Affordable Housing Beyond the Scope of Government
21 June 2016 at 10:48 am
The impact of Australia’s lack of affordable housing is far reaching, driving rental stress and homelessness. But, according to experts, the affordable housing solution may lie beyond the halls of parliament.
In the latest episode of Not for Podcast, special contributor Rachel Alembakis, founder and publisher of The Sustainability Report, partnered with Pro Bono Australia News to investigate the challenges and opportunities for developing affordable housing.
The current federal government established the Affordable Housing Working Group to investigate increasing the supply of affordable housing through innovative financial solutions.
The working group considered a number of solutions, including social impact bonds, impact investing and a model for a large intermediary aggregator.
Submissions from investors, Not for Profits, local governments and industry groups also suggested that leveraging private capital could solve the affordable housing crisis.
Director of impact investing at Social Ventures Australia (SVA), Mark Peacock, told Alembakis that the issue was beyond the scope of government to address.
“There’s a huge shortage of appropriate stock within the market. Everything from crisis refuge accommodation through to affordable housing,” Peacock said.
“And some reports suggest there’s over 400,000 dwellings required to meet the level of demand.
“Invariably there’s a huge need for fit-for-purpose capital to fund that level of development that’s required over the coming years.
“And I think in the current environment where all governments, state and federal, are fiscally constrained, there’s a need to leverage private capital.”
SVA manages superannuation fund HESTA’s $30 million impact investment fund. This year it made its first allocation of $6.7 million to Horizon Housing, a community housing provider in Queensland.
“Institutional capital is really well placed, particularly the superannuation market, where there’s about $1.5 trillion of capital tied up in superannuation funds,” Peacock sad.
“And trustees of those funds are looking for longer dated assets to match their long-term liabilities.
“And of course that’s what the sector needs too. They need capital that is going to match the tenure or longevity of the assets.
However, he said governments also needed to get on board and play an enabling role.
“It’s not just about the supply of capital, the availability of capital in isolation won’t actually be the silver bullet,” he said.
“There’s a need for a holistic approach across all the different participants, and that does include government.”
Although the working group did not release a final report before the 2 July federal election was called, affordable housing ranked third on the list of voters’ funding priorities and leading Not for Profits have been campaigning for politicians to commit to resolving the issue.
CEO of the New South Wales Federation of Housing Associations, Wendy Hayhurst, said it was on the radar of all major political parties.
“The Affordable Housing Working Group is really a very bipartisan type arrangement… there is an acknowledgement it’s a huge problem,” Hayhurst said.
“Labor’s announcement was reasonably positive, the Greens have already said they support this, the Liberals have got the financial intermediary as one of the four models they’re exploring in the Affordable Housing Working Group.”
This episode features affordable housing experts and field practitioners:
- Mark Peacock, director of impact investing at Social Ventures Australia.
- Wendy Hayhurst, CEO of the New South Wales Federation of Housing Associations.
- Debby Blakey, CEO of superannuation fund HESTA.
- Jamie Muchall, business development manager at Horizon Housing.