Australia has a significant and growing crisis in social and affordable housing after decades of under-investment by federal and state governments.

In 2018, the Australian Bureau of statistics estimated that there were 116,000 homeless people in Australia at any given time spread over our cities, suburbs and regional areas. Women over 55 years of age were the fastest growing cohort. Of the growing homeless people, 17% comprised children under 12 years of age and 10% comprised teenagers between 12 and 18 years of age.

The statistics also paint a bleak picture in terms of social and affordable housing and the chronic shortage in supply. In 2019:

  • an Anglicare survey found that fewer than 1% of properties in Greater Sydney and the Illawarra were affordable for singles and families on low incomes. The report noted that NSW would need 200,000 more affordable homes by 2025; and
  • a UNSW City Futures Research Centre report claimed that there would be a need for 650,000 affordable or social housing homes in Australia nationally over the next 15 years.

As at October 2020, there were approximately 430,000 people on waiting lists for public housing and thousands more on NDIS plans. The shortfall in social housing is estimated to be around 450,000 dwellings.

In this article, we examine how is Australia responding to the crisis at a government and private sector level and consider some of the challenges, both legal and economic, to potential solutions.

Social housing versus affordable housing

What is the difference between social housing and affordable housing?

Social housing is secure and affordable rental housing for people on low incomes with housing needs. It includes public, community and Aboriginal housing.

Affordable housing is housing that is appropriate for the needs of a range of very low to moderate income households and priced so that those households are also able to meet other basic living costs such as food, clothing, transport, medical care and education.

Federal Government initiatives

As recently as October 2020, the Federal Government has stated that it sees public housing as a state responsibility and has rejected calls to fund large-scale social housing projects. Notwithstanding this position, the Federal Government has provided some significant assistance to the social and affordable housing sector as set out below.

National Housing Finance and Investment Corporation

In its 2017 Budget, the Federal Treasurer outlined plans to lower the cost of providing social housing by establishing a National Housing Finance and Investment Corporation (“NHFIC”) to operate as a housing bond aggregator for the sector. NHFIC effectively operates as an intermediary raising funds from the Australian debt capital markets by issuing bonds and then lending that money to community housing providers (“CHPs”). The objective in establishing a funds pooling aggregator was to enable CHPs access to long term, lower cost finance. The establishment of NHFIC follows the example of the UK’s Housing Finance Corporation, an equivalent body established in 1987, which as at 2016 had provided some GBP19 billion in capital markets finance and private placement facilities to the social and affordable housing sector in the UK.

NHFIC was established in 2018 and launched its initial $315 million bond issuance in March 2019 which was four times oversubscribed. Subscribers for the government-guaranteed 10-year bonds included Cbus Super, UniSuper, Blackrock Investment Management, AIA Australia, QIC, Byron Shire Council, Challenger Life Company, NSW Treasury Corporation, QBE Insurance Group, Shinhan Bank and UBS. The bonds were priced 48 basis points above government bond yields. The community housing providers which benefitted from this issuance included CHL, Compass, Evolve, Hume and Unity, each of whom was able to borrow from NHFIC at between 150 and 200 basis points below their borrowing costs at that time.

Subsequently, NHFIC has made two further issuance each of which was also oversubscribed and has used those funds to lend:

  • $86 million which included its first construction loan of $45.7 million to BlueCHP to build 93 affordable homes in Lane Cove and Liverpool in the greater Sydney area. Upon completion of the homes being constructed by BlueCHP, NHFIC will provide BlueCHP with of $6 million to allow it to retain 48 affordable homes and 24 homes for social housing;
  • a second loan of $40 million to Bridge Housing to fund 300 social and affordable homes already under construction in Sydney; and
  • $15 million to St Georges Community Housing Group (“SGCH”)(one of Australia’s largest CHPs with a portfolio of 6,300 homes) and $7 million to Uniting SA (a South Australian based CHP with a portfolio of 382 properties).

In its 2020 Budget, the Federal Government allocated another $1 billion to NHFIC taking its total funding commitment to NHFIC (and the community housing sector) to $1.5 billion and $150 million for new homes for Indigenous families in regional areas.

Interestingly, some investors see scope for social and affordable housing bonds to become a distinct class of sustainable asset.

Having established NHFIC to assist with lower cost finance to the sector, the Federal Government has said that it also sees the private sector as having to now step up to fund the affordable housing sector’s equity requirements. Commentators note, however, that whilst lowering the cost of debt finance for CHPs through NHFIC funding, the lower cost loans offered by NHFIC still do not bridge the shortfall in revenue that arises as a result of leasing out homes at below market rental rates and that some form of subsidy is still required from government.

Clean Energy Finance Corporation

Since its establishment in 2012, Clean Energy Finance Corporation (“CEFC”) has provided financial support to the development of energy-efficient affordable housing. This has included:

  • $170 million (aggregate) loan to SGCH to fund energy efficient homes in Sydney’s outer suburbs of Canterbury-Bankstown, Georges River, Liverpool, Fairfield, Cumberland and Paramatta;
  • funding of clean energy initiatives at commercially developed homes by Mirvac at housing estates in Sydney and Brisbane;
  • a cornerstone investment of $150 million in a new $1 billion green infrastructure funds to invest in assets such as data centres, hospitals and seniors’ living; and
  • a $95 million loan to Housing Plus (a NSW based regional CHP) to fund the development of 220 homes in Bathurst, Dubbo and Orange to be built to 7-Star National Housing Energy Rating System (NatHERS) standard and to retrofit existing properties in its portfolio with rooftop solar and energy efficient technology.

These loans are part of CEFC’s Sustainable Cities Investment Program which invests in clean energy initiatives in Australian cities.

State government social and affordable housing initiatives

New South Wales 

 

The most significant recent developments have centred around the establishment by the NSW Government of the $1.1 billion Social and Affordable Housing Fund (“SAHF”) in 2015. SAHF is one of Australia’s biggest social housing construction programmes aiming to deliver 27,000 social and affordable homes over 10 years. Most of the homes are to be built on land owned or acquired by non-governmental organisations. The SAHF is a key initiative under the Future Directions for Housing in NSW Strategy which sets out the NSW government’s 10-year vision for social housing.

This followed the earlier establishment by the NSW Government of its Communities Plus programme, the subsequent establishment of the Community Housing Innovation Fund (a government grant programme set up in 2018 with a 3-year time frame targeting 150 new social and affordable dwellings) and the appointment in 2017 of a consortium comprising Mission Australia Housing, Frasers Property Australia and Citta Property Group to redevelop the 8.2 hectare Ivanhoe social housing estate in Macquarie Park in Sydney’s north (as part of the Communities Plus programme). The NSW Government has also transferred the management of some 14,000 social housing dwellings to CHPs in the period 2011 – 2017.

There have been two phases of roll out undertaken by SAHF to date as follows:

  • in the first phase launched in 2017, SAHF selected 5 CHPs to deliver 2,200 homes across NSW – the successful CHPs were BaptistCare, Compass Housing Services Co, SGCH Sustainability Limited, St Vincent De Paul and Uniting. The target group for this phase was single parent families with a focus on women affected by domestic violence; and
  • in the second phase launched in 2019, SAHF selected another four CHPs to build a further 1,000 homes.  Those selected were Anglicare (500 homes), Housing Plus (220 homes), SGCH Portfolio Limited (260 homes) and Uniting (300 homes).  This phase is targeted at older residents  with homes being built together with services that support them (such as medical services).

The SAHF procures accommodation as a service rather than the government purchasing and owning properties to provide accommodation.  The SAHF has been particularly successful in unlocking large land banks held by churches, other charitable organisations and CHPs.  It has been less successful in attracting private finance into the sector as the services model adopted by SAHF has thrown up a number of challenges for private sector financiers (such as banks). 

One of the bigger challenges has been finding a way to deal with residual land value risk which is not a risk which sits with the sponsors/SPV in a traditional PPP structure. One way of mitigating this risk is for a consortium member (such as a charitable organisation or CHP) to take that risk at the end of the concession so that financiers know that they have an “exit” mechanism available to them at the end of the concession life and do not have to take a view on residual land value risk.  Other challenges include managing extended force majeure risk which impacts the delivery programme, substitution of properties where there is an extended build programme, the mitigation of risk in respect of the cessation of Commonwealth government rental assistance for low income earners and the lack of any protection for financiers in a default situation (i.e. SAHF will not provide any “floor” for recovery of debt by financiers).

The City of Sydney has also sold a number of properties to CHPs at a significant discount to market value for social housing development including sites in Alexandria and Redfern and the former Royal South Sydney Hospital site in Green Square.  These sales have been accompanied by a caveat on the land title to ensure that the land is used in perpetuity for social and affordable housing.

Victoria

The most significant recent development has been the announcement by Premier Daniel Andrews in November 2020 of a $5.3 billion programme to build 12,000 public and community housing homes over the next 4 years.  In connection with that announcement, the Victorian Government has established Housing Victoria, as the agency responsible for the delivery of the programme. The new agency aims to develop a 10-year strategy that extends beyond the initial 4-year big housing build project. Housing Victoria has been mandated by the government to be an assertive agency that structurally overhauls the approach to affordable housing. It proposes to engage with both the private sector and superannuation funds to use its existing $27 billion social housing asset base and investment potential to drive affordable housing.

Currently, a number of consortia are competing in a Housing Victoria tender worth up to $400 million that will allow commercial build-to-rent housing to be built alongside social housing on public land – the consortia are Plenary Group (with Kane Constructions, build-to-rent operator Assemble, DKO, McBride Ryan and Mission Australia Housing), Cappella Capital (with Watpac and housing provider HCL) and Tetris Capital (with Qualitas, Citta Property Group and housing provider CHL). The tender seeks proposals for the redevelopment of housing on three existing public housing estates in Flemington, Prahran and Brighton.  As at the date of this article, the outcome of the tender is unknown. The tender follows an earlier deal announced in March 2019 with developer MAB and housing provider HousingFirst to redevelop three estates in North Melbourne, Northcote and Preston. 

Under the current tender, the Victorian Government will retain ownership of the land and lease it to the successful consortium under a ground lease – so at the end of the concession, ownership of the land will remain with the state. Removing the purchase cost of the land should make commercial “build-to-rent” more viable even when rental yields are low.  The term of the ground lease is not yet known but the expectation is that it would be similar to a transport infrastructure concession (i.e. around 25 years). Commentators note that the successful consortium will have to develop the capacity to manage the commercial long-term rental housing units, a skill not yet common in Australia.

South Australia

In December 2019, the SA Government announced a $550 million plan to continue to support housing needs in South Australia.   In terms of key initiatives, the SA Government has committed to invest more than $452 million into new social and affordable housing supply, $75 million to start addressing the public housing capital maintenance backlog to 2030 and to improve sustainability and energy efficiency of public housing, where appropriate and possible and $20 million to support innovative housing trials where there are clear gaps in the system, with the aim of generating further investment through partnerships and to reduce the reliance on emergency accommodation for people in need.

Our Housing Future 2020-2030 is the 10-year plan released by the SA Government to address a better housing future for South Australia.  The strategy sets out the actions required from all partners in the housing sector, including government and non-government, to cooperate to contribute to meeting the level of need highlighted in the findings of the Australian Housing and Urban Research Institute (AHURI) report.  The actions include an increase in the supply of affordable housing (with 20,000 affordable housing outcomes over 10 years) and a range of actions to improve housing pathways and modernise the social housing system and to help existing social housing tenants on moderate incomes to access other housing options (including affordable home ownership) where possible.  Innovative partnerships with the private and not-for-profit sectors are expected to result in a further $220 million construction investment as part of Community Housing Asset and Investment Plans, which are planned to result in more than 1000 homes, of which 720 are forecast to be retained as social and affordable housing. Further, a government-funded $400,000 affordable community housing land tax exemption pilot will offer 100 supported opportunities in the private rental market over five years for eligible social housing customers. The government has also committed an additional $5 million to the Affordable Housing Fund over five years from 2021/22.

The SA Housing Authority manages delivery of the 15% Affordable Housing Policy on behalf of the SA Government – this includes facilitating partnerships between private industry and CHPs to deliver commercially successful developments that include affordable housing.  Renewal SA, the SA Government’s leading urban development agency, also plays a role in the development of affordable housing in that State.

Western Australian

 

In 2018, the State Budget included $184 million in provisions for the Metronet Social and Affordable Housing and Jobs Package – a major investment in housing, linked directly with the Metronet transport project, to help build liveable and connected communities. The objective was to leverage the existing investment in Metronet by integrating quality affordable housing and community facilities with transport hubs. In partnership with the private sector, the package will use four different work streams to develop eight high-density mixed-tenure projects, create unique compact urban communities on strategic sites close to Metronet stations and develop and redevelop smaller scale sites within 800m of new Metronet or existing heritage line stations.  

In October 2020, the WA Government launched The WA Housing Strategy 2020-2030 (“WA Housing Strategy”) with the aim of connecting 150,000 households to safe, stable and sustainable homes by 2030.  The strategy calls for greater cooperation between different sectors to improve housing choices and access to suitable and affordable homes, particularly for the most vulnerable. The strategy builds on the foundations of the Affordable Housing Strategy 2010-20: Opening Doors to Affordable Housing and the Affordable Housing Action Plan 2017-20 and was also guided by the Ageing with Choice five-year plan to support older Western Australians.  Pursuant to the strategy, three plans are being developed at the moment namely an affordable housing implementation plan, a social housing framework and a regional and remote housing implementation plan.

The WA Housing Strategy commits to a 6% net increase in social homes over the next 10 years (2,600 homes), diversifying the rental sector, continuing to responsibly support home ownership opportunities for people on low to moderate incomes, improving the availability of liveable designed housing, building liveable, inclusive and connected communities that improve social and economic participation, improving outcomes through a more integrated approach to housing and service assistance and creating jobs and contributing to the State’s economy.  The strategy was kicked off by the $444 million Housing Stimulus Package announced in June 2020 which included the  $319 million Social Housing Economic Recovery package (which will refurbish 1,500 homes, build and purchase about 250 new dwellings and deliver a regional maintenance program to 3,800 homes).

Notwithstanding these initiatives, the WA Government has been subject to recent criticism over its lack of action on social housing issues.  The CEO of Shelter WA has also commented that the WA Housing Strategy’s target of a 6% per cent increase of social housing over the next ten years will only deliver around 260 new social homes each year which is insufficient to address the sector’s needs. 

Queensland

In 2017, the Queensland Government released the Queensland Housing Strategy 2017-2027 which is a 10-year framework driving reforms and targeted investment across the housing continuum.  Pursuant to The Housing Construction Jobs Programme (a key part of the Housing Strategy), the Queensland Government has committed to investing $1.6 billion to deliver more social and affordable housing over the 10-year period covered by the Housing Strategy.

As at July 2020, contracts had been awarded by the government for the commencement of 1,949 new social homes.  The government is also partnering with the community housing sector to increase the supply of community and affordable housing in Queensland, through modern program investment and funding arrangements. To date, 923 new social and affordable dwellings have been approved, supported by over $75 million of government investment.

Interestingly, the Queensland Government is also supporting initiatives in the “build-to-rent” sector as a partial solution to affordable housing supply.  The Queensland Government is currently running a pilot project which will provide a targeted rental subsidy to deliver affordable and market rental housing within “build-to-rent” developments in Brisbane.  The pilot project will initially target delivery of developments on privately owned land at the cost and risk of the successful proponent. Two projects have been approved to date - one by Frasers Property in Fortitude Valley and the other by Mirvac in Newstead - and in each case, the land is owned by the developer rather than the State. These projects together will deliver 750 apartments with up to 240 affordable dwellings to be provided at a discounted rental rate (i.e. there will be a government rental subsidy). 

In addition, there are two new EOI processes currently underway by the Queensland Government:

  • the first is for the proponent to deliver a “build-to-rent” development with an affordable housing component on a State-owned site of the former Children’s’ Court in Brisbane and maintain that development thereafter (submissions were due by 9 April 2021); and
  • the second is for the proponent to deliver a “build-to-rent” development with an affordable housing component on a privately-owned Brisbane site and maintain that development thereafter (submissions are due by 7 May 2021).

Tasmania

The Department of Communities in Tasmania is responsible for administering a number of programmes and agencies including:

  • a Supported Accommodation Programme;
  • an Affordable Housing Strategy;
  • a Community Housing program (provided through CHPs);
  • the Housing Connect service;
  • the HomeShare and Streets Ahead programs (which provide assistance to low or moderate income earners to purchase a home); and
  • Housing Tasmania (which provides housing assistance for Tasmanians with low incomes and special needs).

Tasmania's Affordable Housing Strategy 2015-2025 was developed to improve affordable housing.  It provides direction and a framework for action and investment over its 10-year timeframe. Specific actions and initiatives were set out in the Affordable Housing Action Plan 2015 – 2019 (Action Plan 1) and the second stage the Affordable Housing Action Plan 2019- 2023 (Action Plan 2). A third action plan is to be developed for the final years of the Strategy. 

Action Plan 1, released under the Strategy, was supported with an investment of $73.5 million to deliver new supply of affordable housing and assistance. This plan was due for completion in June 2019 and was on track to assist 1600 households, including new supply of 941 affordable lots and homes.  In developing Action Plan 2, stakeholders agreed that whilst market conditions had changed significantly, the broad three key drivers of the Strategy remain relevant.  The second stage of the Strategy had a commitment of an additional $125 million over five years, taking the total investment in affordable housing to nearly $200 million over 8 years.  This would result in a total of 3600 households assisted under both Action Plans, including the new supply of 2400 affordable lots and homes.

Northern Territory

The Northern Territory (“NT”) has 12 times the national average of homelessness - 6% of all people in the NT are homeless and 16.5% of Territorians under the age of 18 are homeless.

The NT Government operates a number of housing schemes including the following:

  • Affordable Housing Scheme: Persons who work in one of the NT’s key service industries and are seeking housing to rent may be eligible to apply to rent an Affordable Housing Scheme dwelling. Under that scheme, the NT Government head leases dwellings from the private sector to provide more affordable housing options around the NT - these are then subleased to eligible low to middle income earning tenants.
  • Low Income Public Housing: Persons on low incomes can apply for public housing - public housing comprises units and houses owned and managed by the government.  The waitlist for public housing is lengthy and can be as long as 6-8 years.

The NT Government has also committed to improve housing in remote communities with its Our Community. Our Future. Our Homes Remote Housing Investment Package of $1.1 billion to be provided over the period 2016/2017 – 2026/2027.  This package is focused on local decision making, engagement and planning with communities to identify their housing needs – it has a particular focus on ensuring residents have input into what housing looks like in their local community and that work is carried out in a manner which supports sustainable local employment and training and helps develop Aboriginal businesses and economic development. Funded is provided through 4 programs including $500 million over 10 years for the construction of new public housing; $200 million over 10 years to increase living space in existing homes; $200 million over 10 years for repairs and maintenance and $200 million over 10 years to expand Government Employee Housing to include locally recruited NT Government employees in remote areas.

Australian Capital Territory

The ACT Housing Strategy published in 2018 by the ACT Government provides a roadmap for housing in the ACT over the 10 years to 2028.  The strategy builds on the 2007 Affordable Housing Action Plan, what the ACT Government learnt  through its conversation with the ACT community in 2017 (including the Housing and Homelessness Summit), an analysis of the issues by housing industry and community leaders, and research and analysis relevant to the housing sector.

The city of Canberra faces a number of challenges – it is growing towards 500,000 residents by 2030, putting pressure on land availability, infrastructure and public open space. Based on this growth projection, an estimated 3000 new homes will be required each year at a time when the city’s urban footprint becomes more constrained. In addition, high wages and low unemployment have put pressure on the existing housing stock. Low income households have been crowded out of the private housing market and the demand for social housing and homelessness support is increasing.

Of particular note in regard to the Strategy are:

  • the ACT Government’s commitment to dedicating 15% of its annual Indicative Land Release Program (an indicative 2,550 dwellings) to growing the supply of public, community and affordable home purchase homes. This also includes the setting of an annual community housing target to provide additional affordable rental properties managed by registered CHPs.  Equally, it will look to increase the supply of affordable and social housing on privately leased land through incentives and, where appropriate, by use of planning controls.;
  • a focus on the role of the private sector in supplying affordable rental properties. The Strategy considers possible financial and planning incentives and plans to release a site for private investment specifically in affordable rental accommodation; and
  • whilst a shared equity program is run for public housing tenants through Housing ACT, shared equity is not available within the affordable housing market. The Strategy proposes piloting a shared equity initiative in partnership with a CHP and investigating the feasibility of, and a possible program design for implementing, a broader ranging shared equity (or “rent-to-buy”) scheme in the ACT.

Superannuation investment

Superannuation funds are interested in the social and affordable sector with a particular focus to date on providing affordable housing to key workers. The most significant challenge for these funds is to find an investment model which generates adequate returns given that superannuation funds must invest with a dominant purpose of generating returns for members.

In terms of developments to date (based on publicly available information):

  • in 2016, Health Employees Superannuation Trust Australia (HESTA) made a significant investment, through its Social Impact Investment Trust (managed by Social Ventures Australia), in Horizon Housing, a Queensland based CHP. Under its initial $6.7 million investment, HESTA’s trust partnered with Horizon Housing to finance the purchase of management rights for 995 existing affordable housing properties and the development of up to 60 new social and affordable homes;
  • late in 2019, First State Super (a $100 billion fund with its origins in the NSW public service which has now merged with VicSuper) announced that it would launch its first Melbourne based affordable housing project for key workers. It acquired 105 units in the Focus on Mason development in Monee Ponds, 55 of which will be set aside for people in healthcare, education and emergency services. This follows First State’s investments in key worker affordable housing in NSW. The properties are marketed to key workers at 80% of market rental. Returns come from both the rental stream and the potential capital growth in the value of the units;
  • in June 2020, AustralianSuper announced that it had taken a 25% stake in affordable housing developer Assemble Communities, a scalable housing platform, with the intention of investing substantially in that company’s pipeline of homes. Assemble builds homes which it rents to occupants for 5 years after which they have the option to buy at a price fixed today – this is a variant of the “build-to-rent” model and is referred to as “build-to-rent-to-sell” model. AustralianSuper already invests in the build-to-rent sector in the US but has opted to support Assemble’s “build-to-rent-to-sell” model over the “build-to-rent” model. According to AustralianSuper, the provision of essential workers’ housing or affordable housing was another key factor which drove its decision to invest in the sector though the Assemble model rather than the more commercially oriented “build-to-rent” model. Whilst currently focused on the Victorian market, Australian Super has stated that it regards the investment model as capable of being rolled out in other states;
  • in August 2020, Cbus committed to invest $10 million in a NSW pilot scheme that puts industry superannuation funds into the funding of social housing development for the first time. The initial project will provide funding to industry participants to deliver 96 new dwellings across 6 sites. Cbus was reported to be considering a second tranche of up to 300 dwellings and has said that its lending to the sector could top $100 million within 3 years. The scheme is an agreement between Cbus and the NSW and Commonwealth governments which could potentially be extended to other states. Under this model, housing providers can access a debt funding package with 75% being provided by NHFIC and 25% being provided by Cbus. Interestingly, ownership of the land will be retained by Land and Housing Corporation (a NSW government agency) who will lease that land to the state (under a 49 year lease) which in turn will make the land available to the successful providers of the homes – this lowers the overall cost for the housing provider and enhances their ability to service the debt; and
  • in February 2021, Aware Super announced that it plans to invest heavily in spending on key-worker housing which will boost the fund’s investment in affordable housing to almost $800 million. Aware Super owns housing in Sydney’s Epping, Waterloo, Hurstville, Northmead and Miranda, Monee Ponds in Melbourne and Claremont in Perth. The fund’s strategy is to own and rent dwellings suitable for the fund’s core membership of nurses, teachers and emergency service workers, the vast bulk of whom are women. The homes are rented at a discount of 20% to market -based rent. Its latest project is a $150 million investment in a new building in Liverpool, Western Sydney which will comprise both office space and 300 new affordable units.

Private sector investment

Apart from investment in the sector by superannuation funds, other private sector initiatives (publicly announced) include the following:

Victoria

In 2018, Community Sector Banking (half owned by Bendigo Bank and half by CHPs, Haven, Home Safe in Victoria and Housing Plus) started a $50 million 12-month pilot program to subsidise affordable housing tenants to buy their own homes. The aim of the program was to assess the desire and ability of CHP housing clients to own their rental home and then back qualifying applicants under a shared equity model to take out a mortgage. A lack of affordable housing is a particular problem in regional Australia.

New South Wales

In April 2019, fund manager Centuria Capital Group entered into a partnership with Compass Housing and infrastructure investor Tetris Capital to develop 192 social and affordable residential dwellings through the Hunter and Central Coast regions of NSW. Under this arrangement, Centuria funds and develops the 192 dwellings across four social and affordable housing projects which will be run by Compass Housing. Tetris then invests in the finished developments providing a take-out for Centuria.

South Australia

In recent developments, affordable housing developer, Nightingale Housing is expanding from Victoria into South Australia with CHP, Housing Choices Australia, in a collaboration that will for the first time build carbon-neutral housing for lower income people in Adelaide’s Bowden, a 16-hectare urban regeneration project on the edge of the CBD. The development will have 34 apartments that will be a mix of below-market rent affordable housing, “for sale” private homes and specialist disability accommodation. Half the construction cost will come from the state government’s South Australian Housing Authority which will own a portion of the affordable housing and will be operated by Housing Choices. The operator will also seek NHFIC funding for construction and raise debt finance against its own asset portfolio. The project also has the support of the state development body, Renewal SA.

Finally, in an interesting development, it was reported in November 2020 that ASX listed Domacom (a fractional investment company) together with BlueCHP will undertake a $10 million, 20-home pilot project to provide affordable housing. Domacom retail investors will provide 60% of the capital and BlueCHP the other 40% (possibly tapping into funds from NHFIC). Under the proposed structure, Blue CHP will own the dwellings - Domacom will set up a fund for each home, with units in the fund representing ownership. The tenant will receive 1% of the equity in the fund when they move in and a further 1% point each year up to a maximum of 5%. At the end of 10 years when the property is sold, profit is realised by the owners of the units including the tenants. Properties will be valued each year and investors can buy and sell units before the end of the 10 years.