2,200 "new" dwellings from the Social and Affordable Housing Fund

Last week the NSW Government announced the first new projects to be delivered by the Social and Affordable Housing Fund (SAHF). This follows a lengthy process after a short-list was announced just under a year ago.

Details of 2,200 new social and affordable housing dwellings have been announced as follows:

• BaptistCare NSW & ACT – 375 homes for older people in housing stress and at risk of homelessness and 125 homes for single parent families with a focus on women impacted by domestic violence (@ 70% social housing, 30% affordable housing)
• Compass Housing Services Co Ltd – 600 homes for tenants that are close to support services and infrastructure (@ 81% social housing, 19% affordable housing)
• SGCH Sustainability Limited – 300 homes for tenants with tailored support coordination services and quality dwellings close to services and infrastructure (@ 70% social housing, 30% affordable housing)
• St Vincent de Paul Housing – 500 homes to general and older aged tenants (@ 71% social housing, 29% affordable housing)
• Uniting – 300 homes for people aged over 55 without children at home (@ 70% social housing, 30% affordable housing)

The projects include a number of regional sites but the announcement provides no clear insight into exactly who will be building what, and in which region. However an infographic provided with the Premier's press release (see below) gives some indication of where the projects will be located:

• 696 dwellings in Hunter New England
• 369 dwellings in Nepean Blue Mountains
• 327 dwellings in South Western Sydney
• 288 dwellings in Northern Sydney, Sydney and South Eastern Sydney
• 84 dwellings in Western NSW, Murrumbidgee and the Far West
• 80 dwellings in Northern NSW and the Mid North Coast
• 63 dwellings in Southern NSW and Illawarra Shoalhaven
• (Note - that doesn't quite add up to 2,200, there are 294 dwellings missing. But the infographic says St Vincent de Paul and St George Community Housing are finishing 294 sites across NSW. Does this mean the SAHF is also funding projects that were already under construction?)

NSW Government announces SAHF shortlist

The NSW Government has announced that nine parties have been shortlisted to participate in the first stage of the Social and Affordable Housing Fund ('SAHF'). The SAHF was established in 2015, with $1.1 billion in seed capital from the State, to assist Community Housing providers, private developers, landholders, and NGOs to develop Social and Affordable Housing. 

Above: An award-winning Social Housing development 

The shortlisted parties include four standalone applicants - specialist Community Housing providers Link and St George, plus BaptistCare and Uniting, care organisations involved in Community Housing. The other five are consortia containing Community Housing providers and/or care organisations and private interests. At the industry briefing concerning the SAHF, NSW Government representatives suggested that only consortia would be considered. The State received 24 applications in total. 

There is no indication of where the shortlisted parties propose to construct new housing, nor how many properties each applicant intends to deliver. However, the SAHF project team previously indicated that approximately 30% of dwellings to be provided at the first stage will be in regional NSW. Nor is there any indication of how many parties will ultimately be successful. But given 3000 properties will be built in the initial tranche, and the minimum project size is 500 dwellings for metro-based applications and 200 for regional or mixed applications, it is possible that all shortlisted parties could be selected.

The shortlisted applicants must now submit detailed proposals. The NSW Government is expected to announce its preferred applicants in August 2016. The announcement provides that successful applicants are expected to begin tenanting SAHF properties in two to three years. 

The Social and Affordable Housing fund is one means by which the State hopes to increase the Social Housing portfolio under the overarching 'Future Directions' plan. 

Social and Affordable Housing Fund - update

Some developments relating to the NSW Government's $1 billion Social and Affordable Housing Fund have occurred since an industry briefing was conducted in December 2015. 

Premier Mike Baird discussing the Social and Affordable Housing Fund

Regional allocation

Most notable is that the SAHF Project Team has provided information confirming that phase one of the initiative will aim to deliver approximately 30% of the 3000 dwellings to be provided in regional NSW. The Project Team defines 'regional areas' as all local government areas outside of Sydney, Newcastle, Wollongong, Gosford, and Wyong. At the industry briefing, NSW Treasury Project Director Richard Mills had said the Government did not have a preference for proposals from metropolitan or regional areas. 

This allocation appears to be largely consistent with both tenant demand and the current dispersion of Social Housing stock in NSW. Though figures vary according to sub-region, waiting times for Social Housing are most often higher in Sydney, Newcastle, the Central Coast, and Wollongong than in other areas of NSW. Indeed most property types in most areas of Sydney, Newcastle, the Central Coast, and Wollongong have waiting times of 5-10 years or more. Moreover, the overwhelming majority of current Social Housing dwellings are situated in or near major metropolitan regions. Centre for Affordable Housing data provides that, in 2011, 93,945 of 114,602 Social Housing dwellings in NSW (i.e. 82%) were situated in the statistical districts of Sydney, Hunter, and Illawarra. The Sydney statistical district includes the Central Coast.

North Coast Community Housing Company CEO John McKenna has told The Daily Examiner that the SAHF's requirement that at least 200 social housing dwellings be delivered in any one proposal is prohibitive for providers operating in regional areas. He raised the prospect of his organisation forming a consortium with other Community Housing providers in order to submit a proposal satisfying the criterion. He also noted, "Unlike metropolitan areas, we wouldn't be able to build a 100-unit tower, so our proposal would have to be based around low density or medium-density opportunities".

Launch and Future Directions

On January 30, the Social and Affordable Housing Fund was 'officially launched' by Premier Mike Baird, Treasurer Gladys Berejiklian, and Minister for Social Housing Brad Hazzard. Project partners NCOSS and Infrastructure Partnerships Australia also participated. However, it appears that the launch will not impact upon the administration of the project in any substantive way. Both the media release and the associated reporting neither built on nor contradicted anything provided in the industry briefing or elsewhere. 

Similarly, the fund is noted as forming part of the NSW Government's Social Housing strategy for the next decade in the recently released Future Directions paper (analysis of that document here). However, it is only mentioned in passing, and the paper provides no new information on the project. 

$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.