affordable housing symposium 2018 - griffith.edu.au · department of housing and public works 8...

Affordable Housing Symposium 2018

Professor George Earl

Chairman, NAHC

Welcome and Introduction

Professor Fabrizio Carmignani

Dean (Academic), Griffith Business School

Opening address

Trish Woolley

Deputy-Director General, Housing, Homelessness and Sport

Department of Housing and Public Works

Keynote

Affordable Housing Symposium 2018

Trish WoolleyDeputy Director-GeneralHousing, Homelessness and SportDepartment of Housing and Public Works

Queensland Housing Strategy 2017-2027Our Objective

Department of Housing and Public Works 6

Queensland Housing Strategy 2017-2027Our Focus


PresenterPresentation Notes


Housing Construction Jobs ProgramYear 1 Summary

EOI engagement sessions held across the state

Local developers, builders and community housing providers attended sessions

Proponents registered interest (across several locations)

39 development ready proposals59 proposals suitable for future development

786 commencements


Department of Housing and Public WorksFor more information, call the Queensland Government

Call Centre on 13 QGOV (13 74 68) or visit www.qld.gov.au

Professor Hal Pawson

Housing Research & Policy and Associate Director

City Futures Research Centre, UNSW

International scene setting

Build to Rent: International Scene-setting

Hal Pawson, City Futures Research Centre, UNSW

Presentation to: Affordable Housing Conference, Brisbane, 9 Nov 2018

Presentation overview1. Drivers of growing Australian BtR interest

2. US multi-family housing

3. The UK build-to-rent sector

4. Conclusions

Draws on NSW Landcom-sponsored research (incl. contribution from LSE London)

Drivers of growing Aus interest in BTR

• Primarily market-led: changing attitudes of developers and financial institutions (potential investors)

• Rental housing returns – risk-adjusted – increasingly attractive – ‘yield compression’ in other asset classes

• Longer-term trends: more LT tenants; lifestyle aspirations increasingly to the fore

• Shorter-term development: awareness of peaking demand for traditional developer BTS product

• Aspiration for BTR as vehicle for affordable housing

• Inspiration drawn from overseas markets

US multi-family housing (1 of 4) • Multifamily housing, US term for residential

buildings containing 5+ rental apartments

• Residential blocks built as income-generating assets to be held in single ownership for the long-term

• 20M rental apts in multi-family blocks

• 6.3M built in past 25 years

• Typical annual build rate approx. 300K

• Additionally, approx. 100K p.a. LIHTC program – subsidised affordable housing for low-moderate income earners

0

50

100

150

200

250

300

350

400

450

Hou

sing

sta

rts

Multi-family (000s) LIHTC (000s)

US multi-family housing (2 of 4)• Highly developed industry; interlocking

set of stakeholders

• Property developments highly tradeable between asset holding entities

‘Pinnacle is a privately held organization that manages multifamily properties nationwide…Our clients [i.e. property owners] include pension funds, private partnerships, international investors, insurance companies, lenders, special servicers, syndicators, government agencies and high net worth individuals’ Pinnacle: Capstan Village, Vancouver (under construction)

US multi-family housing (3 of 4) • Latterly new housing ‘targeted to

higher-income households and located primarily in high-rise buildings in downtown neighborhoods’

• New multifamily apts increasingly in large buildings with many amenities:− ‘nearly half’ of rentals completed in 2016

in buildings with 50+ units – 13% in 1999

− 86% of 2016 new apts in properties with swimming pools – up from 69% in 1990

Source: Harvard University: State of the Nation’s Housing 2018 Angel’s Dream Castle, Los Angeles (built 2013)

US multi-family housing (4 of 4)• Aus developers have picked up on many aspects of

US multi-family product:

− Large apartment complex – min 200 units

− Primarily but not exclusively studios/1beds

• More space than in trad apartment blocks for:

− Extra services – e.g. gyms, libraries, dog-walking areas, yoga classes

− On-site management functions – e.g. leasing suites, community manager offices

− Traffic – e.g. wider corridors, goods lifts, loading docks for deliveries, removalists

• Implies need for special BtR design code Church and State, Cleveland (under construction)

UK build to rent housing (1 of 7)• Rapid recent PRS growth – as in Aus

• Also like Aus, vast bulk involving individual investors

• Longstanding Ministerial aspirations to engage institutions as equity players

• Several failed govt efforts to promote from 1980s onwards

• Similar barriers to Aus – especially:

− Inadequate returns

− Novelty of rental housing asset class Sources: ABS (2017) Survey of Housing Occupancy and Costs; DCLG (2017) English Housing Survey

0

5

10

15

20

25

30

PR

S a

s %

of a

ll ho

useh

olds

Australia England

UK build to rent housing (2 of 7)• Rapid BtR take-off (from zero) post-2012 • Initially stimulated by UK Govt promotion:

− Debt guarantee (income guarantee in Scotland)

− Revolving fund

• Post GFC housing market recession: cheap site acquisition opportunity

• Strong demand for new rental product• By Q4 2018:

− 68K units built or under construction

− 64K units with planning approval

• Initial London focus now diversified – 50% now non-London Source: British Property

Federation website

UK build to rent housing (3 of 7)

Source: British Property Federation website

UK build to rent housing (4 of 7)Key BtR proponents include:

• US and Canadian companies experienced in multi-family business

• UK pension funds, insurance companies

• NFP housing associations (business diversification)

• Local councils (scope for landbank exploitation)

Fizzy Living: Hayes, West London

UK build to rent housing (5 of 7)• Physical product:

− Ranges from premium quality to fairly basic

− No necessary expectation of extensive ‘add-on’ amenities

− BPF stats include some blocks not strictly speaking designed as BtR

− Generally but not exclusively medium-high density apartments

• Market targeting: mainly millennials –some through exclusion from home ownership

Sigma Capital, North of England (council estate renewal)

UK build to rent housing (6 of 7)BtR in urban regen projects:

• Many larger UK regen schemes now include a BtR component

• Valued esp because ‘faster market absorption’ than trad BtS devmts

• Sites can be ‘built out’ more quickly

• Can help ‘activate’ large sites in early phase of longer projects

Legal & General, Bristol city centre regeneration project

UK build to rent housing (7 of 7)Affordable housing in BtR schemes:

• London BtR schemes expected to incorporate ‘affordable housing’ just as for market sale devmts

• Provider preference for ‘DMR’ product retained in scheme proponent ownership

• No designated ‘affordable units’

• Trade-off between small number of highly discounted flats or larger number of moderately below-market units

• Ealing Rehearsal Rooms: 173 unit scheme incl. 30 DMR units

M&G Rehearsal Rooms, Ealing, West London

BtR in Australia: first tranche (mainstream market) projects publicly announced as at Q4 2018

Developer Project name and location Size and form Status as at Q4 2018

Grocon ‘Parklands’, Gold Coast, Qld 1,252 units (CG athletes village)

Development complete, BtR operations from 2019

Grocon Southbank, Melbourne 410 units Approved, yet to commence development

Grocon St Leonards, Sydney unknown Approved, yet to commence development

Sentinel ‘Element 27’, Subiaco, Perth 360 units Under construction

Mirvac ‘Indigo’, Sydney Olympic Park 257 units Under construction

Salta Docklands, Melbourne 260 units Under constructionSalta ‘Victoria Gardens’, Richmond, Vic 426 units Approved, yet to commence

Gurner South Melbourne, Vic 128 units Proposed, yet to be approved

Meriton Various Sydney sites Total approx. 6,000 units In operation

Conclusions• BtR contributing to PRS growth in a number of countries – France, Germany & Japan, as

well as UK and USA

• But widely varying scales – UK BtR will remain only a small element of PRS in mid 2020s even at current rates of growth

• UK and Aus instructive comparison because recent interest substantially driven by yield compression in other asset classes

• Notable that UK sector expansion accompanied by diversification (geography, product type, market targeting)

• But current market conditions and policy settings may be less favourable in Aus (except perhaps for studio apartment blocks)

• Even a thriving Australian BtR sector holds out no prospect of a significant ‘free’ contribution to affordable housing supply – that remains dependent, as ever, on public subsidy

MORNING TEA

10.10am to 10.30am

Plenary Session 1 - Government, industry and community approaches to build-to-rent: Are we there yet?

Michael Zorbas Group Executive, Policy & Advocacy, Property Council of Australia

Eloise AtkinsonChair Brisbane Housing Company and Director Deicke Richards

Facilitator: Mike Myers, NAHC

Eloise AtkinsonChair, Brisbane Housing Company and

Director Deicke Richards


Michael Zorbas

Group Executive, Policy & Advocacy,

Property Council of Australia


Questions for the panel

Michael Zorbas Group Executive, Policy & Advocacy, Property Council of Australia

Eloise AtkinsonChair Brisbane Housing Company and Director Deicke Richards

Facilitator: Mike Myers, NAHC

Plenary Session 2 - Build-to-rent and the development sector: How is BTR different from build-to-sell and how could developers best respond?

David Rees Regional Director, Asia Pacific Research Strategy Jones Lang Lassalle

Associate Professor Leigh ShutterSchool of Engineering and Built Environment, Griffith University

Dr Henry Skates School of Engineering and Built Environment, Griffith University

Facilitator: Professor George Earl, NAHC

Associate Professor Leigh Shutter

School of Engineering and Built Environment,

Griffith University


Build-to-rent and the development sector: How is BTR different from build-to-sell and how could developers best respond?

Leigh ShutterSchool of Engineering and Built Environment / Griffith University 09 November 2018

• Australian society is changing and has changing housing demands

• the demographic characteristics of the build-to-rent market are different to the build-to-sell market

• developers need to better understand and engage with the different demographic and groups of the build-to-rent market

• provide more diverse and considered accommodation

• understand and engage with the opportunities of the new ‘share economy’

• new typologies, with changing physical and spatial requirements

David ReesRegional Director – Research

Friday 9 November 20182018 Affordable Housing Symposium, Brisbane

Build To Rent and the Development SectorHow is BTR different from Build to Sell and how could developers best respond?

1. Build-to-Sell (strata title) has been a 70-year win-win success storyTenants – choice, affordability, availabilityLandlords - low and stable vacancy, high and counter-cyclical tax effective investment returnsA unique confluence of trends and factors has supported this

2. The message for BTS investors – lower returns in the futureEconomic – low inflation, low (not falling) interest rates, possible tax changesInfrastructure, planning and IT – new urban dynamics and location rankingsChanging population profile – where is the growth in rental demand?

3. The message for developers – the future is differentTenant demand changing and diversifying – variety of apartment types, new services, flexible lease structuresBTS will be less attractive to investors, BTR increasingly competitiveBTR better placed to meet emerging demand

The way we live nowDeclining home ownership – a global trendRental market - 30% of Australian households29% of all Aust. children live in rented accommodation Cottage industry – avg. landlord owns 1.7 properties15% of taxpayers declare rental income

Proportion of Australians Renting

* AHURI

Renter households by household type and landlord type*

Strata title - a 70-year success story…

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Residential Vacancy Rates (1980-2017)

Sydney Melbourne Brisbane

0200400600800

1000120014001600

Sep-

1972

Nov

-197

4Ja

n-19

77M

ar-1

979

May

-198

1Ju

l-198

3Se

p-19

85N

ov-1

987

Jan-

1990

Mar

-199

2M

ay-1

994

Jul-1

996

Sep-

1998

Nov

-200

0Ja

n-20

03M

ar-2

005

May

-200

7Ju

l-200

9Se

p-20

11N

ov-2

013

Jan-

2016

Index: Rents and CPI - Sep 1972=100

Sydney Melbourne Brisbane CPI

% p.a. Sydney Melbourne Brisbane CPIRent Wages Rent Wages Rent Wages

1972-2017 6.1% 5.4% 5.0% 5.3%2000-2017 3.6% 3.2% 2.9% 3.2% 3.5% 3.3% 2.7%

Rent closely aligned with wages and prices (1972-2017)Vacancy stable around 2% - 5% (1980-2017)Limited regulatory overlay

…with generous rewards for private landlords

Strongest performing investment sector long-term (1995-2015)• 10.6% pa gross• High returns pre- and post-tax• High or low marginal tax rates

Rewarding for superannuation investors too (9.7% pa)• Shares (9.1% pa) • Listed property (6.9% pa)• Australian bonds (5.7% pa)

Returns heavily weighted to capital gains

Is this sustainable?

Before and after returns*20 years to December 2015

*Source: ASX and Russell Investments, 2016

Changing drivers – infrastructure, urban density

Low urban density + population growth + low infrastructure spending = Long travel timesLong travel times + wage growth = Rising location premium (steep inner city price gradient)Rising location premium + falling interest rates + inflation = Strong capital growthCapital growth + high marginal income tax rates + negative gearing = high post-tax returns (and low yields)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

$ million

Sydney Metro City and Soutwest(Stage 2 of Sydney Metro)

Melbourne Metro

Sydney Metro West

Sydney Metro Northwest (Stage 1 of Sydney Metro)

Cross River Rail

WestConnex

Regional rail link

SW rail link

West Gate Tunnel

Hunter Expresswa

y

North East Link

M12 Motorway

ForecastNorthern Road

Upgrade

Toowoomba Second Range

Crossing

NorthLink WA

Gateway North Upgrade

Major transport infrastructure projects 2012-22*

*Macroplan, DAE

Changing drivers - economic

End of an era? Capital growth requires falling, not low, interest rates + high inflationSteeply rising marginal tax rates drive negative gearingBUT benefits are less when inflation/interest rates, growth are lowPLUS possible policy changes to CGT and negative gearing

0

2

4

6

8

10

12

14

16

18Percent Nominal and Real Interest Rates

10-year nominal bonds Inflation-indexed bonds

0%

10%

20%

30%

40%

50%

60%

0 25 50 75 100 125 150 175 200 225 250 275 300Income ('000 AUD)

Marginal Income Tax Rates

US UK Australia CanadaGermany NZ Sweden

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,0000 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99

Australian Population by Age

2018 2028

Gen Z Millennials(1983-2004)Gen X

(1965-1982) The Baby Boomers(1946-1964)

Upgraders, families (Age 34-44)+1.14m next 10 yrs

Apartment Renters (Age 25-34)+0.68m next 10 yrs

Empty Nester Downsizers (Age 60-75)+1.46m next 10 yrs

Changing drivers – population: bumpy road ahead

Source: Source: ABS, JLL research© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.

In summary

For investors in strata title - headwinds:Economic, infrastructure, planning and tax policy changes will likely reduce future investment rewardsThe strata system will grapple with emerging requirements:

Flexible lease structures as tenant profiles changeSlower growth in entry-level standard apartment demandAdd-on services – security, recreation, child-care, home delivery,

Developers will need to considerWho is the customer – the investor (BTS) or the tenant (BTR)?Changing tenant profiles and longer rentals imply a diverse product offering– bedrooms, public areas, storage, parking…Long-term investment returns, niche markets

The strata title system will continue to provide the bulk of rental accommodation in Australia in the foreseeable future, but…

47%

46%

25%

19%

18%

12%

12%

12%

10%

6%

4%

0%

0 10 20 30 40 50

Switzerland

Netherlands

US

Japan

Finland

Germany

Sweden

France

Denmark

Canada

UK

Australia

Percent

Filling the gap? The missing $40 billion asset class

‘Back of the envelope’ calculations

• Total Australian residential market = $6.6 trillion

• Total Australian commercial ‘investable universe’ = $1.4 trillion, of which, around 28% (or ~$392 billion) is institutionally owned

• So if residential were 10% of institutional portfolios now, Multifamily would be ~$40 billion (which translates to only 0.6% of current residential stock)

Residential as % of institutional real estate exposures

Source: LaSalle Investment Management

Dr Henry Skates


Griffith University


Passive Solar Design Build to Rent

Dr. Henry SkatesGriffith University

Overview

WHAT IS PASSIVE SOLAR DESIGN?

WHY IS IT IMPORTANT? NZ CASE STUDY… IS IT RELEVANT TO AUSTRALIA?

What is Passive Solar Design?

NOT ROCKET SCIENCE NOT PHOTOVOLTAIC VOLTAIC (PV) PANELS

NOT AN AFTER-THOUGHT!


Use normal features of the building

Collects (or rejects) free energy from the sun (Climate Specific)

Use free ventilation


OPTIMIZING SITE LAYOUT AND BUILDING ORIENTATION

OPTIMIZING ENERGY EFFICIENCY OF BUILDING ENVELOPE

(INSULATION)

OPTIMIZING GLAZED ELEMENTS TO HEAT AND COOL (20% FLOOR

AREA MAX?)


Build tight (control ventilation heat-loss / heat-gain)

1Insulate right (control building envelope heat-loss / heat-gain)

2Use and/or refuse direct sunlight (use free heat only when wanted)

3

Why is it important?

IT CAN BE ACHIEVED FOR LITTLE OR NO

ADDITIONAL CAPITAL COST

IT WILL LOWER RUNNING COST FOR

TENANTS

IT WILL PROBABLY LEAD TO IMPROVED

TENANT SATISFACTION

IT MAY CONTRIBUTE TO IMPROVED TENANT

HEALTH

IT WILL HELP FUTURE-PROOF NEWBUILD HOUSING STOCK

IT WILL LOWER AUSTRALIA’S

GREENHOUSE GAS EMISSIONS

IT MAY PERMIT GREATER RENTAL

RETURNS

Case Study - AHURI report 22 August 2018

• Minimum standards for rental properties introduced in NZ in 2009 (Warm up New Zealand: Heat Smart) to protect the health of vulnerable tenants.

• NZ $340 million investment for installing insulation and heating had a net benefit of NZ $951 million (when health and energy results were combined with analysis of industry impacts and employment changes)

• Australia should carefully consider the net benefits of legislating for and investing in the inclusion of significant passive solar design measures in build to rent housing stock (research needed).

AHURI – Australian Housing and Urban Research Institutehttps://www.ahuri.edu.au/policy/ahuri-briefs/when-it-comes-to-rental-property-standards-what-can-australia-learn-from-new-zealand


David Rees Regional Director, Asia Pacific Research Strategy Jones Lang Lassalle

Associate Professor Leigh ShutterSchool of Engineering and Built Environment, Griffith University

Dr Henry Skates School of Engineering and Built Environment, Griffith University


LUNCH

12.20pm to 1.00pm

Plenary Session 3 - Institutional investors: Will institutions fund BTR in Australia? What needs to happen to scale up BTR supply?

Nils MillerInfrastructure Finance & Investment, Investec

Chris MenzGroup General Manager, Commercial and General

Ryan RathborneAssociate Director, Clean Energy Finance Corporation

Facilitator: Professor Mark Brimble, Griffith Business School

Chris Menz

Group General Manager,

Commercial and General


Nils Miller

Infrastructure Finance & Investment,

Investec



Nils MillerInfrastructure Finance & Investment, Investec

Chris MenzGroup General Manager, Commercial and General

Ryan RathborneAssociate Director, Clean Energy Finance Corporation

Facilitator: Professor Mark Brimble, Griffith Business School

Concurrent Sessions – 2pm to 3pm

Session 1 - Affordable housingFacilitator: Professor Eduardo Roca, Griffith Business School Location: Connaught Room

Session 2 - Other dimensions in affordable housingFacilitator: Dr Benjamin Liu, Griffith Business School Location: Norfolk Room

Session 3 - Towards an action plan for build-to-rent in QueenslandFacilitator: Mike Myers, NAHCLocation: King George Room

Dr Steven Curry

Senior Research and Policy Officer,

Consumer Policy Research Centre

Build-to-rent an invitation in housing policy or an admission of market failure?

70

2018 Affordable Housing SymposiumBuild to Rent:An innovation in housing policy, or an admission of market failure?

Dr Steven Curry9 November 2018

71

The BTR Debate in Australia

Introduced by industry• A supply-side response to “affordability”• A new asset class for investors• An improvement to the customer experience

Housing sector response• An opportunity for improving social housing supply• An opportunity to leverage emerging asset and place management

expertise

Government response• Opportunity to leverage existing land assets (e.g. Communities Plus

NSW)• Lack of appetite for tax or regulatory change (e.g. GST and

investment trust treatments)

72

BTR – conflicting narratives

There is not a single “BTR debate” in Australia

• Industry interests diverge depending on the actor• housing affordability response vs a “lifestyle choice”

• Government responses vary too• PPP opportunity vs threat to home ownership

• Sector responses• Social housing expansion vs expanding privatisation of housing

73

The Rental Outcomes Matrix

What do renters want?

The renter voice is absent from the debate.

The Rental Outcomes Matrix is an opportunity to understand what the most important participants in the rental housing market want, what problems they are trying to solve, and what solutions actually map onto those problems.

Adapting customer journey mapping, market segmentation and customer persona profiling techniques to public policy analysis.

74

Divergent Segments

BTR can and may target distinct segments:

• Low income households (historically clients of public housing)

• Young people (renting as a transitional stage)

• “Generation rent” (including emerging demographic of older renters)

• High income, career-mobile households

• Emerging market for adaptive housing

75

Different Built Forms

When targeting different segments BTR is likely to generate different built forms and community structures:

• Small apartments and co-living

• High rise#

• Low and medium rise mixed communities

• Low and medium rise private housing*

So we must ask “which BTR, and for whom?”

PresenterPresentation Notes#The most likely outcome in the Australian sector due to the interest of major developers and large institutional investors.*A common element of American family housing, but not likely to emerge in the Australian market. (Think small blocks of flats common in the Australian strata title sector, but with a single owner.)

76

The Risks

• Acceptance of “generation rent”

• Structural factors that retard transitions to home ownership• e.g. if mix of housing stock shifts• e.g. if higher rental costs reduce savings capacity

• Lack of focus on broader structural factors impacting long-term interests

• Inter-generational wealth transfers may increase if older people benefit from investments

• Retirement savings models predicated on home ownership

• Market bifurcation – commercial BTR will focus on higher-value segments

• Emergence of large PPP/social housing segment may create a deeper social divide

• Crowds out other development and tenure types, like cooperative and shared equity models

77

To Consider …

• Housing aspirations across segments may misalign with BTR potential• Lower income people do desire more stable, affordable and

higher-quality rental housing but may not be attractive to commercial BTR

• Younger and more mobile people may not wish to pay for higher-quality housing if they are seeking transition to home ownership (or may be forced to pay higher rents)

• High income mobile households may not be sufficient to sustain large BTR segment

• Policy debate needs to broaden to encompass larger systemic challenges

• Retirement saving and income support system• Public support for vulnerable consumers and those with special

needs• Public/cultural transformation of values – i.e. “the Great Australian

Dream”

78

Market Failure and Social Opportunity

• “Market failure” here means three things:• Apparent inability of existing rental market to address need

(despite tax incentives supposed to stimulate PRS)• Apparent inability to deliver affordable home ownership in

economically sustainable way• Potential for BTR to not deliver on its promise

• Importance of recognising that consumer segmentation requires segmented policy response

• Be clear about development of different BTR models in parallel

• Policy debate about desirability of:• Large social housing and cooperative sectors• Addressing relationship between alternative housing and viability

of commercial models of home tenure (rental and ownership)• Potential for NFP BTR to address diverse housing needs

Associate Professor Leigh Shutter


Griffith University

Micros housing: A new affordable design typology

Prince Acheampong

PhD Candidate,

Griffith University

Rethinking housing affordability measurement based on ‘the whole of life approach’: Evidence from the ISAAC region

Rethinking Housing Affordability Measurement

Based On “The Whole of Life Approach”:

Evidence from the ISAAC Region

PRESENTER:

PRINCE ACHEAMPONG (s5118296)

DOCTORAL CANDIDATE,

(BSc., MBA, MPhil, CA.)

A PROUD RECIPIENT OF THE GU-NAHC CO-FUNDED SCHOLARSHIP

Supervisors

Professor George Earl

Professor Eduardo Roca

Ass/Prof. Richard Chung

Dr. Benjamin Liu

Introduction

Housing Affordability Measurement-

Research Gap

Methodology

Results

Conclusion

Introduction

Housing affordability is an important contemporary issue.

Housing affordability has been affected by recent house pricebooms and suspected bubbles.

Globally, Urban Housing has become very expensive for manyhouseholds particularly for those within the low and middle incomethresholds (Wetzstein, 2017)

As many as 330 million households are unable to afford urbandwellings (Woetzel et al., 2014)

Current estimates are that 440 million households or 1.6billion people will be under housing stress by 2025 should thecurrent trend continue.

Evidence from Australian Bureau of Statistics(ABS)suggests that Australia also faces rental housing affordability Challenges.

Private Renters’ Median Housing Cost Ratio (HCRs) and Percentage Paying More than 30 Per Cent of Gross Household Income: Bottom 40 Per Cent of Income Distribution

0

10

20

30

40

50

60

70

80

1982 1990 1996 2000 2002 2007 2009 2011 2013

HO

USIN

G C

OST

S RA

TIO

(%)

PERIOD

Mean HCR > 30% Household Income

240,000 households on waiting list for publicand community housing (Earl, 2017)

Similar situation in private rental sector.

Whiles we all recognise the urgent need to resolve this housing affordability problem,

We ask the seemingly simple but complex question “Where do we start from”?

Housing Affordability-Meaning

the relationship between income and housing costs (e.g. mortgage and rental costs, etc.),

that affords the household the opportunity to meet its other essential needs.

Three forms of housing affordability has been identified in the literature

Purchase affordability - whether a household can borrow enough funds to purchase a house

Repayment affordability - the burden imposed on a household of repaying the mortgage

Income affordability - the ratio of house prices to income.

Housing Affordability-Measurement

Housing cost approach

This approach simply looks at housing affordability as the measure of the ratio between what households pay for their housing and what they earn.

A ‘rule of thumb’ standard of no more than 25% - 30% of household monthly income being spent as monthly housing cost is deemed appropriate and affordable

Residual income method

Calculates affordability as what is left, after other necessary household expenditure (Henman and Jones 2012; Burke et al. 2011)

If there is insufficient residual income left for housing costs, then a household is considered to have an affordability problem.

considers information about taxation and household expenditures (in addition to income and housing costs)

Quality Adjusted Approach

Is concerned with the quality of housing and its appropriateness to the households living in it.

It distinguishes households that have too little income to rentminimally adequate but decent safe housing for less than thespecified (30%) of income from households whose income isadequate to bear such costs.

Budget Standard Method

Represents ‘what is needed, in a particular place at a particular point in time, to achieve a specific standard of living’

An examination of ABS Household Expenditure Survey to establish a weighting measure and cost of items in a household expenditure budget.

It relies on judgements of researchers and focus group discussions to establish the amount needed by different household formations to meet basic housing and non-housing costs.

Combined Housing and Transportation (CHT) model

(Morrissey & Karuppannan, 2012; Mattingly & Morrissey, 2014; Viggers & Howden-Chapman, 2011 etc. )

The Research Gap

All the above measurement methods relies mostly on the economic aspects of housing affordability

No mention is made of the cultural aspect of the households.

This cultural dimension reflects the lifestyle of the households and thus, influences their expenditure on other non-housing related cost.

This ultimately, impact on their housing affordability.

Our Innovation-the Whole of Life approach to

measuring housing affordability

the whole of life approach, tries to encapsulate all the relevant household and non-household living cost into a single model for housing affordability

This has not been used in any study, at least to the best of our knowledge.

Study Methodology

Data & Coverage

a range of secondary data sets covering the Isaac Regional Council LGA and the communities that make up the recently amalgamated LGA (2008) are used.

Social and Economic Data

Market Housing Data

Affordable Housing (NRAS) Data

Government or Social Housing and Community Housing Data

Workforce Accommodation Data are sourced from ABS and other relevant databases.

Post Codes

there are twenty-seven (27) communities in the Isaac Regional Council LGA, divided into twelve (12 postcodes),

eight of these post codes (4705, 4707 4721, 4739, 4741, 4742, 4743 and 4753) have had little or no recent real-estate activity.

As a result, data from the following post codes were analysed.

4721: Belyando, Clermont, Elgin, Frankfield, Kilcummin, Laglan, Mistake Creek, Winchester

4744: Moranbah

4745: Dysart

4746: Middlemount

we first use the traditional 30% of Household income to measure housing affordability.

applied to median and 4th quartile income and costs.

These ratios are computed for various locations

Isaac Regional Council LGA Post Code 4721, Post Code 4744, Post Code 4745 and Post Code 4746

Results

• Isaac LGA and associated post codes population/s have declined while the whole of Queensland has experienced growth

• Isaac LGA male population has declined at about two (2) times the rate as female

• If we look at the whole of Queensland & Isaac LGA population data we see almost a 16% variation

Population

Household Formations Percentage 2011-2016 Change Marital Status & Family Composition

Location Whole of Queensland

Isaac LGA Post Code 4721

Post Code 4744

Post Code 4745 Post Code 4746

Marital Status

Married 7.29% (11.93%) (13.35%) (6.54%) 125.66% (13.04%)Separated 17.94% 12.65% (10.74%) 9.38% 85.29% 34.43%Divorced 12.62% 3.90% Incl. above Incl. above Incl. above Incl. above

Widowed 6.46% 0.00% (41.82%) 2.67% (0.77%) (25.00%)Never Married 11.80% (5.06%) (15.16%) (2.44%) 189.63% 6.70%

Family CompositionCouple Family without Children

6.26% (12.04%) (13.49%) 6.70% (17.08%) (27.15%)

Couple Family with Children

5.56% (15.85%) (18.24%) (11.56%) (19.11%) (7.72%)

One Parent Family

9.08% 11.31% (6.67%) 14.53% 59.26% 33.33%

Other Family 2.94% (28.21%) (33.30%) 5.56% (40.00%) (100.00%)

Queensland growth in almost all categories ranging 6-10% while at the same time IRC,LGA declined in the region of 12-15%

IRC,LGA experienced a major decline of 24% in group households, this is most likely as a result of the post mining boom construction period and most existing group formation residing in worker accommodation camps

Marital & family households again grew across all categories in the whole of Queensland , whereas there were major declined in IRC,LGA in the region of 12-28%

Household Employment Household Employment Percentage 2011-2016 Change Conclusions



Post Code 4744 Post Code 4745

Post Code 4746

Employment Types:

Employed, worked full-time (35hr or more)

2.32% (19.21%) (24.10%) (14.75%) (20.95%) (14.61%)

Employed, worked part-time 13.16% (7.02%) (16.18%) 2.90% (14.40%) 2.06%Employed, away from work (Hrs not stated)

(10.81%) (25.46%) (16.34%) (20.61%) (26.40%) (21.18%)

Unemployed, looking for work 33.28% 112.76% 85.71% 90.76% 124.56% 130.77%

Employment: Hours Worked

1-15 hours per week 10.92% (9.27%) (19.75%) 12.21% (20.83%) (2.88%)

16-24 hours per week 11.93% (9.98%) (9.37%) (1.08%) (18.44%) 1.05%

25 -34 hours per week 16.34% (2.47%) Incl. in above Incl. in above Incl. in above Incl. in above

35-39 hours per week 11.10% (1.15%) Incl. in above Incl. in above Incl. in above Incl. in above

40 hours or more (1.15%) (21.42%) (29.07%) (17.30%) (20.77%) (15.61%)

While FT and high level PT employment rose across Queensland there were major declines in all categories in the IRC,LGA, with unemployment rising by over 100%

35 Hours or more of work in the IRC,LGA declined by an aggregated 24%



Post Code 4744

Post Code 4745

Post Code 4746

Owned Outright 5.08% (21.37%) (13.30%) (19.67%) (34.72%) 0.00%

Owned with Mortgage 4.60% (5.97%) (5.42%) (14.98%) (1.06%) 100.00%

Rented 10.34% (2.77%) (14.93%) 11.33% 9.92% (6.80%)

Other Tenure Type 8.81% (35.29%) (50.00%) 2.63% (71.43%) 0.00%

Tenure Type not Stated 21.14% 29.73% N/A N/A N/A N/A



Post Code 4744

Post Code 4745

Post Code 4746

Occupied Private Dwellings 7.08% (6.98%) (11.13%) (2.02%) (5.62%) (7.22%)Unoccupied Private Dwellings

9.93% 54.98% 9.54% 53.63% 47.67% 80.19%

Separate House 4.47% (9.09%) (11.69%) (5.59%) (9.80%) (9.30%)

Semi-Detached, Row or Terrace, house, townhouse etc

35.20% 14.74% 20.00% 26.75% 128.57% 900.00%

Flat or Apartment 2.79% 67.58% 4.76% 473.33% 172.73% (80.56%)Other Dwelling (14.14%) (50.55%) (44.62%) 60.30% (51.61%) (76.92%)None (bedsitters) (4.26%) (24.19%) (40.00%) (9.52%) (57.14%) (100.00%)1 bedroom 8.69% (30.49%) (18.37%) (27.44%) (71.79%) (100.00%)2 bedrooms 5.60% 6.99% (3.45%) 5.29% (55.66%) 35.90%3 bedrooms 1.04% (13.38%) (14.26%) (4.21%) (74.24%) (11.49%)4 bedrooms or more 13.42% (0.14%) (11.52%) 0.77% (52.64%) (10.87%)number of bedrooms not stated

39.12% 34.43% N/A N/A N/A N/A

Household Tenure Percentage 2011-2016 Change Conclusions

decline Key areas of note in household tenure are26%+ aggregated decline in home ownership

Other Tenure decline of 35% (as result as previously observed of the post mining boom construction phase)

Home ownership rates in the IRC,LGA are about 55% of the whole of Queensland rate, almost equate to the higher rate of rental tenure in the IRC,LGA when measured against the whole of Queensland

Household Income



Post Code 4744

Post Code 4745

Post Code 4746

Median total personal income ($/weekly)

12.44% (2.09%) 9.80% 19.56% (12.10%) 41.70%

Median total family income ($/weekly)

14.32% (11.46%) 19.00% 18.94% (7.80%) 35.60%

Median total household income ($/weekly)

13.52% (17.10%) N/A N/A N/A N/A

percentage below $650 gross (%) (14.47%) 14.85% (11.11%) (17.65%) 36.40% (365.12%)

percentage above $3,000 gross 41.18% (0.36%) 3.47% 37.39% (21.70%) 57.80%

Rental Costs

Median mortgage repayment ($/monthly)

(6.32%) (20.24%) (1.01%) (1.52%) (26.85%) N/A

Median rent ($/weekly) 10.00% 40.63% (120.00%) (243.75%) 46.67% (602.13%)

Households with rent < 30% of Household Income

(1.02%) 1.80% 3.63% 3.01% 1.70% 6.40%

Households with rent greater > = 30% of Household Income

7.56% (31.48%) (113.33%) (82.86%) (33.00%) N/A

Households with Mortgage repayment < 30% of Household I

3.65% 0.31% 10.09% 9.73% (2.46%) 8.80%

While the IRC,LGA has experienced significant declines in various classifications measured against the whole of Queensland, it still has median household and family incomes greater than the whole of Queensland (family ($2,365 per week IRC,LGA v $1,661 per week whole of Queensland

Housing costs has declined by a rate significantly greater than the whole of Queensland (20% decline in IRC,LGA v 6% decline in the whole of Quensland), although rental costs have grown by 40% in the IRC,LGA v 10% in the whole of Queensland

House Price and Income Affordability Conclusions-Accommodation for Sale

Accommodation for sale in the IRC,LGA currently sits at 17.5% of the total market supply (Houses/Units/flats), compared with a median sale rate over the past 3 years of 7.2% of total market supply.

This compares with “an on the market” availability in South East Queensland of around 3.75%

Affordability levels can be summarised as the following in IRC,LGA◦ Median price & Income 13%◦ Median Price & 4th Quartile Income 44%◦ 4th Quartile Price & Income (low stock supply) 32%

Housing Supply

House Price and Income Affordability Conclusions Accommodation for Rent

Accommodation for rent in the IRC,LGA currently sits at 25% of the total market supply (Houses/Units/flats).

This compares with “an on the market” availability in South East Queensland of around 10.1%

Affordability levels can be summarised as the following in IRC,LGA◦ 1. Median price & Income 11%◦ 2. 4th Quartile Price & Income ◦ (low price variance; median to 4th Quartile) 48%

Housing Supply

CITY INDEX SUBURB INDEXHousehold financial year gross total income ($) 95171 89842Household annual expenditure - Groceries ($) 7821 10428Household annual expenditure - Alcohol ($) 1043 1043Household annual expenditure - Cigarettes and tobacco ($) 0 0Household annual expenditure - Public transport and taxis ($) 0 0Household annual expenditure - Meals eaten out ($) 2607 2086Household annual expenditure - Motor vehicle fuel ($) 1560 1920Household annual expenditure - Private health insurance ($) 500 20Household annual expenditure - Home 25 200repairs/renovations/maintenance ($)Household annual expenditure - Motor vehicle repairs/maintenance ($) 500 600Household annual expenditure - Education fees ($) A13 0 0Household annual expenditure - Electricity bills, gas bills and other heating fuel ($) 1367 1500Household annual expenditure - Mens clothing and footwear ($) 300 300Household annual expenditure – Womens clothing and footwear ($) 600 600Household annual expenditure - Childrens clothing and footwear ($) 0 180Household annual expenditure - Telephone rent, calls and internet charges ($) 1400 1560Household annual expenditure - Other insurance(home/contents/motor vehicle) ($) 1000 1200Household annual expenditure - Fees paid to health practitioners ($) 300 300Household annual expenditure - Medicines, prescriptions,pharmaceuticals, alternative medicines ($) 200 224.5Household financial year estimated taxes on total income ($) 12848 9532Rent usual payments $ per month 15648 14076Mortgage usual repayments $ per month 13170 10560Second mortgage usual repayments $ per month 0 0 0 0

Whole of Life Approach-Example

Sheet1

CITY INDEX SUBURB INDEX

Household financial year gross total income ($)9517189842

Household annual expenditure - Groceries ($)782110428

Household annual expenditure - Alcohol ($) 10431043

Household annual expenditure - Cigarettes and tobacco ($) 00

Household annual expenditure - Public transport and taxis ($) 00

Household annual expenditure - Meals eaten out ($) 26072086

Household annual expenditure - Motor vehicle fuel ($) 15601920

Household annual expenditure - Private health insurance ($) 50020

Household annual expenditure - Home25200

repairs/renovations/maintenance ($)

Household annual expenditure - Motor vehicle repairs/maintenance ($)500600

Household annual expenditure - Education fees ($) A1300

Household annual expenditure - Electricity bills, gas bills and other heating fuel ($)13671500

Household annual expenditure - Mens clothing and footwear ($) 300300

Household annual expenditure – Womens clothing and footwear ($) 600600

Household annual expenditure - Childrens clothing and footwear ($) 0180

Household annual expenditure - Telephone rent, calls and internet charges ($)14001560

Household annual expenditure - Other insurance

(home/contents/motor vehicle) ($)10001200

Household annual expenditure - Fees paid to health practitioners ($) 300300

Household annual expenditure - Medicines, prescriptions,

pharmaceuticals, alternative medicines ($)200224.5

Household financial year estimated taxes on total income ($) 128489532

Rent usual payments $ per month 1564814076

Mortgage usual repayments $ per month 1317010560

Second mortgage usual repayments $ per month 0 000

Total Cost($)60,88956,329.50

Net Income ($) 34,28233,512.50

High level data clouds the underlining housing supply and availability data, high levels of activity than can be supported by

Recent sales and rental activity in IRC,LGA in some case activity is 2.5 times higher than the medium in the past 3 years

Affordability is extreme in the 4th quartile income brackets due to low variations in price between median and 4th quartile prices particularly in the rental sector which dominated the IRC,LGA (64%) at 48%

the use of the median household income for generalising housing affordability does not present a complete picture of the housing affordability situation in the region.

Conclusion

Developing a housing affordability measure which encapsulates the different household spectrum and also captures housing and non-house related costs –which reflects the lifestyle of the households is advocated.

Thus our, recommendation for using “the whole of life Approach” to measuring housing affordability.

Thank You

AFTERNOON TEA

3.00pm to 3.15pm

Plenary Session 4 - Local government and community housing: How could councils and the community housing sector respond?

Gary Spivak Port Phillip Council, Victoria

David Cant Board member of the National Housing Finance & Investment Corporation

Andrew Tyndale Chair, Inspire Impact


David Cant

Board member of the National Housing

Finance & Investment Corporation


November 2018 update onNational Housing Finance and

Investment Corporation (NHFIC)

David CantDirector NHFIC

What is NHFIC?

• A Federal Government supported bank with 2 roles:– Bond aggregator (BA) role will channel cost effective debt capital

from institutional bond investors to CHPs as efficiently as possible.– Infrastructure fund (NIF) will provide finance to facilitate mixed

tenure projects.• NHFIC is also a facilitator and a problem solver, a long term

player with a clear social purpose.• Importantly; NHFIC has bi-partisan support in the Federal

Parliament

NHFIC Legislation

• NHFIC establishment legislation received Royal Assent on 29 June 2018

• Investment Mandate (3 July) – provides details on NHFICs functions - BA and NIF

• NHFIC amendment bill currently before Senate:– At least one Board member with social or affordable housing sector

experience;– Review of NHFIC’s operations after 2 years;– Creation of a ‘Special Account’ – to provide even greater flexibility for the

NHFIC.

NHFIC Establishment Progress

• 6 Board meetings held in the first 19 weeks. • Permanent staff team being appointed:

– Includes Senior Management Positions for Loan Origination and Credit Assessment teams

– All with extensive experience in financial sector• Pacific Capital is also engaged to assist with loan origination • Busy responding to enquiries, EOIs and loan applications• Information on BA and NIF (including EOI forms) available from

website: www.nhfic.gov.au

http://www.nhfic.gov.au/

Stakeholder Engagement

• This initiative evolved out of two+ years of consultation with the CHP sector.

• Since incorporation NHFIC Board members and senior staff have engaged extensively across Australia.

• Meetings with CHPs, State Governments, Housing Registrars and local governments.

• Consultations reveal strong interest from CHPs in BA finance.• Important progress with protocols on security and information

sharing with government partners. • Still early days for the NIF….

Pipeline of transactions

• 22 EOIs received via NHFIC website– Majority (by value) from NSW– 1/3rd (by value) from Victoria

• Initial focus is on BA loans with Tier1 CHPs– To refinance existing funds on better terms

• Aiming for 5-6 loan deals to support first NHFIC bond issuance of $150m-$200m– 1st indicative finance proposal issued in mid-October

Next steps

• First half of 2019:– NHFIC bond issued in March qtr – most likely

‘10 year’ bond– Focus on next ‘phase’ of BA loans – with Tier 1s and Tier 2s (Tier

3’s?).– Aim to announce first NIF deals by June qtr– NHFIC will continue to build its ‘in-house’ capabilities including

construction/project finance

Next steps (con’t)

• Second half of 2019:– Continue to build BA and NIF loan portfolios;– Aim for 2nd NHFIC bond issuance in late 2019 or early 2020;– Potential for longer-tenor bonds – depending on level of CHP

demand for longer-term loans;

• Capability grants – available for Tier 2/Tier 3s needing assistance with NHFIC applications.

Next steps (con’t)

• Early feedback– Terms and conditions appear to be attractive to sector. – Clear opportunities to complement State Government initiatives

especially where long term leases (i.e. where 20+ years are offered); – Scope to build partnerships with the private sector in a period when

conventional funding sources for housing are less predictable.– High interest across government to see BA support delivery of NDIS

Special Disability Housing (SDA).

BA $’s and terms • BA: The NHFIC can (initially) borrow up to a $1bn from Commonwealth

funds for the purpose of making loans to CHPs. The aggregation of these loans when sold as bonds into the market will enjoy a Commonwealth (AAA) guarantee.

• Interest cover ratio (ICR): The lowest ICR is likely to be 1.5, unless there are high quality income streams (e.g. State Govt. guaranteed).

• Loan to Value Ratios (LVRs): LVRs will generally be capped at 50-55% unless the relevant income stream or loan recovery arrangements have some special features (e.g. guarantee by a State Government).

• Spread: Concentration risk will be avoided (e.g. over time no more than 10% of the BA loan book will have exposure to a single CHP).

• Quality and sustainability: Unsurprisingly the availability of longer term facilities (up to 20 years) will be accompanied by a sharp focus on quality of tenant management and property maintenance.

NIF $’s and terms

• NIF $: The Government has allocated $1bn for the NIF so that the NHFIC to make loans, investments and grants.

• Purpose: To facilitate through provision of infrastructure the delivery of affordable housing [but not the housing itself].

• Eligible NIF recipients: CHPs, State and local governments and SPVs created by these eligible recipients.

• Grants: Up to $175m can be provided as grant. • Capacity building: $1.5m of grant is for available for CHP

capacity building.

“Tips” for dealing with the NHFIC

• Use the EOI process prior to submitting a fully developed finance application;

• Consult with the NHFIC team early;• Communicate energetically with NHFIC’s loan originators to ensure that

they have a good understanding of your CHP and the capabilities of your organization; each CHP is unique.

• “Use it” (the NHFIC) or (maybe) we might “lose it”!

Thank you

Gary Spivak

Port Phillip Council, Victoria


Affordable Housing Symposium -Build to rent and whole of life approaches to sustainable and affordable living choices

Brisbane 9 Nov. 2018

The role of local government

• Fragmented / inconsistent role across the sector

• Roles vary from direct support (developing community housing projects or contributing land and cash for projects) to no role or opposing affordable housing

• The broadening & deepening of the affordable housing problem (in Port Phillip now affects the lower 70% of the income range) and its greater visibility has resulted in renewed interest in affordable housing, including:

- Addressing local housing need (eg. families, key workers)

- Partnering with community housing organisations and private developers

- Contributing land / air space for community housing (lease or title transfer)

- Housing trust / housing company vehicles

- Use of planning mechanisms to deliver affordable housing

Local government track record in affordable housing (last 3+ decades):

The role of local government

• Very low and low income affordable housing products

- seen as area of greatest need

• Supporting community housing

- a form of social (public and community) housing seen as being relevant to / embedded in local communities

Typical focus of local government (where existing):

Context

City of Port Phillip roles (1985 - 2018)

• Phase 1 (1985 - 2006) : Council as developer of community housing- 14 projects , 311 units- Pioneered ‘community housing air space development model’- Included 2 partnerships with private sector

• Phase 2 (2005 - 2015) : establishment of Port Phillip Housing Trust and partnership with Housing First (formerly PPHA)- 3 projects, 64 units (in Port Phillip under the PPHT)- 193 other units in Port Phillip- $55.6 million in Council projects, land and cash contributed to PPHT

• Phase 3 (2015 - 2025) : broader / strategic partnerships (under the ‘In Our Backyard’ strategy)- target 170 units on pipeline of Council land/ 920 units across Port Phillip- Broad set of strategies (social and private affordable)

33 year track record in delivering, supporting and facilitating affordable housing

Council’s affordable housing policy

Key policy initiatives:• CoPP cash & land - providing a pipeline of land/air space and supporting cash for development of

Council land through partnerships

• Asset sale conditions - pursuing inclusion of community housing as a component of private housing on divested other Council land

• Public housing estate renewal - facilitating redevelopment of public housing estates to increase yield, diversity and quality of housing (in partnership with the State)

• Leverage PPHT assets - facilitating through renewal Housing First to leverage existing Trust assets to increase the supply of community housing

• Planning controls - applying planning mechanisms that encourage private sector delivery of affordable housing units

• Partnerships for delivery - facilitating delivery of affordable housing projects by other organisations

• Innovative new models - fostering new models to achieve a broader spectrum and diversity of affordable housing

In Our Backyard- Growing Affordable Housing in Port Phillip 2015 - 2025

Private affordable housing

• Council is currently reviewing the implementation of ‘In Our Backyard’ in the context of Government policy changes, private sector roles and changing housing need - to enhance delivery of affordable housing.

• The draft Action Plan includes a more transparent / strengthened a focus on Council’s role in facilitating private affordable housing (in addition to continuing its role in supporting community housing), including an incentive based approach to facilitate the voluntary contribution of affordable housing.

Private affordable housing products

• A range of affordable housing products have emerged / are emerging that can be facilitated by Council for delivery by the social and private housing sectors:- Build to Rent (challenge is how to make some affordable)- Rent to Buy- Shared equity housing- Community Land Trusts (yet to be established in Australia)

Current review of In Our Backyard


Benefits of private affordable housing:

• Addresses the broadened and deepened affordable housing problem

• Achieves a wholistic / broad based approach that is complementary with roles in social housing

• Contributes to a key part of the housing need spectrum , in particular moderate income housing products to create greater housing choice and flexibility for changes in household life cycles and circumstance

• Responds to bottlenecks in the housing system caused by growing inability to purchase homes/creation of permanent private rental housing sector, with flow on benefits for reducing social housing demand

• Responds to growing private sector interest in affordable housing, in particular housing targeting moderate income households and key workers -- requires less subsidy, so can increase supply - creates a new investment market / product opportunity

Build to Rent

Why is creating affordable Build to Rent important?

• Build to Rent creates multiple, long-term rental housing dwellings under single ownership

• It enables greater opportunity to find ways for some private rental housing to be affordable, as the rental market expands

• Part of the solution to creating a continuum of affordable housing products to address bottlenecks in the housing system and provide greater housing choice


• Australian Community Land Trust Manual (2013), volume two (late 2018)

• Facilitation / brokering of philanthropic and ethical investor interest in community and private affordable housing

• Proposed investigation of a private rental market affordable housing delivery model (as a collaboration between a group of Inner Melbourne Councils, led by City of Port Phillip, to commence Dec. 2018 subject to funding)

Current private affordable housing initiatives


• Proposed investigation of a private rental market affordable housing delivery model

• Based on the Private Rental Affordable Development Solutions model initiated by the private sector -

- Contribution of number / % of private dwellings

- Purchased by a new class of small private investors in affordable rental housing

- Dwellings rented at discounted market rent (eg. 30%, 50%) for the life of buildings, targeting moderate income households (including key workers)

- Private sector management of affordable rental housing

- Range of safeguards to ensure affordability is maintained in the long-term.

Inner Melbourne regional project- base model


• How to increase private sector take-up of the model under the voluntary planning mechanism (negotiated agreements through the development approvals process) introduced in Victoria on 1 June

• Engagement of a large accountancy firm to investigate financial and planning incentives (excluding yield bonuses, such as floor area uplift incentive) to attract private sector interest / create development viability under hypothetical development scenarios

• Potential for affordable rental dwellings to comprise a % of:- Build to Rent dwellings - The significant number of vacant private dwellings being held in

some urban areas by key owners

Inner Melbourne regional project- proposed investigation

Affordable private housing

• Planning incentives

- Fast tracking development approvals- Reduced or waived car parking- Excluding yield bonuses / floor are uplift (but which can be used in tandem with

other incentives)

• Financial incentives

- Financial structures, eg unit trust, social impact bonds, long-term leases- Tax incentives, eg. new rules for Management Investment Trusts, Homeground

Real Estate private tax ruling- Any other Commonwealth and State policies and programs- Other incentives?

IMAP project - potential incentives to be investigated include:

Build to Rent

Implications of the research project on generating affordable Build to Rent

• If the IMAP research project can find a way to attract / incentivise private developers to voluntarily contribute private affordable rental units, the findings are likely to also have relevance to negotiating with other Build to Rent developers to allocate a number/proportion of Build to Rent apartments as affordable rental housing, using similar incentives.

Andrew Tyndale

Chair, Inspire Impact



Gary Spivak Port Phillip Council, Victoria

David Cant Board member of the National Housing Finance & Investment Corporation

Andrew Tyndale Chair, Inspire Impact


Professor Mark BrimbleHead of Department (AFE), Griffith Business School

Closing remarks

Presented by: Professor George Earl Chairman, NAHC

Best paper award!

THANK YOU

Affordable Housing Symposium 2018Welcome and IntroductionOpening addressKeynoteAffordable Housing Symposium 2018Queensland Housing Strategy 2017-2027�Our ObjectiveQueensland Housing Strategy 2017-2027�Our FocusHousing Construction Jobs Program�Year 1 Summary�Slide Number 9International scene settingSlide Number 11Presentation overviewDrivers of growing Aus interest in BTRUS multi-family housing (1 of 4) US multi-family housing (2 of 4)US multi-family housing (3 of 4) US multi-family housing (4 of 4)UK build to rent housing (1 of 7)UK build to rent housing (2 of 7)UK build to rent housing (3 of 7)UK build to rent housing (4 of 7)UK build to rent housing (5 of 7)UK build to rent housing (6 of 7)UK build to rent housing (7 of 7)BtR in Australia: first tranche (mainstream market) projects publicly announced as at Q4 2018ConclusionsSlide Number 27Plenary Session 1 - Government, industry and community approaches to build-to-rent: Are we there yet?Plenary Session 1 - Government, industry and community approaches to build-to-rent: Are we there yet?Plenary Session 1 - Government, industry and community approaches to build-to-rent: Are we there yet?Questions for the panelPlenary Session 2 - Build-to-rent and the development sector: How is BTR different from build-to-sell and how could developers best respond?Plenary Session 2 - Build-to-rent and the development sector: How is BTR different from build-to-sell and how could developers best respond?Slide Number 34Slide Number 35Slide Number 36Slide Number 37Slide Number 38Slide Number 39Slide Number 40Slide Number 41Slide Number 42Slide Number 43Slide Number 44Slide Number 45Slide Number 46Slide Number 47Slide Number 48Slide Number 49Slide Number 50Slide Number 51Slide Number 52Plenary Session 2 - Build-to-rent and the development sector: How is BTR different from build-to-sell and how could developers best respond?Passive Solar Design �Build to RentOverviewWhat is Passive Solar Design?What is Passive Solar Design?What is Passive Solar Design?What is Passive Solar Design?Why is it important?Case Study - AHURI report 22 August 2018Questions for the panelSlide Number 63Plenary Session 3 - Institutional investors: Will institutions fund BTR in Australia? What needs to happen to scale up BTR supply?Plenary Session 3 - Institutional investors: Will institutions fund BTR in Australia? What needs to happen to scale up BTR supply?Plenary Session 3 - Institutional investors: Will institutions fund BTR in Australia? What needs to happen to scale up BTR supply?Questions for the panelConcurrent Sessions – 2pm to 3pm Build-to-rent an invitation in housing policy or an admission of market failure?2018 Affordable Housing Symposium�Build to Rent:�An innovation in housing policy, or an admission of market failure?��Dr Steven Curry�9 November 2018��The BTR Debate in AustraliaBTR – conflicting narrativesThe Rental Outcomes MatrixDivergent SegmentsDifferent Built FormsThe RisksTo Consider …Market Failure and Social OpportunityMicros housing: A new affordable design typologyRethinking housing affordability measurement based on ‘the whole of life approach’: Evidence from the ISAAC regionSlide Number 81Slide Number 82Slide Number 83Slide Number 84Slide Number 85Slide Number 86Slide Number 87Slide Number 88Slide Number 89Slide Number 90Slide Number 91Slide Number 92Slide Number 93Slide Number 94Slide Number 95Slide Number 96Slide Number 97Slide Number 98Slide Number 99Slide Number 100Slide Number 101Slide Number 102Slide Number 103Slide Number 104Household Formations Percentage 2011-2016 Change � Marital Status & Family CompositionSlide Number 106Slide Number 107Slide Number 108Slide Number 109Slide Number 110Slide Number 111Slide Number 112Slide Number 113Slide Number 114Slide Number 115Slide Number 116Slide Number 117Slide Number 118Slide Number 119Slide Number 120Plenary Session 4 - Local government and community housing: How could councils and the community housing sector respond?Plenary Session 4 - Local government and community housing: How could councils and the community housing sector respond?November 2018 update on�National Housing Finance and�Investment Corporation (NHFIC) What is NHFIC?NHFIC LegislationNHFIC Establishment ProgressStakeholder EngagementPipeline of transactions Next steps Next steps (con’t)Next steps (con’t)BA $’s and terms NIF $’s and terms “Tips” for dealing with the NHFICSlide Number 135Plenary Session 4 - Local government and community housing: How could councils and the community housing sector respond?Slide Number 137Slide Number 138Slide Number 139Slide Number 140Slide Number 141Slide Number 142Slide Number 143Slide Number 144Slide Number 145Slide Number 146Slide Number 147Slide Number 148Slide Number 149Slide Number 150Plenary Session 4 - Local government and community housing: How could councils and the community housing sector respond?Questions for the panelClosing remarks Best paper award! Slide Number 155

affordable housing symposium 2018 - griffith.edu.au · department of housing and public works 8...

Documents