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- Published: Friday, 30 August 2019 07:54
Bridge Housing CEO John Nicolades has outlined the opportunities and options for the Build to Rent model to be part of the solution to Australia’s housing affordability and supply crisis.
Speaking on Day 3 at the National Housing Conference in Darwin, he said: “The community housingsector is already well embedded in local communities, is well regulated and has extensive experience in delivering tenancy and property management services whilst achieving high levels of tenant satisfaction.”
“There are also financial benefits associated with community housing providers’ involvement in Build to Rent – namely, their exemption from land tax.”
Rental affordability is particularly stark for very low and low income households in capital cities such as Greater Sydney, where demand for Build-to-Rent is likely to be high. Across the Greater Sydney region, between the 2011 and the 2016 Census, the number of households in rental stress increased from 152,000 to 185,000, up 17.5 per cent.
John said that according to research conducted by Hal Pawson et al (2019), there are four potential roles for community housing providers (CHPs) in the Build the Rent sector:
- Option 1: Fee-for-service tenancy and/or asset management for a scheme procured and owned by for-profit developers
- Option 2: CHPs undertake development projects with a Build-to-Rent component within mixed tenure schemes and using the market rent properties to subsidise affordable housing + government subsidy
- Option 3: CHPs become the designated developer of affordable housing components within market rent developments
- Option 4: CHPs take the lead developer role for an entire Build-to-Rent market scheme
Option 2 is preferred, he said, as it builds the CHP sector’s existing development capacity and can create meaningful housing supply whilst recognising the need for governments to bridge the subsidy gap.
“Based on the international experience, Build to Rent is an appealing asset class for selected population groups. As a ‘high end’ market rental product, it is not a panacea for addressing the social and affordable housing supply gap in Australia.
There is also a need to understand how the National Housing Finance and Investment Corporation (NHFIC) could potentially support the growth of Build to Rent in Australia.”
As demonstrated through numerous recent studies, a government subsidy – whether in the form of a financial incentive or discounted land – will be required to increase the supply of social and affordable housing in Australia.”