AFFORDABLE SOCIAL DISABILITY HOUSING | Not-for-Profit Tier-One Community Housing Provider

BlueCHP’s budget comment

BlueCHP congratulates the Federal Government for the housing affordability measures in the 2017 Budget.

Of particular importance to the Community Housing Sector is the government’s plan to introduce the National Housing Finance and Investment Corporation, which will give effect to its Bond Aggregator Model. For those who don’t know the Community Housing Sector currently rely on commercial loans, which are expensive when attempting to build subsidised housing and also very short term, requiring refinancing every 3-5 years.

Under the scheme, States will be encouraged to transfer stock to the Community Housing Sector, which has the capacity to borrow for the redevelopment of existing social housing dwellings and any new supply. Currently, in NSW, the State Government chooses not to borrow, limiting the supply of new housing. With the assistance of the Bond Aggregator, it makes perfect sense to transfer stock, making CHP’s the focal point of existing rent based subsidies, like the existing Commonwealth Rent Assistance, which is not currently available to dwellings managed by the NSW Government.

If Community Housing Providers are to be the focal point in the future, additional assistance is required. The Federal Budget has announced plans to allow Managed Investment Trusts to directly deduct welfare payments as rent, while also increasing the capital gains tax discount to 60 percent for new investments in affordable housing. These initiatives would be complemented if the NSW Government implemented the recent recommendation from the Independent Pricing and Regulatory Tribunal to create an ‘explicit’ rent based subsidy, which would lift social housing rents up to market rates. The Social and Affordable Housing Fund and Hunter Residence Program in NSW, already take an approach where rent is pegged to market rates. Extending this approach would allow for private investment in the supply and retention of dwellings.

Scott Morrison’s focus on affordable housing is timely. AHURI research shows that for many people on low to moderate income, affordable options are extremely limited, a problem that often impacts the most vulnerable, like single parents or the elderly. The NSW Auditor General Report 2013 noted that the latent demand for social housing was approximately 200,000 people who have given up and don’t apply. This issue would have to be factored into future planning, however, to do so, the provision of quality data and clear long-term definition of eligibility would be required. Additional planning about how people move through the housing system is also required. For example, shared equity schemes for people in affordable housing may provide an incentive, by creating a path to home ownership for those in social housing. Transitions between social and affordable housing are currently minimal but would be a crucial part of the new system.

Making Community Housing Providers the focal point in the new system would also allow social services to be well coordinated, especially where policies like the NDIS provide funding on an individual basis. Given its extensive geographic footprint, the Community Housing Sector offers the ideal basis for delivering personalised support to tenants, helping those in need and enabling more effective support being delivered by government.

The Federal Budget is a welcome start but there is more to do to coordinate existing state-based initiatives with recent announcements. The Community Housing Sector exists to help vulnerable people in Australia, the opportunity now exists for this sector to grow, be better financed, and more effective. It certainly is an exciting time to be involved in the Community Housing sector and BlueCHP looks forward to playing its part in helping the government implement its agenda, for the benefit of people in need.