The Importance of Institutional Capacity and Negotiation Capacity in Affordable Housing Agreements: The Potential for Collective Action in Melbourne, Australia

New legislation was introduced in 2018 in Victoria, Australia to encourage the negotiation of affordable housing agreements. This change resulted in the expansion of formal and informal mechanisms for cross-sectoral affordable housing delivery. In this paper we draw on 20 interviews with housing stakeholders, focusing on the process of negotiation. We propose a novel theoretical framework to interpret capacity for collective action in a loosely regulated policy area, combining insights from negotiation theory and Institutional Capacity Development (ICD) literature. We find widespread concerns about the opaque, inefficient and potentially exploitative nature of outcomes. We also find that agreements varied across projects based on levels of trust; access to information; political capital; capacity for mutual gain; and the presence of shared rules for interacting. We conclude that competition-based negotiations may lead to increased institutional capacity while also highlighting the challenges of housing delivery in the context of institutional uncertainty.