Twins Lisa and Lauren Garner, 26, are behind a bold suburban development proposal, which would in effect give property owners a pre-approved blueprint to redevelop a block of land into multiple three-storey townhouses.

The pair say Melbourne's development, primarily made up of cookie-cutter apartment blocks in the inner-city suburbs and knock-down rebuilds in suburban areas, are "profit driven and generally of sub-standard quality".

Their ambitious idea has attracted international attention, shortlisted as one of four finalists in an urban sustainability competition run by AECOM, a global engineering and construction firm.

Lauren and Lisa grew up in Eltham, and went on to study architecture in Melbourne and abroad.

"Both deciding to pursue architecture meant, at times, it felt there was not enough space for the two of us in Melbourne," Lauren said.

Lisa now lives in Berlin where she recently finished her studies, while Lauren works at an architecture practice in Prahran.

Inspired by urban design and building collectives in European cities, the pair worked on the project, born out of Lisa's masters thesis, from opposite sides of the world.

"Melbourne is still in the dark ages in its approach to affordable housing," Lisa said. She believes the single detached dwelling, the majority of housing stock, has not met the changing needs of households.

"Considering how much conditions have changed since this model of the suburban house went viral in the 1950s postwar boom, as architecture students, we were constantly asking ourselves, is this really still a relevant model for this context today?"

Rather than depend solely on property developers to boost housing supply, the twins propose that councils and property owners should be able to steer innovative developments.

Under the proposal, local governments and town planning departments would need to consult with businesses and residents to introduce a new type of overlay, a "local development order", to areas near public transport hubs or shopping strips.

This overlay would become a pre-approval of sorts, allowing property owners within that zone to redevelop their plot of land as per the housing model set out in the blue print.

Townhouses would be set over three levels, with most of the ground floor made up of communal spaces and gardens that lead to separate entries. Because the scheme would be modular, adjacent neighbours or organised collectives could also band together to create larger developments.

"This might include neighbours who see the benefit of agglomerating plots, to maximise potential to build more dwellings and thereby, maximise profit on the sale of their land," Lisa said. "This trend is occurring Melbourne-wide already."

The difference would be that, under their proposal, residents could sidestep town planning applications, access a pre-approved design that uses affordable construction materials and avoid relying on multiple highly-skilled contractors, like highrise towers do. These factors would all significantly cut costs, Lisa said.

AECOM's Tim O'Loan said suburbs like Altona, South Kingsville, Sunshine and North Coburg would be ideal locations to develop more "environmentally conscious and socially integrated" housing.

"The outer edge of the 'mid-ring' provide the best breeding grounds or test sites for many of these new types of integrated development," he said.

Ideally, the women hope the state government would provide financial incentives for density, open space and community or commercial facilities. But the developments would be majority self-funded by property owners, or small-scale developers.

The twins admit it could be difficult to win support among local communities. "NIMBYism and resident opposition are the biggest hurdles for building multi-res in the suburbs," Lauren said. "For many existing residents, any change to the status quo is a threat."

She said the proposal was "not suggesting land development should become free-for-all", but attempted to provide a realistic housing solution that had the potential to "put pressure on existing developers to improve their game".

The Garners hope to be able to build a prototype of their model in the future. "Without a precursor, or an image of what else could exist, it's hard to give over any trust," Lauren said.

The winners of the competition, announced in January, will be offered assistance to further develop their project and a $25,000 prize. "Of course if we win, then will go full force ahead in trying to realise this," Lisa said.