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New approaches to expanding the supply of affordable housing in Australia: an increasing role for the private sector

Summary

This project identifies the barriers to private sector financing of affordable housing and specifies the options for institutional investment in affordable housing - each requires a level of government subsidy to make it feasible.

Project Number: 30021
Research Theme: Housing_Affordability
Project Leader: Berry, Mike
Funding Year: 2000
Research Centre: RMIT-NATSEM

Description

This project deals with the challenge of achieving greater private sector involvement in the financing of affordable housing in Australia (as occurs in a number of other OECD countries). The project will critically summarise and analyse past attempts to achieve this goal with an eye to substantially advancing the enterprise. Particularly important is the question of involving large institutional investors in the rental market, given the build-up of very large volumes of savings in the superannuation funds in particular.

This project aimed to answer the following questions;

What are the options for private sector finance of affordable housing?
What are the main barriers and inducements currently facing key players who are or who could be involved in affordable housing provision?
What policy interventions would be necessary to reduce current barriers/improve current inducements in order to increase the likelihood of greater private sector involvement?
What are the main implications for Government housing assistance and asset management of greater private involvement in housing provision, if the barriers identified in 3) are overcome?

The analysis would model the impacts on assistance levels (in their current form) of alternative scenarios concerning the level of future private sector involvement in financing affordable housing. Attention would also be directed towards improved asset strategies for managing the scale and application of housing assistance over time. In the case of institutional investors and the SHAs, what model or models can be developed to the point of initiation which could originate a new investment class?