About a decade ago, the regional Victorian town of Beaufort had hit a wall.
A lack of new housing meant the population was stagnating, which left long-time locals with few options and made it hard to attract new residents.
But the local council found housing developers weren't interested in the town of 1,700 located 50 kilometres west of Ballarat, despite it boasting a primary and secondary school, supermarket, cafes, a hospital and a daily train service to Melbourne.
So Pyrenees Shire Council took a bold step — it bought a large tract of land and decided to play the role of developer itself.
One hundred houses later, other regional councils are looking at the Beaufort example as a possible answer to the housing shortage problem affecting towns across Victoria.
Housing solution
The last lots of Pyrenees Shire Council's housing development Correa Park sold last year, after an almost seven-year process and five stages of land releases.
Block sizes range from 700 to 1,100 square metres.
The council took out a loan to purchase land in a residential zone, and went through the planning processes of subdividing, road alignments and utilities connection before selling the lots through a real estate agent.
The process cost $6 million, but the council said that money had been recouped from the land sales.
Council chief executive Jim Nolan said the council stepped in as developer because of "market failure".
"Developers didn't see it as profitable developing in Beaufort when you could develop in a metropolitan area or a large regional city," he said.
Mr Nolan said the community had welcomed Correa Park, including long-time local Maurice Trainor, who was the first resident to move into the estate.
Mr Trainor said the development had brought new families and energy to the town, including children to the preschool and primary school and business for the local shops.
"I can see why families want to move here; smaller lots go for triple the price in Ballarat," he said.
Continued growth
Pyrenees Shire Council is now embarking on its second housing project, after purchasing another parcel of land on Burke Street, within walking distance from the train station.
Councillors have just approved an allocation of $100,000 for preliminary planning work to prepare the site for development, including soil testing, road alignments, utilities, and flood studies.
Mr Nolan said the council's vision was to subdivide the land into 20 to 30 lots between 300 and 700 square metres in size.
This would be smaller than most existing blocks in the town.
Members of the community will be able to provide feedback on the lot sizes.
Mr Nolan said some developers had expressed some interest in smaller-scale investment — the council approved a permit for a five-lot subdivision this week — but not on the large scale needed to significantly boost housing stock.
Setting an example
Rural Councils Victoria featured Pyrenees Shire Council's Beaufort development in its Housing Action Plan released last month.
Chair and councillor Mary-Ann Brown said other rural councils were looking to Beaufort as an example of what was possible.
"Other councils have looked to that and said we need to do that same thing because we are not going to get the large land developers that you see, say, in outer Melbourne," she said.
Rural Councils Victoria projections show there will be a shortfall of 87,000 houses across rural Victoria in the next 15 years.
Ms Brown said the state and federal governments needed to step in to remove barriers to increasing rural housing supply, including providing bridging loans for councils to act as developers.
"You might do a 100-lot development but won't sell all that land in 12 months, so you need to have the funds to be able to carry that until such time that you do," she said.
The Housing Action Plan also identifies a need for the government to improve rural connections to sewerage, water, and energy and address the shortage of planners and builders.
It calls for streamlining of land rezoning and the creation of a specific fund for rural homes.