AHURI research supports Budget 2017's affordable housing finance model

AHURI research supports Budget 2017's affordable housing finance model
AHURI research supports Budget 2017's affordable housing finance model

The federal budget announced that an affordable housing bond aggregator would be created to raise money at lower rates from the wholesale bond market for not-for-profit community housing providers.

The government will provide $63.1 million over four years from 2017-18 (including $4.8 million in capital) to establish and run The National Housing Finance and Investment Corporation (NHFIC).

The NHFIC is based on the bond aggregator models of Australian Housing and Urban Research Institute Limited that were presented to federal, state and territory Treasurers in a report of the Affordable Housing Working Group (AHWG) late last year, according to AHURI’s website.

It has compiled a list of new measures for housing and homelessness featured in the 2017 budget.

The final details of the NHFIC will be determined following advice from the Affordable Housing Implementation Taskforce, due by mid-2017 with the corporation to start operations from July 1, 2018.

The budget announcement “is safe policy territory and sound strategy,” according to Honorary Associate Professor, RMIT University’s Julie Lawson whose post was carried by Property Observer. 

The social housing sector and all major parties have supported housing bonds and a special-purpose intermediary since the 2015 report of the Senate Inquiry into Housing Affordability, Lawson said.

The NHFIC will also administer the National Housing Infrastructure Facility (NHIF) that will, over five years, provide $1 billion to support local governments finance critical infrastructure such as transport links, site remediation works and power and water infrastructure needed to speed up the supply of new housing.

Concessional loans totalling $600 million, equity investments worth $225 million and $175 million in grants will be made to local governments through state and territory governments.

The 2017 Budget also replaces the National Affordable Housing Agreement (NAHA) between the Commonwealth, states and territories with a new National Housing and Homelessness Agreement (NHHA) to operate from July 1, 2018.

The NHHA will combine funding currently allocated under the National Affordable Housing Specific Purpose Payment (NAHSPP) and the National Partnership Agreement on Homelessness (NPAH).

It will target jurisdiction-specific priorities including supply targets, planning and zoning reforms and renewal of public housing stock while also supporting the delivery of frontline homelessness services.

Funding for both the housing and homelessness sectors will be ongoing and indexed, with the Commonwealth contributing $4.6 billion to the NHHA between 2018 and 2022.

As part of this funding, the government will provide $375.3 million over three years from 2018–19 to fund ongoing homelessness support services, with funding matched by the states and territories.

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