Key Indicators

Signals for Market/Industry: The failure of the incentive model suggests current policies are inadequate to address the affordable housing crisis.
Leading Indicators: Performance of the "Affordable Housing Investment Partnerships" (AHIP) program offered by the Victorian Government.

Regional Perspective

In Melbourne, a decade of experience has shown that voluntary developer incentives have failed to yield any affordable housing units. This failure in the CBD raises significant concerns about how affordable housing objectives will be met in precincts served by the Suburban Rail Loop (SRL), necessitating more stringent strategies.

Immediate Implications

What Happens Next: Pressure is expected to mount on the Victorian Government to enact mandatory affordable housing requirements.
Time-Sensitive Opportunities or Risks: An opportunity for developers and investors to engage in designing new financing mechanisms with the government before "value capture" is finalized.

What to Watch

Leading Indicators: Government announcements on "value capture" for SRL funding.
Expected Next Developments: Planning approvals for housing developments around SRL stations, with an emphasis on affordable housing quotas.
Key Decision Points: The government's decision on whether to impose mandatory requirements or continue with incentive models.

Analysis

The failure of Melbourne's affordable housing scheme reflects a structural challenge in engaging the private sector. Reliance on voluntary incentives has proven ineffective, calling for a shift towards more stringent policies to meet affordable housing needs, particularly in the context of major infrastructure projects like the SRL.