Warrnambool, Moyne and Corangamite councils lobby for a share of $1b regional housing investment

The state government unveiled the housing plan on July 18 as a sweetener for the bitter news it was backing out of its plans to host the 2026 Commonwealth Games.

Premier Daniel Andrews said while the Games wouldn't be going ahead in regional Victoria, country areas would still get the legacy benefits of the event, with major infrastructure projects such as sporting facilities and housing to proceed as planned.

Mr Andrews said a $1 billion housing investment would fund the construction of at least 1300 units across Victoria and the beneficiaries wouldn't be limited to the previously targeted games host areas.

"Locals have told us that more places to live and more places to stay across regional Victoria is what really matters - so that's exactly what we'll deliver," he said.

Minister for Commonwealth Games Legacy Harriet Shing said there was no detail yet on where the housing would go, but it would be allocated according to need after a detailed consultation process.

"Communities are really enthusiastic about the local projects and outcomes they want to see, and we'll be sitting down with councils, regional partnerships and others over the coming weeks to plan the next steps for all of these projects to ensure locals have their say," Ms Shing said.

Warrnambool, Moyne and Corangamite councils all said they would be putting their hand up for a slice of the pie.

Warrnambool mayor Debbie Arnott said the cancellation of the Games was "disappointing and unexpected", but "the support for housing is very welcome" and the council would be lobbying hard for funding.

Moyne Shire chief executive officer Brett Davis said the council had already been leading a region-wide strategy to identify potential housing development opportunities and was in a strong position to get its share of the new money.

"Moyne has done a lot of work in the housing space and has a project ready to go - mainly focused on accommodation for workers, but that could be translated to affordable housing," Mr Davis said.

"Lack of housing is a key issue for businesses trying to attract staff across the region so an increase of affordable housing is going to take big steps towards easing that burden."

The government announced a further $150 million investment on July 19 specifically dedicated to key worker housing, which has been a critical obstacle to many south-west businesses attracting staff from outside the region.

Mr Davis said the success of key worker cabins built in Koroit and Mortlake in the past two years showed the council had the ability to deliver on the investment.

"If we could receive around $2 million in funding from the government, we could have another 10 cabins on the ground ready for workers within 12 months at locations right across the shire," he said.

Corangamite Shire mayor Ruth Gstrein said the council would probably benefit from the Games being cancelled because the funding would be more evenly spread across the state. She said Corangamite wanted to build on the success of its recent housing projects.

"The work we've done in unlocking housing in Simpson and Timboon is really important and the grant money received for that has been great, but it would be fabulous if we could target more areas to keep growing," Cr Gstrein said.

She said the shire was having terrible trouble finding housing for workers. "Cr Beard told me she's just been approached by someone trying to find a rental for a paramedic trying to move to the area."

Cr Gstrein said the region would atrophy if it kept losing people because of the housing shortage.

"It's not just key services, the lack of housing holds back entire communities. Even trying to bring in manufacturing workers to work in the Camperdown production precinct is an enormous challenge," she said.

"So, we will be in there with the government pushing for our community, that's for sure."

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