Councils, which are elected by those existing residents, tend to reflect those preferences. The result is a system that consistently under-delivers housing in the places where demand is highest. State governments, which bear the political weight of housing unaffordability without having the same electoral incentives to block supply, are increasingly the ones who have to break the logjam.
Talbot Village is more than 1,100 homes that would not otherwise exist. That is not a small thing.
Sources
Victorian Government — More Than A Thousand New Homes Coming To Oakleigh
The Bearing — 932 Homes on Former Golf Course is a good thing
The Bearing — Queensland rewrites planning rules to unlock housing - Is that ok?
The Bearing — It's about supply and demand. More homes brings the price down
Frequently Asked Questions
Why did Talbot Village take so long to get approved?
The former quarry and landfill site in Oakleigh South had already been remediated but sat unused for more than a decade because local council planning approval was not forthcoming. The Victorian government ultimately had to step in and override the local process to unlock the site.
How many homes will be built at Talbot Village in Oakleigh South?
The Victorian government's planning scheme changes enable more than 1,100 homes to be built on the site. The development will also include a village centre, childcare and kindergarten facilities, an indoor community facility, open space, and upgraded intersections.
Can the state government override local councils on planning decisions in Victoria?
Yes. The Victorian government has state-level planning powers that allow it to approve planning scheme changes even when local councils have not acted. Talbot Village in Oakleigh South and the former Kingswood Golf Course in Dingley Village are both recent examples of the state using those powers to unlock stalled housing sites.
Why do local councils block new housing developments?
Councils are elected by existing residents, who often perceive costs — traffic, construction noise, changed neighbourhood character — from new development nearby with little personal benefit. This creates a structural incentive for councils in established suburbs to resist new supply even when broader housing demand is high.
Does planning approval mean construction can start straight away at Talbot Village?
No. The approval establishes the planning framework for the development but does not issue construction permits. Further approvals will be required before ground is broken, meaning the timeline from this announcement to occupied homes is not short.