The Housing Commission of Victoria (HCV) was established by the Victorian Government in 1938 after a public campaign for housing reform led by Methodist layman Oswald Barnett and supported by the Herald newspaper. The founding commissioners (Barnett, Oswald Burt and social worker Frances Penington) had all contributed to the Report of the Housing Investigation and Slum Abolition Board which documented the impact of the 1930s depression on the social and physical fabric of inner-city Melbourne. The Commission's initial brief was to demolish and rebuild 'slum pockets' in the inner city. Displaced residents were moved to new housing developments built by the HCV such as Garden City at Port Melbourne. However, the redevelopment program came to a halt with the onset of war and the Commission turned to planning for the postwar era.
After 1942 the HCV was responsible for developing regional and outer suburban housing estates where low-income families were located in proximity to expanding postwar industries in the northern and western suburbs. The Commission pioneered mass-produced housing through the production of precast concrete sections for houses and flats at its Holmesglen factory. With the assistance of funds provided by the Chifley Australian Labor Party Government through the Commonwealth/ States Housing Agreement, the HCV had constructed around 10% of Victoria's housing by the end of the 1940s In 1956 the HCV built the Olympic Village at Heidelberg West which was later used for public housing. The new town of Doveton in Melbourne's outer east in proximity to the General Motors-Holden factory was another innovative development. These HCV estates were generally well designed and provided affordable housing in the postwar period although residents criticised the lack of infrastructure and community services and the Commission's paternalistic regulation of tenants and owners.
In the 1960s the HCV responded to concern at the declining population in Melbourne's inner city and began an ambitious program of redevelopment, adapting the precast concrete method of construction to build estates with blocks of 20-storey flats. High-rise towers soon ringed the inner city, changing the nature of Melbourne's traditional low-rise urban form and drawing angry resistance from displaced residents and the new gentrifiers, young middle-class families moving into the inner city and restoring terrace houses. Coalitions of activist inner-suburban resident associations, local councils, ethnic groups, conservation organisations and trade unions eventually halted further HCV high-rise developments in the 1970s.
Criticisms of the bureaucratic and undemocratic nature of the Commission and scandals over corruption in relation to housing developments in Melbourne's fringe areas resulted in the disbandment of the HCV and the formation of a Ministry of Housing (1984) which developed more innovative and flexible approaches to the provision of social housing. With the decline of manufacturing industry in Melbourne and the changing nature of households the residents of former HCV estates changed from working families to those largely dependent on social security benefits, with increasing poverty and marginalisation. The search for affordable public housing, which began with the slum-clearance charter of the HCV, is still a challenge for Melbourne.