The Statutory Review of the National Housing Finance and Investment Corporation (NHFIC) Act 2018 Report was tabled on Thursday, 28 October 2021 in Federal Parliament.
The review sought to achieve two outcomes within the Terms of Reference – acknowledge success and highlight areas of potential improvement.
Building on previous research by The University of New South Wales (UNSW) and the Australian Housing and Urban Research Institute (AHURI), the Review estimates that an investment of $290 Billion will be required over the next two decades to meet the current and projected shortfall in the stock of social and affordable housing. Meeting that shortfall will require active participation by the private sector and high levels of collaboration across all levels of government. NHFIC can play a meaningful role in catalysing private sector finance and complementing efforts across local, state and territory and Commonwealth governments.
Affordable Housing Bond Aggregator
The review finds the Affordable Housing Bond Aggregator has achieved considerable early success and provided a number of benefits to Community Housing Providers (CHPs). That the National Housing Infrastructure Facility (NHIF) has struggled to gain interest from eligible project proponents, partly due to limited awareness of its existence, uncertainty around who can access it and what types of projects it can support. The Capacity Building Program for CHPs has the right intentions, but the size of the grants is too small to make a difference. The Review identified issues of poor quality data in the social and affordable housing sector.
There are 25 recommendations. Recommendations include that consideration be given to increasing the maximum size of individual grants available under the Capacity Building Program to $75,000. Also that the NHFIC research function be narrowed to focus on research aimed at helping to unlock and stimulate private finance in social and affordable housing, consistent with NHFIC’s core purpose and competencies. That NHFIC should retain responsibility for research into housing demand and supply in Australia, including current and potential future gaps between housing supply and demand. Also the Review recommends that NHFIC be directed to support and, where appropriate, lead efforts to enhance the quality and availability of data on the social and affordable housing sector.
A key recommendation of the review is that NHFIC be given an explicit mandate to ‘crowd in’ other financiers to support the delivery of social and affordable housing at greater scale.
This change would recognise that additional investment from the private sector is crucial to substantially increase social and affordable housing stock, and NHFIC should play a key role in catalysing more private sector investment. To support this, NHFIC should be given the ability to lend beyond just the CHP sector to other not-for-profit providers of social and affordable housing.
The Review recommends that the Government direct NHFIC to better leverage NHIF finance and funding to achieve a greater proportion of social and affordable housing in projects. Also that, were the Government minded to provide additional guarantees to support first home buyers, there would be merit in considering whether these could be more precisely targeted to those that most need the assistance and that consideration should also be had to expanding the scheme only in periods when extraordinary countercyclical support for activity may be required or in a way that supports additional housing supply.
The government is expected to respond to the report at the release of the Mid-Year Economic and Financial Outlook in the final sitting period of the year.
Shelter WA will continue to work in partnership with the Community Housing Industry Association and the Community Housing Sector to prosecute the case for government policy settings that support the community housing sector as a key partner in the delivery of social and affordable homes.
Read the review here.