Sixty-six social housing homes in a Delacombe housing estate, with Leawarra Crescent at its spine, have been marked for redevelopment with 150 new and energy efficient units.

Catholic Care manager and homelessness expert Virginia Louey and Council for Homeless Persons acting chief Kate Colvin said Ballarat had fast become an unaffordable place for people on low-incomes to live.

They said one factor exacerbating the issue was a highly-competitive rental market that was increasingly squeezed with more people leaving Melbourne to live in Ballarat during the pandemic.

"Increasingly we're seeing people who are working and can't afford a rental," Ms Louey said.

"An increase in social housing stock is great but we also know on a personal level to have a secure and stable address can have far more meaning for issue people are experiencing. This might mean the chance to pursue education, this might be an apprenticeship, this might be getting a job.

"Fundamentally housing, and housing stability, is the best opportunity to live a full and rich life on your own terms."

Ms Louey welcomed the government's proposed mix in one, two and three-bedroom units for the estate to better suit a range of family and household make-ups.

She also said the assured seven-star energy focus, while generally more expensive to build, made for cheaper bills and relief amid an increasing number of people presenting to Catholic Care who were struggling to keep up with bills.

The Delcombe redevelopment is the first in regional Victoria under the state government's $5.3 billion Big Housing Build investment

See the area marked for redevelopment below

The social housing boost will include $1.25 billion redevelopment in regional Victoria will at least $80 million spent in Ballarat.

Ms Colvin said there was no doubt Ballarat needed more social housing and while this was a great start there was a lot more work to be done.

Council for Homeless Persons continues to call on the federal government to contribute. Ms Colvin said the Victorian government was doing the "heavy lifting".

"Housing is a really essential part of community infrastructure both in well-being for families and for the local economy [with stability for employment, education and training]," Ms Colvin said.

"Rents are up 30 per cent in Ballarat the past five years...The rental vacancy rate is so low in Ballarat, it makes it very difficult to move around if you need to change housing or for people who need to move to the region to take up employment opportunities.

"It's getting tougher."

Victorian Housing Minister Richard Wynne, in visiting Delacombe on Monday morning, confirmed works would begin early next year.

Minister Wynne said it was important to ensure the community has safe, affordable and secure housing - and the existing properties in Delacombe were "well past their used-by date".

Residents living in Delacombe's existing social housing marked for redevelopment would be relocated during works and offered first option to return to the area.

"People have invested in this area and are housed in this area," Minister Wynne said. "We will house those people in alternative accommodation here and absolutely they have first right of return."

Community consultation is set to begin, including a master plan for the project with existing tenants encouraged to have their say on design. The project also aims to improve streets, public spaces and pedestrian and vehicle connectivity.

IN OTHER NEWS

Wendouree MP Juliana Addison, who is part of the government's social housing consultative committee, said the project would be most welcome to the community's needs.

The state government will work closely with City of Ballarat on the project. City of Ballarat mayor Daniel Moloney said the project was an important boost.

"Any community should be judged on how it looks after those less-fortunate," Cr Moloney said.

"We've got a lot of people here that can sometimes struggle to actually afford to provide a roof over their heads.

"We've got a really tight rental market right now as well and a population boom so all of these things continue to add to the ability to help make housing more affordable and I think that's a great thing".

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