$2B in Vic Affordable Housing Package
23 February 2017 at 1:01 pm
Housing and homelessness organisations will be able to utilise a $1 billion Social Housing Growth Fund and access low interest loans worth a further $1.1 billion as part of the rollout of the Victorian government’s affordable housing strategy.
The $1 billion Social Housing Growth Fund is described as a collaboration between government, and the private and philanthropic sectors to provide dedicated assistance to community housing associations to help support up to 2,200 households.
Set up using capital provided by the the Victorian government, the government said the returns would be used as a funding stream to build new social and affordable homes, and subsidise rent for Victorians in need of housing assistance.
At the same time, the loan program, described as the first of its kind in Australia, would allow registered housing associations to borrow funds for new homes at a lower interest rate.
By acting as guarantor, the government said it would help these associations spend less on interest and more on helping Victorians in need.
Treasurer Tim Pallas said a further $100 million in low-cost loans will also be made available to registered housing associations.
“The management of 4,000 public housing properties will be transferred to the community housing sector to improve services to tenants through better property management, local housing services, access to support services and grow social housing. The government will work with partners and stakeholders during the transition,” Pallas said.
“The government will also push the Commonwealth for a long-term commitment to the National Affordable Housing Agreement, with modelling showing their cuts would mean Victoria would lose $360 million and 56,000 Victorians denied access to homelessness services.”
He said the the government would create a dedication fund established progressively with the aim of reaching $1 billion by 2020.
“They would be returns on a revenue stream of about $75 million a year dedicated to this purpose,” Pallas said.
“This demonstrates the biggest single injection into social housing in the state’s history. A level of effort unprecedented in this state and certainly one that approaches the issue from a much more evolved approach.”
Housing Minister Martin Foley said the strategy was a “bold new policy that starts to address social and affordable housing”.
“The debt instrument will also allow social and community housing organisations to step forward in a way that they haven’t been able to do so yet. [They] have been held back by scale. They do a great job, they are linked to their communities and they are held back by scale particularly when it comes to their ability to raise finance,” Foley said.
“With the debt and loan facility we will see social housing organisations able to go to banks and partner with others or go one their own and to lift to the scale that we have not seen before.
“In addition to that we are announcing a loan facility that will provide the organisations with a direct line of credit to seek loans at a more competitive rate directly from the state government.”
He said the government has provided $2 million for implementation and setup costs associated with the programs, including investigating the financial intermediary for the loan guarantee program.
The program will be administered by the department of treasury and finance and department of health and human services.
CEO of Victorian Council of Social Service Emma King described the announcement as “a great day for Victoria”.
“We have to see it for what it is. It is a smart and significant investment in the future of Victorians.
We have long stated that one of the greatest challenges Victoria has is the provision of safe and affordable housing,” King said.
“We are looking at significant additional housing and we look forward to working with the Victorian government in looking at the detail.
“VCOSS also welcomes the announcement of loans and loan guarantees totaling a further $1.1 billion dollars. Housing associations will now have extra capacity to do their part, securing and maintaining housing stock for the state’s most vulnerable,” she said.
The Victorian government met with housing sector representatives on Thursday to explain the strategy in more detail.
Deputy CEO of Launch Housing Heather Holst told Pro Bono News after the briefing that the strategy was a smart use of government resources through the creation of the $1 billion fund.
“I think this will provide a lot more social housing that is really targeted at the people we are worried about and that’s fantastic,” Holst said.
“That will all start from the next financial year I understand. It is aimed at the creativity and adaptability of the sector and it appears to be a real partnership with the community from government which is not something we have seen to this extent before.”
She said overall the response to the housing sector agencies at the briefing was good and that there could be some benefits within the next 12 months.
“I think the detail of the process is going to be worked out now with us as stakeholders.There will be more consultation to finalise it.”
Chief executive of Unison Housing Michael Perusco also attended the briefing and described the strategy as “a positive policy initiative”.
“The government has recognised the need for ongoing growth in the system and created a vehicle to do that,” Perusco said.
“The $1 billion growth fund will exist in perpetuity, the return invested in funding for affordable housing… that coupled with access to low cost debt means that you can do some innovative and exciting things with partners.
“The current system is broken and we need to trial different approaches and what [the government] has come up with will allow that to occur.”
CEO of National Shelter Adrian Pisarski said he understood the fund was about leveraging private finance and reducing the cost of finance to community housing providers so that they can grow housing stock.
“That’s a good thing but Victoria has one of the lowest levels of social housing in the country and how much of this will actually significantly increase social housing for those who most need it is a question mark in my mind,” he told Pro Bono News.
“It really depends on what the outcomes are going to be in terms of helping people on the highest need and the lowest income. Having said that I want that to be done in a way that doesn’t just concentrate lower-income people in ghettos of social housing and hopefully this package will assist community housing providers to build a good range of tenures that also grow social housing for those most in need.
“I just hope that it’s part of a broader strategy of the state government around housing affordability in general… we think the states needs to look at reforming stamp duties and land taxes and their planning measures could be improved to help as well.”