A NATIONAL digital platform that can unlock private sector investment in sorely-needed essential worker housing is gaining industry support, as governments continue to struggle with the size and scope of Australia’s housing crisis.
Housing All Australians (HAA) is a national private sector “for purpose” organisation and registered charity. In collaboration with PEXA it has engineered Australia’s first digital essential worker housing register, which integrates with HAA’s Progressive Residential Affordability Development Solution (PRADS).
As of July this year, PRADS is now searchable on realestate.com.au for essential workers.
“We’ve just made a national definition for essential worker housing that the governments can’t do,” Robert Pradolin, a former Frasers Property Australia general manager and the co-founder and director of HAA, told Australian Property Journal.
“PRADS will actually provide transparent oversight on all the compliance aspects of key worker, essential worker housing, including the tenant qualification process, what the essential housing is, and what percentage below market rent the housing needs to be.”
An Aware Super report last year found that a chronic shortage of affordable housing for essential workers located near their workplace in Australia’s capital cities is costing the nation $64 billion.
“With the register in existence, every single local government area can have its own income bands for its essential workers, because Sydney’s going to be different to Wonthaggi, it’s going to be different to Mildura, it’s going to be different to Kalgoorlie. If you’re local government and you want to attract key workers – nurses at a particular price point, for example – then you can do that, because the technology allows that to happen,” Pradolin said.
The property industry and government have been looking at solutions to solve the broader national housing crisis that has been driven by a huge mismatch between supply and demand. It has forced vacancies to historic lows, driving rents up, and stretched affordability in the housing market to its worst level on record.
July marked the official beginning of the Albanese government’s National Housing Accord, which aims to deliver 1.2 million “well-located” homes across the country over five years. It is running concurrently with the Housing Australia Future Fund and National Housing Accord Facility, which together aim to deliver 20,000 social and 20,000 affordable homes.
“I’ve spoken with a number of affordable and social housing providers in the industry, the number one finding is that affordable housing needs a subsidy,” Richard Temlett, national executive director of research at Charter Keck Cramer, told Australian Property Journal.
“Why that’s relevant is because the government, especially in Victoria, is in a very bad budget deficit and they’re effectively saying they can’t keep providing all these subsidies. PRADS is a commercially viable way of not getting a monetary subsidy provided by the government. It’s a revenue- or budget-neutral subsidy that can actually facilitate the supply of affordable housing.
“It does that by basically getting increased heights, which means that you can get increased revenue and that can offset some of the more affordable product that gets delivered.”
Temlett said PRADS is a private sector solution to a housing problem that, “to be honest, the private sector is going to have to solve”.
“It needs the private sector thinking. It needs private sector capital. We all have to come together – that’s federal, local and state governments, as well as the private sector, as well as financiers. It needs everyone because of the scale and also because of the complexity.”
Christian Graham, head of one of Australia’s largest build-to-rent operators, Home, which operates built-to-rent communities with at-market and key worker homes, said the company believes the PRADS model assists with alleviating “two critical industry barriers: the economic challenge of providing affordable housing and the need for efficient oversight systems”.
“We recognise that the economic reality is, that by definition, affordable housing needs genuine subsidies to offset lost rent. The PRADS model assists with a practical framework for creating these subsidies through planning incentives, ensuring developments remain viable and attract necessary funding, while delivering much-needed affordable housing,” he told Australian Property Journal.
“The PRADS register eliminates a significant barrier by enabling build-to-rent operators to manage affordable housing within our communities while providing government with the transparent oversight they need.”
Newly passed build-to-rent legislation offers tax concessions to foreign developers in the fledgling sector, with a requirement for affordable housing for projects to be eligible.
Real Estate Institute of Victoria president Jacob Caine told Australian Property Journal governments “around the world – not just here – are short on resources, are short on innovative ideas and short on courage when it comes to housing policies.
“There is a really untapped resource out there. There are individuals and businesses that have an appetite to give back, that have enjoyed success financially, that have enjoyed prosperity. And they feel compelled to give back, to channel some of the resources that they’ve been able to accumulate into programs that will support society more broadly and particularly in the housing space.”
He said the REIV has “enthusiastically” endorsed the PRADS model as a “foundation of a really effective path forward for identifying and populating the private rental market with more affordable homes for those people that are most in need of them”.
“It makes it clear the type of people that will qualify for it, and makes sure that their needs are more readily met by organisations, businesses and investors.”
