AHURI NEWS

Transferring public housing to build more homes

31 Jan 2017

New AHURI research explores the benefits of long term leases for not-for-profit housing providers

A new AHURI report finds that transferring the management of public housing from state and territory governments to not-for-profit community housing providers (CHPs) could help to revive run-down estates and fund the development of additional affordable housing.

The report, ‘Recent housing transfer experience in Australia: implications for affordable housing industry development’  found that transfers of long term management contracts to CHPs creates similar credit borrowing capabilities for those providers as transferring the properties with freehold title.

Based on recent public housing transfer programs in South Australia, Tasmania and Queensland, the report found that that boosting the resources available to upgrade and expand social housing was the most important motivating factor for the state governments concerned. In South Australia and Tasmania, the revenue boost achieved through accessing Commonwealth Rent Assistance (CRA) was used to address maintenance backlogs and improve tenant services. In Queensland, the extra income was to underpin large-scale investment in estate renewal and additional affordable housing; however, due to a change of State Government, the planned transfer did not proceed.

...This is a useful way forward that should give CHPs a secure basis for leveraging funds while avoiding concerns about public housing ‘sell-offs’ and ‘privatisation'

The research also modelled four transfer scenarios to determine their long-term viability and leveraging potential. It found that factoring in the extra income CHPs would receive when their tenants can claim CRA generates a modest operational surplus—sufficient to eliminate moderate maintenance shortfalls over the medium term and to support the building of new affordable rental homes on a limited scale. However, if the transferred properties need significant maintenance or CHPs are expected to fund additional non-landlord activities, then the scope to generate extra social housing is greatly reduced.

Professor Hal Pawson from the University of New South Wales, the report’s lead author, says ‘The research reveals that long lease contracts are becoming standard in public housing transfers to community housing providers. This is a useful way forward that should give CHPs a secure basis for leveraging funds while avoiding concerns about public housing ‘sell-offs’ and ‘privatisation’.’

The final report is available to download from the AHURI website.