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Subsidised affordable rental housing: lessons from Australia and overseas

This research explores the lessons that can be learnt from the National Rental Affordability Scheme (NRAS), which stimulated the supply of affordable rental housing for low- and moderate-income earners, and makes recommendations on how to design and fund a new scheme to deliver the supply of affordable rental housing required in Australia.

By June 2015, NRAS had delivered 27,603 dwellings with a further 9,980 to be delivered, 76 per cent of which were in major cities. Dwellings were delivered across a variety of housing types including apartments (39%), separate houses (22%), studios (17%) and town houses (22%). The variety of dwellings delivered was a very positive outcome. Dwellings were delivered in suburbs with a range of socio-economic characteristics and with generally good-quality transport infrastructure. 

Subsidising rents to 20 per cent below market levels, the NRAS model not only increases the number of suburbs accessible to income-eligible households but, if such a discount were available to all eligible households, would lift a third of them out of housing stress. NRAS, discontinued in May 2014 after almost six years, was an effective supply stimulus, delivering tens of thousands of units in a relatively short timeframe. Concerns about complex administration, poor targeting and administrative delays resulted in the discontinuation of the scheme just when momentum and private-sector investor confidence was building. 

Strengths of the scheme included: the ability to combine subsidies from a variety of sources; the level of engagement from the community housing sector and from private investors, particularly in the later rounds; the variety of dwelling types and sizes delivered; and the level of innovation it generated within the industry. The weaknesses were its administration and lack of longevity. 

DOI: 10.18408/ahuri-8104301

Published by: Australian Housing and Urban Research Institute Limited

ISSN: 1834-7223

ISBN: 978-1-925334-29-6

 

Citation: Rowley, S., James, A., Gilbert, C., Gurran, N., Ong, R., Phibbs, P., Rosen, D., and Whitehead, C. (2016) Subsidised affordable rental housing: lessons from Australia and overseas, AHURI Final Report No. 267, Australian Housing and Urban Research Institute Limited, Melbourne, https://www.ahuri.edu.au/research/final-reports/267, doi:10.18408/ahuri-8104301.

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