Partnership Power: Delivering Affordable Rental Housing Dr Tony Gilmour Built Environment Design Professions 2 June 2010

Presentation Overview Background – the brave new world of affordable rental housing Partnerships in action – City West Housing case study Conclusion – the power of partnerships

Know Your Social Rental Housing Public housing run by state agencies Rents based on 25% household income Most tenants don’t work Several high-rise and single tenure estates Community housing run by non-profits Rents range from 25-30% household income up to 75% market rent Virtually all tenants work – ‘key workers’ Mixed tenure/income neighbourhoods, well designed buildings

Rise of Community Housing Providers Historically, non-profit community housing (‘housing associations’) dominant – philanthropy, tenant cooperatives etc. Mid 20 th Century pre-eminence of large volume public housing 1970s+ International trend for state coordination/funding of community housing. Public housing becomes ‘residualised’ 1980s+ Market forces brought into community housing, and move to mixed funding models internationally (slightly later in Australia) 1990s+ More complex relationships and partnerships. Stock transfers, joint ventures, use of planning system, ‘nation building’ Commonwealth Government aims to move community housing shares of social housing from 10% to 35% by 2014

Funding Affordable Rental Housing National Rental Affordability Scheme (NRAS) launched 2008 with aim to build 50,000 new ‘key worker’ type homes over 5 years Competitive bidding for funding to encourage best schemes. No allocation quotas per State or Territory – who are the winners? NRAS available to for-profit and non-profit bidders Modest level of funding: $8,000 pa for 10 years ($6,000 from Commonwealth, $2,000 State/Territory) Need for other ‘levers’ to make schemes work – bank loans, land contributions, planning assistance, tax breaks for developers NRAS encouraging further growth of community housing providers. Coupled with greater regulation, NRAS leading to a more professionally managed and commercial sector

Case Study: City West Housing, Sydney

City West Housing – Original Scheme Non-profit organisation established by NSW Government 1994 to deliver affordable housing in newly-gentrifying Pyrmont/Ultimo Commonwealth contributed $50m – Better Cities Program. NSW Government adds 4% of local public land sales ($7m) Developer contributions generated from levy on all commercial and residential schemes in the area under SREP 26. Could be in cash or housing, though in practice all in cash - $14m by 2003 No on-going subsidy for affordable rental accommodation. Rents set at between 25% and 30% of household income 450 units produced in area. City West were the largest developers in Australia of new affordable housing until late 2000s Tenants must live or work in designated areas and earn between $29,094 and $80,180 household income

City West Housing – Capital Costs Source: Milligan et al. (2004) Grants, 42% Land sales levy, 15% Higher income tenants, 10% Non-profit tax savings, 16% GST exemptions, 7% Developer charges, 10%

Zetland Pyrmont Green Square

City West Housing – New Directions From 1998, City West area of operation spread to Green Square City of Sydney ‘Green Square Affordable Housing Scheme’ aims for 479 homes for low/moderate income households over 20 years Uses inclusionary zoning. Either 3% of residential floor area should be affordable housing, or if payment in cash - $121 per square metre (separate levies for non-residential schemes) Use of National Rental Affordability Scheme (NRAS) incentives

City West Housing – Partnerships Integrated working between Federal, State and Local Government Developers involved through use of the planning system, and on project delivery Design professionals assist masterplanning, environmentally sustainable design etc. Tenants actively involved in management decision making, especially existing units Professional board: solicitor, planner, developers, accountant, social policy expert No links with the main state public housing agency - Housing NSW

Conclusions

Partnership Power Affordable rental housing delivery increasingly involves partnerships across public, private and non-profit sectors Use of partnerships for affordable housing mirrors solutions to other ‘wicked’ urban problems – Green Square, Barangaroo, heritage etc. Move to complex affordable housing delivery models, and integration of housing with other social/economic urban objectives is increasing the role of built environment professionals Contemporary BEDP staff need a broader range of skills in finance, risk and partnership working, not just core competencies Increasingly important role of professional bodies, consultants and universities in building and sharing knowledge

Partnership Power: Delivering Affordable Rental Housing Dr Tony Gilmour