Tuesday, December 22, 2015

$1bn Social and Affordable Housing Fund announced

The NSW Government has unveiled the first details of its 'one billion dollar social and affordable housing fund' (SAHF), at an industry briefing on 11 December 2015. 

According to David de Carvalho, Deputy Secretary - Strategic Reform and Policy at the Department of Family and Community Services, monies from the fund will be used to bridge a funding gap in proposed new social and affordable housing developments, to make such projects commercially viable. Project consortia including at least one Tier 1 or Tier 2 community housing provider may apply for funding. Mr. de Carvalho provided that the fund will deliver "at least 3000" social and affordable housing dwellings - and anticipated further funding if this "initial stage" is successful. 

Community housing providers are the principal beneficiaries of the SAHF

To be eligible for funding, a proposed development must provide a minimum of new social housing dwellings - 500 for metro or mixed metro and regional developments, and 200 for regional developments. In this context, 'new dwellings' can mean either newly constructed or newly available as social housing. Richard Mills, Project Director at the NSW Treasury, said the Government has no preference for metro or regional proposals. Furthermore, at least 70% of the total number of dwellings must be social or affordable housing. The Government anticipates that community housing providers involved will hold unencumbered title to social and affordable housing residences funded under the scheme.

Both Mr. de Carvalho and Mr. Mills emphasised that projects delivering a mix of social, affordable, and private market dwellings over multiple locations would be preferred. Mr. de Carvalho said projects would "ideally" be located close to employment, services, and public transport. Both also stressed a preference for projects built on unused or under-utilised land already owned by the applicant housing provider/s. Mr. Mills agreed with a suggestion from a briefing attendee that consortia need not apply if a proposed development does not satisfy this preference. 

It is important that not all funding for successful applications will go towards construction of dwellings. Funding will be provided for the community housing providers' tenancy and asset management services. Social service providers are also expected to form part of applicant consortia. This is because funding will also go to what the briefing presentation called "Tailored Support Coordination" - that is, services that support the deemed needs of resident social housing tenants. According to Mr. de Carvalho, such supports will ideally facilitate increased educational and employment prospects, and ultimately a transition out of social housing. Mr. Mills emphasised that this funding will provide for the "coordination" of social services - that is, linking them and monitoring activities - but not the client support activities themselves. Indeed, project funding will be provided over a period of 25 years, as opposed to a lump sum. 

The briefing presentation provided the following timeline for the initiative:

"14 December 2015 - Registration process [for interested participants] opens;
Late January 2016 - Release of Invitation for expressions of interest;

March 2016 - Deadline for submissions of expressions of interest;
May 2016 - Announcement of shortlisted Applicants;
May 2016 - Release of requests for proposal;
May-July 2016 - Interactive process;
July 2016 - Deadline for submission of proposals;
August 2016 - Announcement of preferred proponents;
September 2016 - Service agreements awarded."

The SAHF was initially promised by the Liberal-National Party coalition prior to the 2015 NSW election. The substantive policy announced on 11 December was developed in conjunction with the NSW Council of Social Services (NCOSS), with reference to a Memorandum of Understanding, and infrastructure think tank IPA

Premier Mike Baird is expected to make another announcement concerning the fund in early 2016. The full industry briefing is available here, and the accompanying presentation here

Our response

NSW is experiencing a renting affordability crisis. Approximately 60,000 people are currently on the waiting list for social housing in NSW. The wait time for a majority of dwellings - particularly larger houses, and almost all properties in Sydney - is at least five years, and often more than a decade. Moreover, due to the preference given to 'priority' applicants in allocating available properties, an offer of social housing for many non-priority applicants will most likely never arrive.

The Tenants' Union strongly supports the expansion of the state's social and affordable housing stock in NSW as a central measure to address this crisis. Accordingly, we are supportive of the basic objective of the SAHF to provide 3000 new social and affordable dwellings. However, we also agree with the closing comments provided by Acting NCOSS CEO John Mikelsons at the industry briefing, that "tomorrow, even with this fund, we will still have a housing affordability crisis in NSW". An additional 3000 dwellings represents a commendable first step rather than anything close to a solution. Mr. Mikelsons also identified the need for inclusionary zoning and tax reform to adequately address this issue. Here, too, we broadly concur, though would add that reform to tenancy laws is also important. 

Our response to the finer details of the scheme is also mixed. We support the requirement that funded projects consist of at least 70% social and affordable housing. This provides an appropriate focus, and should serve as an important safeguard against use of the initiative as a de facto subsidy for private market developments. Moreover, the benefits to tenants of housing close to transport, employment, and education facilities are self-evident - though this does not appear to be a strict requirement for funding. 

The preference for developments on 'unused or under-utilised' land already owned by applicant housing providers should provide for efficient use of Government funds, and hopefully the delivery of as many new residences as possible. We are somewhat concerned, however, by the possibility that low-density community housing may be considered 'under-utilised'. This would raised the prospect of painful eviction and relocation for existing tenants. 

But the requirement that funded projects include "Tailored Support Coordination" seems to signal the continuation of a worrying trend in social housing in NSW. It assumes an intrinsic and necessary connection between poverty and social support. The successful 'Housing First' initiative negates such a presumption. The expectation on efforts to 'transition' to the structurally insecure and unaffordable private market is also cruel and unrealistic for most. Finally, such an approach further entrenches housing as a privilege to be earned and lost, as opposed to a basic need and a human right. 

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