Victoria is in the midst of the most significant transformation of its planning system in a generation. Driven by a genuine housing challenge, the Victorian Government has, over the past several years, introduced a sweeping suite of reforms aimed at increasing housing density, reducing red tape and accelerating approvals. 

The National Trust of Australia (Victoria) supports the need for more homes and a more efficient planning system. However, we are increasingly concerned by the pace of change, the narrowing of community oversight, and the persistent narrative that frames heritage protection as an obstacle to housing supply. 

Claims that Heritage Overlays “lock up land” or prevent development are not supported by evidence. Overlays do not prohibit development, subdivision, extensions or well-designed infill. They ensure change is considered and respectful, retaining what communities value while accommodating growth. We have consistently maintained this position throughout the reform process outlined below.

The Catalyst

The Housing Statement

Victoria’s current reform agenda was initiated in September 2023 with state government’s release of Victoria’s Housing Statement: The Decade Ahead 2024–2034. The statement set a target of 800,000 new homes over ten years and a goal to significantly reform Victoria’s planning system. It also committed to the demolition and redevelopment of 44 high-rise public housing towers.

The Plan for Victoria

Throughout 2024, the Department of Transport and Planning (DTP) undertook consultation on Plan for Victoria, a new 30-year strategic blueprint for how the state should grow. The Plan assigns housing targets to every Victorian municipality and identifies 60 “Activity Centres” as priority locations for new housing growth. 

Finalised in early 2025, Plan for Victoria includes a commitment to protecting sites and precincts of heritage significance. While the National Trust welcomes this recognition, we know that legislative Heritage Overlays alone are not sufficient. Positive incentives to activate and adaptively reuse heritage buildings — alongside clear guidance on how heritage values are integrated into housing initiatives — remain largely absent. 

Importantly, the evidence does not support claims that heritage protections are a primary barrier to housing supply. According to the Heritage Council of Victoria report Why Heritage: A synthesis of evidence for the social, economic and environmental impacts of heritage (2023), less than 10% of Victoria’s building stock is covered by a Heritage Overlay. These controls coexist with significant renewal and increasing density across metropolitan Melbourne.

The Mechanisms

The Train and Tram Zone Activity Centre Program

In 2024, while Plan for Victoria was still being developed, the State Government began engaging with selected councils on a new Activity Centre Program incorporating “walkable catchments” to increase density around key train and tram stations. 

The Train and Tram Zone Activity Centre Program directs approximately 300,000 new homes to 60 locations across Melbourne’s rail and tram network by 2051. 

To implement the program, the Minister for Planning approved three major planning amendments in February 2025 aimed at streamlining development approvals and increasing density through: 

• A new Housing Choice and Transport Zone (HCTZ), which upzones residential land within walking distance of Activity Centres; and 

• A new Built Form Overlay (BFO) over core station areas in Activity Centres. 

The streamlined pathways for approval reduce notice and review requirements for certain residential developments that meet “deemed to comply” provisions, prioritising quantitative standards — such as height and setbacks — over qualitative considerations.

Parliamentary Inquiry

In April 2025, DTP finalised plans for the first 10 pilot Activity Centres, despite several councils passing formal disallowance motions. 

In response to widespread concern that state-level reforms were overriding place-based local planning controls, a Parliamentary Inquiry examined the amendments and tabled a report in May 2025. The report found the reforms had proceeded with limited heritage advice, reduced community consultation rights, and there was insufficient evidence to indicate that they would materially increase housing supply. The Select Committee made 11 recommendations to improve transparency, consultation and environmental safeguards. Motions to revoke the amendments were ultimately defeated.

Further consultation on the Train and Tram Zone Activity Centre Program continued throughout 2025. Two consultation phases on a further 25 centres (Stage 1) concluded in September 2025. The first consultation phase for the next 23 centres (Stage 2) occurred in October and November 2025. Final consultations are set to conclude in March 2026. 

The National Trust has been advised as regards heritage overlays that: 

• The proposed new Activity Centre planning controls do not change existing heritage overlays. 
• When a development application is submitted, heritage considerations, as set out in the Heritage Overlay, remain a key part of the assessment process. 
• In the “core” area (under the new built form overlay), ‘deemed to comply’ provisions will not apply if a property is within or adjacent to a Heritage Overlay. 
• In the “walkable catchment” area (under the new Housing Choice and Transport Zone), if a proposal meets the ‘deemed to comply’ standards and the property in question is under Heritage Overlay, the proposal still must be assessed under the Heritage Overlay requirements. 
•  a ‘deemed to comply’ pathway will still apply even if a proposal meets the deemed to comply standards  
• The development potential of a building in a Heritage Overlay depends on how much it adds to the heritage of the area. 
• The location, size, and layout of the site also play a role. 
• In heritage areas, heritage overlays as well as considerations for housing growth guide decision-makers on what development is appropriate. 

The Great Design Fast Track and the State Design Book

In February 2025, the DTP launched the Great Design Fast Track (GDFT), a program intended to accelerate approvals for development projects demonstrating “great design” across seven principles developed with the Office of the Victorian Government Architect. 

While encouraging design quality is commendable, the GDFT focuses almost exclusively on new construction, with little meaningful reference to adaptive reuse of existing buildings. 

It is well known that retrofitting and upgrading existing buildings preserves embodied carbon, limits construction waste and supports diverse housing options within established communities. Heritage places are not inherently low-quality or unfit for contemporary living. Such generalisations overlook both the sustainable logic of reuse and the many successful housing outcomes delivered through adaptation to date. 

State Design Book 

The GDFT is to be accompanied by the State Design Book, with the first part of this book to contain the GDFT Design Principles and give guidance on how they can be interpreted. The second half of the book will showcase the design of community-nominated buildings. 

In June 2025, the National Trust used the State Design Book nomination process to demonstrate that heritage and housing are natural partners, not adversaries. We nominated a series of Victorian projects showing how thoughtful integration of heritage considerations can deliver high-quality, context-sensitive housing and urban design outcomes that benefit both residents and the broader community. 

We have called on the state government to formally incorporate adaptive reuse into the Great Design Principles and confirm that well-designed heritage adaptation is eligible for the same fast-track pathways and benefits as new construction.

The Framework

Rewriting the Planning and Environment Act 1987

In October 2025, Planning Minister Sonya Kilkenny introduced the Planning Amendment (Better Decisions Made Faster) Bill 2025, the most comprehensive rewrite of the Planning and Environment Act since its inception. 

The revisions include an expansion of the heritage objective to include places of social significance and strengthened enforcement powers, such as higher penalties for illegal demolition. 

The legislation also introduces new tiered pathways for permits and planning scheme amendments: 

• Stream 1 – low complexity, no notification, no third-party appeal rights 
• Stream 2 – medium complexity, notification but no appeal rights 
• Stream 3 – high complexity, full notification and review rights 

The Bill was passed in February 2026, but the changes to the Act will be introduced gradually. The state government has indicated that developing the detailed regulations needed to implement these changes will take two years.

Implementation Phase

This implementation phase will be critical. While the Act establishes the framework for our planning system, it does not yet define which complexity stream will apply to Heritage Overlay permits or amendments. That determination — to be set through regulations now under development — will ultimately decide whether residents and organisations like the National Trust retain meaningful rights to participate in decisions affecting locally significant heritage places. 

Beyond the False Choice

Streamlining planning processes should reduce unnecessary administrative burden — not reduce safeguards, professional oversight or community trust. A one-dimensional approach focused solely on maximising yield risks creating places that are disconnected, short-lived and unsustainable.

The National Trust advocates for a TIMBY approach — Thoughtfully In My Back Yard. TIMBY moves beyond polarised YIMBY and NIMBY debates. It supports housing growth that is well designed, climate-responsive and integrated with existing character. It recognises that adaptive reuse, sensitive infill and quality design can deliver density without erasing identity. 

Victoria can accommodate growth while retaining what makes its cities and towns distinctive. When properly integrated into planning processes, heritage is not a constraint, it is an opportunity.

 What Now?

The National Trust continues to monitor the state government’s roll out of planning reforms and the impacts and opportunities for Victoria’s significant heritage places.

At the time of writing we are focusing our attention on providing input to the current consultation for the Train and Tram Zone Activity Centre Program, and the expected implementation phase of the newly revised Planning and Environment Act.

Feature Image: Credit Krista Purmale on Unsplash