Guaranteeing the Future of Affordable Rental Housing
29 October 2013 at 9:11 am
An international review of the use of government guarantees to support investment in affordable rental housing by RMIT University says a similar model is “desperately needed in Australia”.
The report by RMIT University’s Dr Julie Lawson, and published today by the Australian Urban and Housing Institute (AHURI), is part of a larger study that aims to design a guarantee scheme suitable for Australian housing conditions.
Dr Lawson examined seven schemes in Europe and the US to detail how guarantees and intermediaries channel longer term, lower cost investment to increase the supply of social and affordable housing.
“Australian governments are struggling to address pressing infrastructure needs, including a severe shortage of affordable rental housing,” she said.
“One of the most important findings of this review is the minimal impact that guarantees have had on government budgets.
“Through appropriate revenue support and regulation, sound business management practices and carefully structured guarantees, there has been a zero default rate among many European housing providers receiving guaranteed loans.
“The cost and availability of private finance remains a major obstacle for all governments and for the affordable housing industry.
“Government and sector-based guarantees and intermediaries are a growing area of international innovation in the housing field and offer real opportunity for change, with the potential to sustainably deliver the affordable housing infrastructure so desperately needed in Australia.”
The review will be discussed at an international Think Tank in Melbourne today which will bring together senior stakeholders from investment funds, ratings agencies, housing ministries and providers to consider Australian and international research findings and discuss draft models for Australian conditions.
“The research being conducted by RMIT for AHURI is critically appraising different approaches to guaranteeing investment in social housing, to inform the development and implementation of a model appropriate to Australian conditions,” Dr Lawson said.
“The results of the international Think Tank will directly inform the Final Report to AHURI, to be completed early in 2014, which will advise the Australian government on a way forward.
The research project is funded by AHURI, a national Not for Profit independent organisation that supports high quality research on housing and urban issues to inform the policies and practices of governments, industry and the community sector, and aims to stimulate debate in the broader Australian community.
The full report can be found here.