Delivering More Affordable Housing: An Innovative Solution

Fresh funding approaches to drive new social and affordable housing.

This paper provides an update on some aspects of community housing financing in Australia and complementary measures needed to close the funding gap that exists for community housing. This gap is the difference between the costs of delivering and operating new community housing developments (including construction and ongoing management costs) and the rental returns.

It focuses on harnessing the contributions from different stakeholders – federal and state governments, institutional investors and Community Housing Providers (CHPs) – bringing together the most efficient financing mix to drive more housing supply.

Key Findings

  • The growth in the community housing sector has been constrained by low rental returns despite a growing need for its services.
  • The demand for social housing will continue to increase, with recent research suggesting over 700,000 new social dwellings will be required over the next 20 years.
  • New financial modelling shows that contributions of government-owned land, mixed-tenure developments, lower-cost NHFIC finance and additional private sector finance can help address the challenge of low rental returns for community housing projects.
  • This new collaborative approach reduces the amount of additional state government funding support needed to deliver more social housing.

Authors

National Housing Finance and Investment Corporation (NHFIC).

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