Skip to Content Skip to Content

Manage Urban Change

Victoria’s population and economy have grown quickly, putting pressure on land use and infrastructure. The COVID-19 pandemic temporarily slowed this growth. Population and economic growth should resume in the medium term, and continue to increase over the next 30 years. The Victorian Government can make decisions now that prepare Victoria to better manage growth and avoid the problems of the past.

Fortunately, most of the infrastructure required to meet future needs already exists. If better used, integrated, priced and managed, this existing infrastructure can meet demand faster, more cheaply, more equitably, and with fewer environmental impacts than most new construction projects.

Planning reform and transport infrastructure can affect people’s preferences and choices about where they live. Integrating land use and infrastructure planning can create better urban environments, enhance economic performance, support more inclusive communities and minimise ecological impacts.

Government decision-making alone does not determine the shape of urban environments. Individuals, families and businesses make housing and location choices, considering affordability, safety, amenity, neighbourhood characteristics, and access to education and employment.1 Business needs determine desirable locations, including market access, land costs, worker availability and transport infrastructure.2 Effective government interventions consider and are influenced by these decisions. Victoria’s cities and regions must reflect that people, and their aspirations, are different than in the past and may continue to change. People have different needs, more diverse family structures, cultural heritage, career options, service needs and housing choices. A changing economy and society also alter people’s choices, behaviours and preferences. These characteristics will continue evolving, including from the effects of the COVID-19 pandemic. Land use planning and regulation, together with infrastructure planning and delivery, can affect the location choices of people and businesses. Planning reform and transport infrastructure can affect people’s location preferences and choices, in turn affecting patterns of economic and social activity and movements that affect people’s daily lives. For example, they influence the economy’s productivity, job creation, road congestion, public transport crowding, and the location of new homes and businesses. Integrating land use and infrastructure planning can combine these forces to create better urban environments, deliver superior economic performance, support more inclusive communities, and minimise ecological impacts.

Many established suburbs of Melbourne can accommodate more homes in better locations, with plentiful access to jobs, services, and good transport connections.3 Better integration can draw upon their existing infrastructure. By understanding community needs, and carefully investing in supporting infrastructure and upgrades, these established places can add more homes, and be sustainable and inclusive communities.4 Similarly, Victorians can better use existing infrastructure if demand for it is managed. People can be encouraged to use infrastructure more when it has spare capacity and be rewarded for curtailing unnecessary use when it is under strain. Prices can send strong signals that influence behaviour and help manage demand. This can vastly reduce the need to build new infrastructure and provide better services.5 As Victoria grows and changes, land for building infrastructure will become scarcer and more expensive. It will increase the cost and complexity of infrastructure projects and multi-unit housing developments. The noise and disruption of these projects will affect more residents. Improving the management of existing infrastructure by investing in strong asset management capabilities – the cycle of procurement, construction, maintenance, repair, renewal and disposal – means Victoria can use infrastructure more effectively for longer, and ultimately achieve better value for money.

Insight: Encouraging more homes in established areas can mitigate outwards expansion

Melbourne has only five million people, but is geographically the 29th largest city in the world.6 If planning for major infrastructure sectors is not integrated with clear policy directions for the future location of jobs and housing, the Victorian Government may not meet Plan Melbourne’s aspiration for 70% of new housing to be built in established suburbs by 2051. 

We have undertaken detailed modelling of several scenarios and found that technological changes reduce the need, cost or the inconvenience of travel. This includes scenarios featuring: 

  • More working from home
  • Deployment of automated vehicles
  • Implementing better road management systems. 

These scenarios could encourage more Victorians to move outwards into Melbourne’s new growth areas, and peri-urban and regional locations. By 2051, Melbourne’s metropolitan area could potentially extend from Torquay to Wallan to Warragul. Regional cities face similar pressures for outward expansion. While these changes may increase housing choice and make new growth and regional areas more attractive, continued outward expansion will have social, environmental and economic costs.7 

Infrastructure costs two to four times more in greenfield than established areas to support new housing, and major transport infrastructure connections to new suburbs in Melbourne and regional cities are very expensive. Faster expansion of greenfield areas requires faster delivery of new infrastructure in those places, including for transport, social infrastructure and utilities. For example, faster outward expansion could place pressure on energy infrastructure, especially if people use electric vehicles, and charge them in peak periods. In new suburbs, new residents also move in far more quickly than new jobs are created, and these local jobs do not always match their skills or training. And the land on which new suburbs are built is no longer available for other productive uses like agriculture. While some Victorians may always want to live in new suburbs, our research and modelling show more people may choose to live in existing suburbs when they provide more housing choices with good access to transport, employment, services and recreation. Decisions by governments, including the infrastructure projects they fund and the land use settings they apply, affects the relative attractiveness of these different places. This section of this strategy sets out priority infrastructure policies, reforms and projects to make the most of opportunities in established urban areas.

Website feedback
Back to top