Decades in the Making: The Rise and Fall of Melbourne’s Public Housing Towers

In today’s post, Cordelia Attenborough and Elroy Dearn from RMIT University give insight into the history of public housing in Victoria. This blog is written in the context of the Victorian Government’s proposal to demolish 44 public housing towers.

Source: Dearn 2025

As the final day of hearings for the Inquiry into the redevelopment of Melbourne’s public housing towers drew to a close last month, one thing is abundantly clear: the state’s public housing system is on life support, and people less than thrilled about the government’s proposed cure.

A policy context:

In 2023, the Andrews Labor government released Victoria’s Housing Statement: The Decade Ahead 2024–2034. Buried among the talk of market housing and the ‘Big Build’ were a few perfunctory pages on public housing and a single line announcing the “retirement” aka demolition of all 44 high rise public housing towers. Once bulldozed, a mix of ‘affordable’ and ‘community housing’ would be built on the new sites, with only one site remaining 100 per cent public housing.

All this upheaval, we are told, is to deliver only a 10 per cent increase of social housing on these sites. This is at a time where social housing makes up only 3 per cent of the state housing stock (the lowest rate in the entire country and behind the OECD average of 7%), and a time when many suggest a 100 per cent uplift on the sites alone and a 10 per cent overall increase of all social housing across the state is needed to meet increasing demand.

So how did we get here? Before the wrecking ball swings, it’s worth remembering where these towers came from - both as a reminder of what was, and what can be. 

1940’s-60’s: The real ‘Big Build’

Public housing’s roots in this country stretch back to 1943 when the federal Labor government established the Commonwealth Housing Commission to examine Australia’s housing crisis.

In 1944, the Commission recommended building 80,000 dwellings a year and bluntly declared that, “Private enterprise, the world over, has not adequately and hygienically been housing the low-income group” (p. 11, Hayward, 1996).

Labor followed through in 1945 with the Commonwealth State Housing Agreement (CSHA), offering states cheap loans to build and maintain public housing. Homes would go to low-income tenants and returned servicemen, but notably without strict means testing. In 1949, the Menzies Coalition government kept the CSHA alive, albeit with a more conservative bent.

 By 1966, public housing made up 6 per cent of the housing stock in Victoria, from 1 per cent in 1947 – a 500 per cent increase (Hayward, 1996).

The towers were part of this record construction. Modest but functional, their modern architecture reflected the utopian ideals of the era. These weren’t just homes; they were a vision of social unity and equity.

1970s–1990s: The great ideological pivot

As the decades rolled on, economic rationalism reared its ugly head, farewelling the Keynesian idealism of the 1950s and ’60s. From Thatcher’s Britain to Reagan’s America, the gospel of privatisation, marketisation, and small government drifted across the Pacific.

By the late-1970s, the CSHA was in the firing line, lambasted as too expensive, too generous and too easily “rorted” by tenants. Economic recession, inflation, and rising wages mingled with this ideological shift.

Despite changing attitudes, governments still managed to increase public housing stock by 100,000 dwellings between 1981 and 1996, a 43 per cent increase, outpacing the total national housing growth rate of 34 per cent (Groenhart & Burke, 2014).

Across the country, public housing rose from 4.9 per cent of the total dwelling stock in 1981 to 5.2 per cent in 1996 (Groenhart & Burke, 2014).

This would be the last time the numbers went up.

1990s–Now: The (managed) decline

By the mid- to late-1990s, public housing had been thoroughly recast as “welfare” rather than a public good as governments quietly lowered their responsibilities for housing.  By 1998, Commonwealth Rent Assistance outspent direct public housing investment for the first time, marking the final ideological break (Groenhart & Burke, 2014).

From 1996 to 2011, the number of public rental dwellings fell by 12,000, shrinking to a meagre 4.1 per cent of the national housing stock (Groenhart & Burke, 2014). Even adding in the 51,000 dwellings built under the newly recorded “community housing” category, social housing overall still slipped to 4.8 per cent, well below the 5.2 per cent peak of 1996 (Groenhart & Burke, 2014).

What the world needs now (homes, sweet homes):

So how is it that in an era of greater economic prosperity (for some), and greater need (for many), governments can manage so little? The answer lies in a political ideology that has steadily downgraded public housing from public good to potential revenue stream, an afterthought in a market-obsessed policy landscape.

There is no debate that much of the housing stock is ageing and poorly maintained.

However, demolition is not the only answer, especially as rationale and cost modeling has not been made public. Submissions from the architects at OFFICE and the Retrofit Lab insist demolition is far more expensive than retrofitting, both in cost and carbon emissions.

Moreover, the forced displacement of residents violates their human rights, disproportionately impacting people with disability and people from migrant and refugee backgrounds.

A 10 per cent increase is not enough to meet the increasing demand. There are 55,553 new applicants on the Victorian Housing Register, waiting an average of 19.8 months for housing  and a further 146,100 Victorian households currently living in housing stress - estimated to hit 332,100 households by 2051.

So now we know how we got here we must ask, what can we do to get out?

Simply put, we need visionary policy that commits to significantly raising public housing stock. A target that brings us in line with the OECD average is not only possible, but essential to meet the rising demands. If it could be done in 1949, it can be done now.

About the authors:

Cordelia Attenborough is a Master of Social Work student at RMIT university on a research placement at the Social Equity Research Centre.

Dr Elroy Dearn is a research fellow at RMIT University.

Referenced cited

Hayward, D. (1996). The reluctant landlords? A history of public housing in Australia. Urban Policy and Research, 14(1), 5-35. https://doi.org/10.1080/08111149608551610

Groenhart, L., & Burke, T. (2014). What has happened to Australia’s public housing?: Thirty years of policy and outcomes, 1981 to 2011. The Australian Journal of Social Issues, 49(2), 127-149. https://doi.org/10.1002/j.1839-4655.2014.tb00305.x

Blog moderator:

Dr Elroy Dearn