Thinking | 17 February 2020

Social and affordable housing: A Minister’s view

At a recent town hall event in Sydney, we gathered together a panel of experts to tackle critical questions around social and affordable housing. The Hon. Melinda Pavey, NSW Minister for Water, Property & Housing was one of our panellists and here she shares her thoughts on what can be done.

An excerpt from this Q&A was published in the latest issue of our Public Law newsletter.

Expected waiting times for social housing in NSW in many areas is up to 10 years. What are your plans to increase housing stock?

I deeply care about the issue of social housing in NSW and have seen in my electorate the life-changing and positive long-term outcomes that a safe and secure home can have for individuals, families and communities. I have also seen the devastating impact on people when they do not have access to housing.

One of my priorities as Minister for Housing is to not only get keys into doors for as many people experiencing hardship in NSW as possible, but to also deliver new, integrated communities where people have access to the services and supports they need to thrive.

Under the NSW Government’s policy Future Directions for Social Housing in NSW, the Land and Housing Corporation (LAHC), the agency responsible for the delivery and maintenance of social housing right across the state, will deliver up to 23,000 social housing dwellings, 500 affordable housing dwellings and an additional 40,000 private dwellings. This is an ambitious program, and I am challenging LAHC to use innovative ways to deliver new, fit for purpose social homes that are integrated into communities.

By deconcentrating disadvantaged housing estates of the 60s, we can breathe new life into local economies and deliver more jobs, provide better connections to education outcomes, improved amenities for all residents and greater access to services.

What future role can community housing providers play in the social housing sector under your leadership?

Partnering with community housing providers (CHPs) who understand the needs of their communities is a new way of doing business that is allowing Government to deliver more social housing in integrated communities in areas where homes are needed most. CHPs are typically well-established in certain geographical areas, meaning they have forged strong relationships with their communities and have tailored resident support programs. Great CHPs are part of their communities and are driving local outcomes, driving local job and skills growth and bring people together. I have been honoured to visit many of these CHPs and see the work they’ve done first hand.

As part of this partnership Government has transferred the management of a proportion of social homes to CHPs, which has already presented benefits related to driving down costs to Government in areas such as maintenance, while also allowing community housing providers to access additional revenue from Commonwealth Rent Assistance.

In the future I think we will see CHPs playing an even bigger role. There will always be some in the social housing space who may not be able to be housed by CHPs, but I think that CHPs will take on more. However, the CHPs can’t do this unless we foster that, and I think it is widely accepted that there are things the Government can do to assist CHPs grow and deliver more stock. We want to work closely with these providers to achieve this outcome.

A few years ago the NSW Government rolled out the Social Housing Management Transfer project, which effectively transferred social housing stock from Government to the social housing sector through a long-term, rent-free lease model. Do you envisage further Social Housing Management Transfers under your leadership?

Currently the Government has a target to transfer up to 35 per cent of social housing to CHPs and will continue to consider transfers where there are clear benefits. CHPs provide more than just social housing, a lot of them are active in providing affordable housing, as well as vital services and support. Tenant satisfaction levels are consistently high among those living in CHP managed social housing.

Do you have any updates for us about when the successful proponent for the build to rent model in Redfern will be announced to deliver more social, affordable and private housing?

As Minister for Housing I’m really interested in Build to Rent and how we can make it a new asset class, not just in NSW but also in Australia. With about a third of renters in NSW renting by choice, and an increasing number of renters in NSW we need to think about how rentals work in NSW.  We need to learn from overseas experience, where institutional ownership and management of rental accommodation is growing and integrated into being part of global cities.

I have spoken with many people from industry, and I understand the challenges of getting Built to Rent up and running in Australia. I am talking with my Ministerial colleagues about how the NSW Government can facilitate this asset class, because as your readers will know Built to Rent in other jurisdictions has grown because of active Government support.

The Redfern project is an exciting pilot, and we have been working closely with the consent authority for the project, the City of Sydney, and we look forward to making an announcement in the coming months.

What does the future hold for the current trend towards PPP style projects in the social housing sector, such as the Social and Affordable Housing Fund?

The SAHF is administered by the Department of Communities and Justice, which sits under Minister Ward. Questions about that fund are more appropriately addressed by him.

What I can say is, LAHC is continuing to explore these types of financing structures and other new approaches to the delivery of more social housing and what role they can play in de-clustering our existing estates.

Developing ways to make every dollar we invest in social housing go further is critical to ensuring we continue to replace existing old stock with new homes that are well located and sized appropriately, and so we can house more people in need.

We may look to explore some similar options over time.

What is your vision for reducing the high costs of PPP style projects in the social housing sector?  Could Government support be made available to not for profit providers to assist them in these transactions?

We believe that there are great opportunities to partner with CHPs in PPP style projects. Historically the PPP terminology has had many meanings for many people so I don’t want to be too specific about what is and what is not a PPP, but I do want to be clear that we recognise that we cannot deliver the future required housing stock on our own, and we want to facilitate greater relationships with CHPs, builders, financiers and Councils to deliver these outcomes.

We no longer want communities that you drive down a street and can see which houses are social housing low quality products and which are private dwellings. We want to normalise our products and salt and pepper the tenants in the communities, and partnering with other providers is the only way we achieve this.

What incentives would you like to see Government deliver to stimulate growth in social housing stock?

Moving forward we need to work more closely with the Federal Government to harness the opportunities they provide.

NHIFIC has been revolutionary in their forward thinking strategy to provide the enablers to future stock through concessional loans, grants and equity finance to help support critical housing-enabling infrastructure.

I feel making sure there are safe homes for those Australians in need of some support is not just a State Government issue, it is an all levels of government responsibility. I am talking regularly with my colleagues in Canberra and local Governments to achieve this.

What role do you think local councils have in stimulating the creation of additional social housing? How can local councils be incentivised to utilise surplus land for this purpose?

Local councils are an important partner for the NSW Government in bringing forward the delivery of new social housing. The biggest challenge is conceptually there is always alignment, we all agree that we need to provide more and better social housing. But when you get down to the detail i.e. which street, what form, and how we manage asset recycling in response to the Government’s ageing social housing portfolio, then it becomes a little more challenging.

How do you think the introduction of the NHIFIC has transformed the sector and what do you see will be the NHIFIC’s future role moving forward?

NHIFIC has been an important financing tool to help bring forward the delivery of key social housing projects.

NHIFIC funding serves as an important enabler to help CHPs deliver new housing and moving forward, we believe we need to be more strategic as to how we work with the Commonwealth to maximise its effectiveness.

Are the Apartment Design Guidelines well suited to social housing stock?  Might we see a customised guideline for social and affordable housing in the future?

LAHC uses a range of policies and guidelines to inform the design of its social housing dwellings, including the Apartment Design Guide (ADG) and SEPP 65, the Seniors Living Policy Urban Design Guidelines and the Low-Rise Medium Density Housing Code.

The new homes being delivered by LAHC use internationally recognised architects and adhere to best-practice urban design, and many have won design awards over the years.

LAHC undertakes rigorous independent reviews of its projects to ensure its social housing stock is high quality, fit for purpose and supports improved social outcomes.

Whilst we want to ensure that our homes are fit for purpose, working with the planning Minister we also want to ensure that our planning system is fit for purpose. At this point in time we feel that a new customised design guide is not necessary as the existing design guides and practices are current to social, affordable and private markets and are sufficiently flexible to facilitate our developments of fit for purpose dwellings.

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