Yesterday the Victorian Government announced a $2.1 billion social housing package.
The Council to Homeless Persons has applauded the announcement and today we provide a deep dive of the details, including links to relevant Victorian Government web resources, and also this handy briefing
The Victorian Government will establish the Social Housing Growth Fund in 2017-18, and progressively add capital over four years until it reaches $1 billion. The fund will operate like a ‘future fund’, which means the seed capital of $1 billion is invested in equities (shares). This maintains the value of the original capital pool, and generates a flow of dividends in perpetuity. It is estimated the fund will deliver around $70 million p.a. of ongoing money to be used for new social housing, including:
- Construction of new social and affordable housing dwellings on non-government land by Housing Associations. The new dwellings could be part of mixed developments including private housing, or other forms of development
- A rental subsidy program where agencies head lease existing residential properties from the private rental market
The stream of finance that comes from the Social Housing Growth Fund has been projected to deliver 2,200 new social housing dwellings (both new builds and rental subsidies) over the next five years.
To access the funds, registered community housing organisations will be required to participate in the Victorian Housing Register, and to allocate 75 per cent of social housing tenancies from the priority access category of the Victorian Housing Register. This ensures that the properties available to house people experiencing homelessness increase.
The Victorian Government will provide up to $1 billion in loan guarantees over six years, effectively acting as a guarantor for Housing Associations to access loans from banks and other private lenders to build new social housing. This component of the package is not money loaned directly to the sector, but rather provided as surety in case of default.
The loan guarantee makes it more appealing for banks and other lenders to provide finance for social housing projects, which have previously been seen as a high-risk investment.
The Victorian Government will make available $100 million in low-interest loans directly to registered housing associations. This revolving loan facility will supplement private sector finance, and will mean that housing associations pay less interest than they would be through private sector loans.
To access the $100 million low-interest loans will be required to participate in the Victorian Housing Register, and 75 per cent of social housing tenancies will be from the priority access category of the Register.
The Victorian Government has announced that the management of 4,000 public housing properties will be transferred to community housing organisations, meaning that the properties will still be owned by the State, but tenancies, rent and maintenance will be managed by the community housing agency.
Management transfers are the transfer of tenancy and property management of public housing properties to registered community housing agencies.
Tenants’ rights to their current homes will be unchanged as a result of the transfer. Tenants will continue to pay no more than 25 per cent of income on rent (plus Commonwealth Rent Assistance for which they will be newly eligible). Tenants will need to apply for Commonwealth Rent Assistance, with assistance from their community housing agencies.
We commend the Victorian Government for directly investing in housing targeted at low income households as a strategy to reduce homelessness.
We now look to the Federal Government to outline a plan to tackle Australia’s homelessness crisis and the chronic shortage of affordable housing that underpins it.
We want to see a plan that includes mechanisms that make private rental more affordable and boost the supply of social and other affordable housing.
If you haven’t already, we encourage you to get behind the #Homesfixhomelessness campaign.