The 21-lot subdivision would also clear some existing native vegetation and create an access road for the new block on MacGillivray Road on the western fringe of the town.

The addition of 21 new homes would be significant for a population of just over 300 people, although if approved and developed, many of the homes may not be bought by permanent residents.

A large proportion of houses in Peterborough are used either as holiday rentals, Airbnbs, or private holiday houses, with 60 per cent of properties in the town unoccupied on Census night 2021.

Across Moyne Shire the council is looking to do what it can to boost access to housing, worker accommodation in particular.

The proposed subdivision site forms part of a larger block of land owned by Joe and Amanda Gilbert. Mr Gilbert was taken to the Victorian Civil Administrative Tribunal by the council for illegally clearing native vegetation on a separate section of the block in a bid to create an uninterrupted view of Peterborough's Bay of Martyrs.

Ms Gilbert told The Standard at the time that she and her husband hadn't knowingly broken the rules, but the council called their actions "blatant flouting of the rules" and VCAT fined them $20,000 and ordered more than 12 hectares of land be replanted.