Council recently approved to relinquish two lots in Wilkie Street so the land could be used for the development of low-cost housing to meet community demand.

The council is proposing to work with the Victorian Government's Office of Housing, who own the remaining share of the property, to undertake an Expression of Interest to appoint a registered housing association to develop and manage the property.

Mayor Christine Henderson said it was a proposal which aimed to see investment in a flexible and affordable housing solution for the shire.

"Council will have input into the criteria for the EOI process and be part of the panel that assesses the applications," Cr Henderson said.

"By seeking expressions of interest in developing this site, we can ensure that the land is used to facilitate the construction of suitable housing options for people seeking housing support in our shire."

Shire director of sustainable communities Carolyn Wallace said while the Office of Housing would deal with the housing associations applying through the EOI process, council hoped to work with a housing association with a "good track record" in the shire.

She said handing over to a housing association was about ensuring the property did not end up in private hands. 

"It's to ensure this remains as a public asset so the land is used as it was intended to be used," she said.

Ms Wallace said access to secure and affordable housing were objectives in council's economic, health and wellbeing strategies. 

She said the issue of housing affordability was topical, especially with some of the recent data to come out of council's housing access and equity policy.

"We know that rental vacancy rates are quite low and the rental market is tight," she said.

She said relinquishing the Wilkie Street lots for the purpose of low-cost housing sought to address some of the issues.

"It's small scale but a really proactive way of developing an asset so that it better meets housing needs," she said.