Calls for Scott Morrison to improve rental affordability by investing beyond "bond aggregator" model
Mission Australia renews its calls on the Government to commit to a comprehensive homelessness and housing strategy following media reports this morning on key points of a speech on housing affordability delivered on Monday April 10 by the Treasurer Scott Morrison at the Affordable Housing and Research Institute (AHURi).
In the speech, Morrison says an Affordable Housing Finance Corporation could be established to facilitate a "bond aggregator" model for investing in community and social housing.
Mission Australia Housing Executive, Chris Bratchford, welcomed the focus on rental affordability, but warned that without a further investment, the approach would not be adequate to increase affordable housing stock and reduce homelessness.
“We welcome Treasurer Scott Morrison’s consideration of mechanisms to encourage investment in community housing. However, access to cheaper debt-funding alone is not enough, as the returns for private investors are simply not there. A bond aggregator is a great addition, but it will need an additional subsidy to bridge the yield gap between market- and below-market housing returns. “There are many different models to bridge the yield gap and encourage institutional investment and we have seen early progress with the Communities Plus and Social and Affordable Housing Funds in NSW.
But if we are serious about giving superannuation funds and other institutional investors the opportunity to make significant investments in social and affordable housing we have to get the settings right and bridge the gap between market- and below-market return.
“To do this the Treasurer needs to look to the market settings over the long term – to provide interventions that will ultimately increase affordable housing stock. If we can close the yield gap we know the interest from investors will follow.
“In the meantime, we also need to provide supports to those who are in crisis right now through continued and adequate funding for homelessness services. There is still uncertainty surrounding the future of funding for the National Affordable Housing Agreement (NAHA), which funds vital homelessness services and social housing across Australia.
“The impact on the most vulnerable in our society, were this funding reduced, would be significant. I urge the Federal Government to commit to long term funding to deliver affordable housing and better services for homeless people over the long term through a national housing and homelessness strategy and ongoing funding commitment,” said Mr Bratchford.
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