An agency working with homeless people in Melbourne has struck a deal with VicRoads to place transportable housing on vacant land in the city's inner west to provide accommodation to people sleeping rough.

Key points: Fifty-seven one-bedroom portable townhouses will be placed on land in Footscray and Maidstone

Fifty-seven one-bedroom portable townhouses will be placed on land in Footscray and Maidstone Businessmen and brothers Brad and Geoff Harris will mostly fund the $5 million project

Businessmen and brothers Brad and Geoff Harris will mostly fund the $5 million project Houses will be built on vacant land reserved for the widening of Ballarat Road

Not-for-profit agency Launch Housing said it would place 57 one-bedroom townhouses on nine parcels of land in Footscray and Maidstone.

The agency's deputy chief executive officer, Heather Holst, said the dwellings could be transported elsewhere when VicRoads needed the land back.

"It's something that we have thought: 'Let's demonstrate this, pilot it, see how it works and then potentially it can come into a funding stream," she said.

Ms Holst said using transportable housing on government-owned land would be cost-effective and practical.

The $5 million project would be mostly funded by a $4 million donation from businessmen and brothers Brad and Geoff Harris.

Launch Housing will borrow the remaining money.

The land is reserved for the widening of Ballarat Road, but that is unlikely to happen for several years.

VicRoads will lease the land to Victoria's Department of Health and Human Services for five years at a nominal fee.

The department will then sub-lease the land to Launch Housing.

If VicRoads needs the land back, it will provide a 12-month vacancy notice.

An artist's impression of the housing which will be fully plumbed and have a garden. ( Schored )

Portable housing will 'look fantastic'

Ms Holst said the project would make use of land which is effectively sitting idle and while the housing will be mobile, it will still "look fantastic".

"They are transportable but they won't look like mobile housing," she said.

"They are fully plumbed, they are on footings, they'll have a little garden, each one with a little fence around it."

The homes are being constructed in a factory in Footscray.

An area of empty land on Ballarat Road in Maidstone that will be used to place portable homes. ( Schored )

Ms Holst hopes to have the first dwellings occupied by the middle of the year, and all 57 filled by the end of the year.

If the partnership with VicRoads goes well, she hopes other government departments could also make vacant land available.

Brad Harris said he and his father had identified homelessness as one of the biggest issues in Melbourne.

He said Launch Housing's strategy would make a significant improvement to Melbourne's homelessness crisis.

"I guess the exciting thing is that they are value properties," he said.

"[Each dwelling] is only about $80,000 each, fully installed, and they only take a day to build each property, so the scalability is huge.

"If these 57 homes are installed and everything goes according to plan in this trial, there really is an opportunity to up-scale it."

Mr Harris said he hoped this project would encourage more private sector donors to focus on tackling homelessness.

Minister for Housing Jenny Mikakos said a growing number of homeless people in the state was a serious concern.

"Every Victorian deserves to have a roof over their head," she said in a statement.

"Homelessness is a confronting and complex issue. We are currently experiencing unprecedented demand and a first-of-its-kind project like this will help adults and families have a place to call home."