Fresh funding approaches to drive new social and affordable housing
The upfront costs of delivering social and affordable housing could be cut by around 80 per cent using an innovative funding model, according to a new research paper from the National Housing Finance and Investment Corporation (NHFIC).
The Delivering More Affordable Housing: An Innovative Solution research paper, released today, found that adopting an innovative financing approach could support a faster roll out of new community and key worker housing.
One of the major challenges to the growth of social and affordable housing is the high degree of subsidy required from government to make the housing financially viable for investors.
This paper 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.
Under one scenario detailed in the paper, the upfront cost per dwelling to state governments could fall from $375,000 to $75,000 per dwelling for social housing and to $25,000 for affordable housing.
This could be achieved by using a collaborative model with layered funding, and the participation of a community housing provider (which would then develop and run the project).
NHFIC’s CEO Nathan Dal Bon said the Delivering More Affordable Housing paper highlights the opportunities in using varying types of finance to leverage more housing supply for a given cost to government.
“This paper comes off of the back of our recent commitment of $400 million in loans and grants to support the building of 1,100 new homes in Melbourne, as part of our involvement in a Community Housing Limited-driven consortium from the not-for-profit, state government, private and industry sectors,” Mr Dal Bon said.
“This project is transformative for social and affordable housing and can be scaled not only in Victoria but across the country.”
Read the Delivering More Affordable Housing: An Innovative Solution research paper.