Housing Trust to build $2.4m affordable rental home complex

Community housing provider (CHP), Housing Trust, has begun work on a $2.4m affordable housing project in Flinders, NSW.

The Housing Trust development will be built on Willinga road and will feature two three-bedroom villas and five two-bedroom villas. One of the two-bedroom villas will also incorporate disabled access in its design.

This development will be Housing Trust’s third in 12 months, as the CHP continues to provide affordable housing for Illawarra. A total of $10m has been committed to building properties in Bulli, Corrimal and Flinders.

“We’re looking at a very substantial ongoing investment into the community which is not just creating homes but keeping money and jobs in the community and looking after families that are here.

“We’re thrilled to be able to be making this investment and commitment to the Shellharbour community,” CEO Michele Adair said.

The Flinders villas are expected to be complete by early 2020, with tenants moving in soon after.

Revitalising the National Community Housing Standards

The community housing industry is leading a project to revisit and revitalise the National Community Housing Standards (NCHS) turning them into “tools for improvement” – carried out by professional, independent and experienced assessors – making clear recommendations and sharing best practice to raise organisational performance.

April 2019 Project Update

The CHIAs have now finalised the survey and an environmental scan. We will be setting up the Advisory group and starting design this month.

Want to get involved? 

We are looking for individuals and CHOs to support and drive the project. Read more and find details here.

CHIA’s budget recap: hits and misses

On Tuesday 2 April, the Liberal Government announced their federal budget for 2019-2020. Although deemed an ‘infrastructure’ budget, housing affordability seems to be a topic which is missing from the agenda.

It is unfortunate the budget makes no mention of an affordable housing plan or addressing housing affordability in Australia. The findings from the ‘Making Better Economic Cases for Housing Policy’ indicate a clear connection between productivity and locating housing close to jobs and services. Despite the Liberal Government’s budget investing millions into roads and transport, the budget has failed to make the connection between the necessity for affordable homes in close proximity to jobs and services which will ultimately increase productivity.

Here are the hits and misses in the Liberal Government’s budget:

Hits

Roads, rails and transport: $6.2 billion for Victoria, $7.3 billion for NSW, $2.3 billion for SA and $1.6 billion for WA have been dedicated to infrastructure projects for improving roads, rails and transport. This addresses the ‘infrastructure’ part of the budget which the Coalition will focus on.

Mental health and suicide prevention: The budget also announced much needed reform in the country’s mental health and suicide prevention strategy. A $461 million investment has been dedicated to improving the mental health and suicide prevention services across Australia. This includes $11.3 million towards the creation of 30 new Headspace services.

Fighting domestic violence: Over the next three years, an extra $328 million will be dedicated towards the fight against domestic violence. This includes frontline services ($82m), safe places ($78m), prevention strategies ($68m), hotline service ($62m), and support and prevention measures for Indigenous communities ($35m).

NT remote housing: The government has dedicated $550 million for remote housing in the NT. This matches a commitment by the NT Government.

Taxpayers: $158 billion in additional tax relief is the centrepiece of the budget. If the Liberal Government is re-elected, taxpayers earning up to $126,000 per year are set to receive immediate tax relief. More than 10 million Australians will benefit, though only 4.5 million will receive the full amount.

Small & medium business: The government is increasing the instant asset write-off threshold from $25,000 to $30,000 per asset. Apprentices, including bakers, bricklayers, carpenters and plumbers, will receive a $2,000 payment, with incentive payments to employers doubling to $8,000 per placement.

Misses

NDIS: One of the biggest savings in the budget is the cuts to the NDIS. The government plans to reduce the $1.6 billion in National Disability Insurance Scheme payments with a slower-than-expected rollout. This money will be used for improving the budget bottom line and creating an emergency disaster response fund.

Welfare recipients: Employed welfare recipients will be asked to report their employment fortnightly in a new system, which is then checked by the Department of Human Services. The government hopes this will prevent over-payments for working income support recipients.

Foreign doctors: In last year’s budget, millions of dollars were saved through the reduction of the number of foreign doctors brought to Australia. This program is extended in this year’s budget with the number of overseas-trained doctors being reduced by another 155.

Canberra: While a large degree of money has been invested in other cities, Canberra’s infrastructure plans aren’t set to go ahead until 2021-2022. Canberra Hospital’s intensive care unit is set to increase by six beds.

CHIA’s Submission to the Review of the National Regulatory System for Community Housing (NRSCH)

CHIA is firmly of the opinion that a strong and fair national regulatory regime is a fundamental part of the supporting institutions that underpin the development of the community housing industry and the confidence all stakeholders can take in its operation. Critical is that there should be one national system operating in every state and territory with governance arrangements that ensure its independence.
 
The submission can be found here.

Recent Research – More Reasons for Investing in Affordable Rental Housing

There is always plenty of research, policy proposals and housing news, and too few hours to digest it all. Over the last month three particular pieces are worth your time and effort. In this issue we focus on two of those. The May issue will feature the third – Shaping Housing Futures.

On 25 February, an audience at Sydney Museum heard Professor Duncan Maclennan presented the findings from ‘Strengthening Economic Cases for Housing Policy.’ It was commissioned from UNSW, City Futures by a 17 strong consortium led by CHIA NSW and including organisations from the private, government and not for profit sectors. The research subjected selected housing economy effects (identified in an earlier ‘Stage 1’ study to econometric modelling). The project also involved the expertise of SGS Economics & Planning and Cadence Economics.

In essence, the project involved comparing the productivity gains from locating housing near to jobs and services by modeling outcomes for both well and poorly located neighbourhoods in Sydney. The results are startling. In summary:

  • Individual workers could save the equivalent of $2,500 per year in travel time through shorter commute times, and with half the saved time used for working, this would lead to extra $1.13 billion of labour supply for the growing NSW economy;
  • Moving workers closer to a wider range of jobs will see their skills better used and their incomes increased by between $12,000 to $41,000 more a year (depending on their qualifications) by locating to neighbourhoods with job densities;
  • These increased earnings should lead to a $17.57 billion boost to the economy over 40 years.
  • Even after factoring in the $7.8 billion it will cost to invest in 125,000 affordable rented homes over 10 years, the economy would still be around $12 billion better off.

Those of us working in the sector have long argued that safe, secure and affordable homes make a substantial difference to people’s life chances and overall wellbeing. What this work shows is that by failing to properly invest in affordable housing, we are throwing away potentially billions in lost income.

There is more work to be done on other economic effects. While we could estimate the ‘excess rental burden’ of lower income households paying more than 30% of their income on housing costs, we could not model what this means for savings and expenditure elsewhere in the economy. A stage 3 beckons.

A few days later, UNSW City Futures published a report estimating the costs of delivering new social and affordable housing to meet needs (across Australia) over the next 20 years. It builds on the AHURI research ‘Social Housing as Infrastructure: An Investment Pathway’ to extend that methodology to estimate the need for affordable rental housing from households in the second income quintile who are in housing stress.

Again the numbers appear startling. The one million homes that are needed attracted some comment. Of that, almost two thirds are required to play catch up i.e. to meet existing need, and is a consequence of failure to invest in the past.

The cost to government of meeting needs is modelled in the report based on a number of funding scenarios.  What stands out, is how land influences the development costs in many metro areas and thus how valuable government land contributions or inclusionary zoning can be. The report can be accessed here.

Together, these two reports set out the scale of the social and affordable housing shortfall, what an affordable housing program could cost, but also the positive impact government investment could realise in achieving wider economic gains.

– Wendy Hayhurst, CEO of CHIA National

CHIA WA submission to Review of National Regulatory System

CHIA WA considers that regulation is still required and relevant for the community housing sector in Australia and that WA should be fully joined into a single, nationally consistent, legislated regulatory system so that investors, governments, CHPs, and tenants only have to understand and work within the one system.

It is important that the NRSCH review includes consideration of the wider regulatory burden on community housing providers, and the roles played by each component, otherwise there is a risk that important issues – particularly regulatory burden and costs to both providers and government – will not be tackled.

CHIA WA’s vision for the future regulation of the sector is a system that gives assurance to government, lenders, tenants, and the wider community about the good governance and financial strength of the sector, whilst being responsive to changes in the sector and the environment it operates in.

Read the full submission here.

CHIA WA submission to Review of Local Government, WA, re Rates Exemptions

On 29 March 2019, CHIA WA made a submission to the Review of the Local Government Act, WA, regarding the issue of rates exemptions for land in charitable use.

The Local Government Act (the Act) currently provides that all land is rateable unless it is listed as exempt. Land used exclusively for charitable purposes is exempt from rates. All but one of CHIA WA’s members is a registered charity.
The meaning of “land used exclusively for charitable purposes” is not defined in the Act. This lack of clarity has not been to the benefit of either community housing providers or local authorities, as much time and resource is lost in contesting whether exemptions are due or not.

CHIA WA’s key recommendations are set out as follows:

Whatever the outcome of the review, CHIA WA supports the need for clear definitions setting out when rates exemptions/minimum payments are due to community housing providers and CHIA WA would be happy to assist in working out the detail of those definitions.

Such clarity will, hopefully, result in consistency of approach from all local authorities. The current regime is applied differentially across local government, which creates uncertainty for our members. CHIA WA supports a clear and consistent approach to the issue of rates exemptions.

CHIA WA’s position is that the loss of rates exemptions for charitable community housing providers will significantly reduce the amount of money available to our members to provide low cost housing and support services to those in most in need in WA. If rates exemptions are lost, other parts of government will need to step in and fund these services or, as is more likely the in the current fiscal climate, these services will be lost.

For this reason, CHIA WA seeks the retention of the rates exemption for charitable community housing providers.

The full submission can be read here.

CHIA WA Submission re Leasehold Strata Regulations

CHIA WA submission to the Leasehold Strata Titles Regulations Discussion Paper

 

On 14 February 2019, CHIA WA and Shelter WA made a joint submission providing feedback on Landgate’s Discussion Paper for leasehold strata schemes.

The Discussion Paper presents a new and important opportunity for strata development and more importantly the provision of affordable housing options in Western Australia, with potentially wide-reaching opportunities from this new form of strata title.

The submission made 4 key recommendations as follows:

  1. There should be no lower time limit, i.e. 20 years, to leasehold strata schemes and the ability to create short-term leasehold strata schemes should be widened to everyone, not just the Housing Authority or any other government agency.
  2. There is no core need for a formula to be included in the regulations, rather there should be flexibility for both lessor and lessee, when putting the scheme together, to negotiate the by-laws when developing the scheme.
  3. We support the recommendation for the ‘not to be unreasonably withheld clause’, provided it is very clear that it would be reasonable to withhold if the result would be the property would be lost to affordable housing for the duration of the lease.
  4. In terms of disclosure at the time of transacting with a leasehold strata scheme, we strongly recommend information be provided to the buyer to ensure they understand what they are purchasing.

The full submission can be read here.

NHFIC ISSUES FIRST SOCIAL BOND OF $315 MILLION

Last week, the National Housing Finance and Investment Corporation (NHFIC) issued its first bond of $315 million to community housing providers (CHPs). CHIA congratulates NHFIC on their success in providing the single largest social bond in Australia.

NHFIC’s bond will ensure funds raised be loaned to CHPs to help deliver more social and affordable housing across the country. The bond will provide a fixed rate of under 3.00% for 10-year, interest-only loans to CHPs who are participating in NHFIC’s first round of loans. BlueCHP, CHL, Compass, Hume and Unity are all part of the NHFIC scheme.

As a result of NHFIC’s bond, CHPs are provided with greater financial certainty and cheaper finance which will generate better cash-flow. The funds will be used to create up to 300 new affordable rental dwellings, enhanced support services and ongoing maintenance.

“The NHFIC interest rate is significantly below the rates that the community housing industry can typically borrow and means our members can put more money into building new homes,” said Wendy Hayhurst, CHIA CEO.

Nathan Dal Bon, NHFIC’s CEO, said he’d like to thank the many stakeholders who have helped with the success of NHFIC’s first bond; including the community housing sector, state governments and bond investors.

“NHFIC is very pleased at the exceptionally strong level of investor demand for its first affordable housing bond which was four times oversubscribed. We are now able to pass on the benefits of NHFIC bonds through to CHPs which ultimately benefits tenants on lower incomes,” Mr Dal Bon said.

NHFIC will work closely with the community housing sector and investors to regularly issue social bonds in the future and create more affordable housing in Australia.

Notice of support

The Community Housing Industry Association (CHIA) and its members express our sympathy and support to the victims and families of the shootings at the Al Noor and Linwood mosques in Christchurch. Our thoughts are with all people of New Zealand at this time.
 
Community housing is home to many Muslim people. Our members also employ many Muslim people. We stand in solidarity with them and the communities of New Zealand and are united in condemning this outrageous attack . With our members CHIA will be investigating practical actions we can take to promote respect and harmony. 
 
On behalf of the communities we serve, the community housing industry stands strong against racial hatred and anti-immigrant prejudice for which there is no place in today’s society. It must end.