NON-profit organisation Housing All Australians (HAA) and ASX-listed PEXA Group have joined forces to deliver Australia’s first digital Affordable Housing Register, as the property industry looks at new solutions and attracting capital to solve the social housing and homelessness crisis.
With input from local government and the property industry, the AHR will serve as a centralised platform and repository for recording all affordable housing commitments, while providing governments with the ability to transparently monitor the compliance of all stakeholders through the process.
The register ensures that developers, investors, property owners and tenants uphold their obligations, such as the committed period of below-market rent, guaranteeing the long-term affordability of the housing created.
HAA Chair, Louise Rutten, emphasised the urgency of addressing Australia’s housing crisis through collaborative efforts between the public and private sectors.
“One of the biggest challenges with affordable housing is being able to track both the construction of housing – where it’s going and where it’s needed – and then the compliance with developers’ commitments to keep the housing affordable in the longer term.
“The other big challenge is attracting private capital to this sector because, despite good-intentioned efforts at a local, state and federal level, we know governments can’t solve this problem alone. Innovations like the AHR are fundamental to finding new solutions that deliver more affordable housing,” she said.
HAA has been leading the way with Rob Pradolin for the public and private sectors to come together and solve this crisis.
In July 2022, Housing All Australians published a report called “Give me Shelter,” which outlined the long-term costs of undersupplying public, social, and affordable housing in Australia. The report not only demonstrated the compelling business case for housing all Australians in order to mitigate future societal costs (read taxpayers), but it also highlighted that if we let government continue to ignore the magnitude of this housing crisis, the costs to society will reach an additional $25 billion per year by 2032 in today’s dollars. And growing.
Meanwhile a HAA report, Give Me Shelter: Leave No Veteran Behind, released earlier this year found the cost of homelessness among veterans of the Australian Defence Force (ADF) is estimated to cost $4.6 billion over 30 years.
The report revealed that nearly 6,000 or 5.3% of the country’s half a million current or former service people were experiencing homelessness over the past year, compared to 1.9% of the broader Australian population.
PEXA CEO Glenn King said the AHR is as an important step toward ensuring transparency in affordable housing commitments.
“At PEXA, we are driven by our purpose and there’s no greater purpose for us than applying our technology capabilities to help resolve Australia’s urgent housing crisis. If we do not collectively solve this issue it will challenge the future prosperity of our country.
“This is a societal problem that requires true collaboration between business and the public sector, and it’s this kind of ‘out of the box’ thinking being driven by organisations, like HAA, that will pave the way for innovative, new solutions to Australia’s housing challenges,” said King.
The introduction of the AHR will replace the outdated Excel spreadsheets currently used by most councils, enabling real time transparency.
The AHR can be used in both the build-to-sell and build-to-rent markets. Developers like HOME, Australia’s largest build-to-rent (BTR) operator, are eager to collaborate with local government to ensure ongoing compliance and affordability in negotiated housing.
Christian Graham, head of HOME said: “HOME owns and manages affordable housing in one of our BTR communities and, subject to regulatory incentives, we believe more should be done in this space. Through the transparency and oversight provided to government by the AHR, we now have a tool that supports the BTR operator managing its entire portfolio. This is a significant innovation for our sector.”
The national platform will be initially trialled in Melbourne, with the City of Port Phillip, the City of Yarra, and the City of Melbourne staff playing pivotal roles in the pilot working group which is expected to conclude by early October.
Melbourne Lord Mayor Sally Capp said she strongly supported the initiative.
“The AHR will help magnify the outcomes from the City of Melbourne’s affordable housing strategy.
“By unlocking private sector capital, we can offer affordable housing for essential workers that is closer to their workplaces, strengthening our local communities.” Capp said.
The AHR platform will seamlessly integrate with HAA’s Progressive Residential Affordability Development Solution (PRADS). PRADS enables the creation of affordable housing without relying on any government subsidy or funding. It enables private sector collaboration with government to create additional value within the development which is then used as the subsidy for the affordable housing. This added value can be created in various ways, such as increasing development density or through negotiated outcomes of rezoning applications.
The resulting affordable housing obligations are secured on title, with rents set below market rates for at least 30 years, allowing developers to sell the affordable housing to investors while the government maintains oversight, through the AHR, to ensure the affordability is maintained for the agreed period.
Kelly Grigsby, CEO of the Municipal Association of Victoria, said Local Government holds a crucial responsibility in this process and collaboration with industry is the key.
“The PRADS approach is another constructive way to support productive partnerships between the development industry and local government which, over time, could generate substantial quantities of affordable housing. We also believe the AHR will fill a significant gap, helping councils monitor voluntary agreements with developers over the long term”.
