Using a Section 173 Agreement to deliver affordable housing

A Section 173 Agreement can be entered into for a range of outcomes, including affordable housing. The 2018 changes to the Planning and Environment Act 1987 (the Act) clarifies affordable housing is a planning objective and the use of voluntary Section 173 Agreements for that end.

An example Section 173 Agreement has been developed to assist in the facilitation of negotiations for affordable housing provision. It is not mandatory to use any part of the example agreement.

Governor in Council Order on Income Ranges

The Governor in Council Order (the Order) is published in the Government Gazette and updated annually to specify affordable housing income ranges as defined under the Planning and Environment Act 1987.

Table 1 and 2 reflect the annual income ranges derived from ABS data on Population and Housing indexed to the Consumer Price Index.

Table 1 – Greater Capital City Statistical Area of Melbourne 
 Very LowLowModerate
SingleUp to $ 26,200$26,201 to $41,920$41,921 to $62,860
Couple (no dependant)Up to $ 39,290$39,291 to $62,870$62,871 to $94,300
Family (Single / Couple with dependant children)Up to $ 55,000$55,001 to $88,020$88,021 to $132,030
Table 2 – Rest of Victoria 
 Very LowLowModerate
SingleUp to $19,090$19,091 to $30,550$30,551 to $45,820
Couple (no dependant)Up to $28,640$28,641 to $45,820$45,821 to $68,730
Family (Single / Couple with dependant children)Up to $40,090$40,091 to $64,150$64,151 to $96,220

Parties to a voluntary Section 173 Agreement for affordable housing would refer to the Order to determine income eligibility of individuals and households targeted in negotiations.

If the affordable housing being negotiated is social housing, parties to a voluntary agreement should refer to more information on Housing Victoria.

When to use the Ministerial Notice

Parties to a voluntary agreement should refer to the Specified Matters under Section 3AA(2) - Ministerial Notice (the Notice) to determine whether the affordable housing they are negotiating is appropriate for the needs of very low, low and moderate income households. A copy of the Notice can be found here:

  • Specified Matters Under Section 3AA(2) – Ministerial Notice (PDF, 221.4 KB)
  • What a Responsible Authority needs to do prior to entering into a Section 173

    A Responsible Authority (RA) must discharge its responsibilities fairly and reasonably. An RA first needs to establish a strategic basis for requesting a Section 173 Agreement. An RA can then seek to include a condition requiring a Section 173 Agreement for the provision of affordable housing on a planning permit.

    The RA should have evidence to support the condition, ensuring that it is defendable at VCAT should the applicant lodge an application for review. In most cases an RA is a local council, and a strategic basis could be made in a Housing Strategy that identifies the relevant housing requirements that need to be addressed within a defined location.

    To ensure development feasibility and fairness, any affordable housing requirement secured through a planning permit condition for a Section 173 Agreement should be identified early and by agreement with the applicant.

    Page last updated: 11/07/21