Housing groups say the land should be used for its intended purpose of housing low-income residents amid skyrocketing property prices in Melbourne.

The site in Preston has been untouched for at least four years, despite recent proposals to redevelop the property to include private and social housing.

Tender documents were released in 2011 to redevelop the large Huttonham Estate but those plans stalled and were not carried out.

The Community Housing Federation of Victoria has applied to redevelop the site with a mix of social and private housing at no cost to the government.

It is waiting to hear back from the government about its plan, which is part of a broader package.

The federation's executive officer Lesley Dredge said the plans for the property included 92 social housing dwellings and 192 private dwellings.

"A number of community housing providers have looked at that site and realised it's perfectly located for social housing and have come up with plans of how to redevelop that site at no cost to the government," she said.

The tender documents show the estate previously included 84 public housing properties and the redevelopment was to deliver 86 new dwellings.

The proposed redevelopment was to include 25 new public housing dwellings "peppered throughout the estate" with the remainder to be private housing sold on the open market.

Demand for public housing has since soared with Victoria's latest figures showing the waiting list hit 34,464 in the June quarter of this year. Victoria's southern division, which stretches from bayside Melbourne to outer Gippsland, had the biggest waiting list.

The Victorian Public Tenants Association wants "greater innovation and imagination" to fight the growing public housing waiting list.

It said the Victorian government held "large tracts" of vacant land, including the Huttonham Estate.

The association's executive officer Mark Feenane​ called for an audit of vacant land as a "starting point".

"Doing nothing is not an option, the waiting list will just get longer," he said.

Housing Minister Martin Foley said the previous government had "botched" the tender process leaving the site "abandoned for too long."

However, he gave little detail about the government's plans for the property.

"We will grow the total amount of social housing on this site and work to progress this project as quickly as possible," he said. "We hope to have further announcements shortly."

Opposition Housing Minister Tim Bull said the Coalition had reduced the public housing waiting list and had a capital works program that would have continued the downward trend.

"Daniel Andrews has been heavy on talk and short on action since coming to government," he said. "It is about time they got on with these redevelopments before the public housing waiting list blows out again under their watch."

Tenants Union of Victoria chief executive Mark O'Brien said the site should have been redeveloped a long time ago.

"I think what's happened on that estate is a disgrace," he said. "Governments have been incapable of doing anything substantial on that estate."