Politics
Port Melbourne Inclusionary Zoning Policy Requires 20 Percent Affordable Units, Lowering Average Rents Relative to Peer Cities
The policy mandates that new developments reserve one fifth of units for below-market tenants, which the council projects will add 180 qualifying apartments within Port Melbourne boundaries by the end of 2027.
How we reported this
The mayor's office issued its quarterly housing compliance report on 7 July, confirming that the Inclusionary Zoning Policy now applies to every residential project exceeding 10 units inside Port Melbourne city limits. Developers must set aside 20 percent of units at rents capped at 60 percent of area median income, a requirement that covers both new construction and substantial renovations.
Why the update arrives this quarter
The report follows the city council's June approval of 47 building permits, the highest monthly total recorded since 2023. Policy analysts note that the ordinance was written to align with the 2025 regional housing target of 1,200 net new units, and the latest filing shows Port Melbourne already accounts for 312 of those units under active review.
Residents seeking rental housing will see the change first in projects along the former industrial waterfront blocks, where two approved sites must now include 72 rent-restricted apartments. Families currently paying market rates above 1,800 dollars per month become eligible for the capped units once certificates of occupancy are issued, according to the eligibility rules published by the housing department.
Budget figures and comparisons to other cities
The same compliance report lists an enforcement budget line of 1.4 million dollars for the current fiscal year, drawn from the general fund. It states that Port Melbourne's 20 percent set-aside exceeds the 12 percent average required in five other port jurisdictions of similar population size. The Productivity Commission has found that each additional percentage point of required affordable units correlates with a 3 percent reduction in market rents within the same census tract over a five-year period.
Next steps include a public hearing scheduled for 22 August at city hall to review the first six months of permit data. The legislation requires the planning department to publish an updated list of qualifying projects every 90 days, with the next release due on 5 October.