Seniors Housing & Healthcare Trends

MELBOURNE: At a time when more new developments with affordable housing components are getting the green light than ever before, property industry leaders are saying it’s increasingly important that these commitments are tracked – and met.

Amid renewed public attention over whether developers are meeting affordable housing obligations attached to their projects, the industry has voiced its support for a centralised database to create clarity and accountability among the sector.

Affordable rental housing is generally offered below the usual market rent to eligible households on low or moderate incomes or to key workers in certain fields. It differs from social housing, which is intended for people with more significant housing needs and is subject to separate eligibility and tenancy arrangements.

There are a number of ways that affordable housing is provided in Australia. One of those is to offer incentives or planning approval to developers that dedicate a portion of a development’s residences to being provided as affordable housing, often for a fixed period of time.

But when it comes to tracking whether these commitments are met, there is no single place where this information is kept. Instead, it’s often monitored by councils, states, developers and housing providers on different levels.

Housing All Australians (HAA) argues that it’s well past time for a national, real-time system that closes gap in how these obligations are monitored.
What are they calling for?

HAA is calling for a centralised digital register linked to state and territory housing regulators, with support from leaders of the Urban Development Institute of Australia (UDIA) and the Real Estate Institute of Australia (REIA).

According to HAA, the register should record each affordable housing obligation and monitor whether it remains in place, whether the rent continues to meet the relevant affordability settings, whether tenants remain eligible and when the commitment period expires.

The proposal is being put forward as a national approach, rather than a series of separate state-by-state systems. HAA says a national register would be easier to use for investors, developers, property managers and workers who move between jurisdictions.

HAA also advocates for affordable housing obligations to be secured by restrictive covenants on property titles, rather than relying only on planning conditions.

“Every time a developer walks away from an affordable housing commitment, a key worker loses a home they can afford and Australia’s productivity worsens,” HAA executive director Robert Pradolin said.

“This will keep happening until the obligation is on the title and the monitoring is in real time.”

Oscar Stanley, president of the UDIA, said that clarity was important for the development industry.

“We need systems that provide transparency to attract private investment as they are essential if Australia is to deliver affordable housing at scale,” Mr Stanley said.

Moreover, Jacob Caine, REIA president stressed the level of responsibility required in managing any tenancy, “let alone one where a tenant has no ready alternative in the market”.

REIA members, he said, “want to participate in delivering affordable housing for Australia’s key workers, and we are ready to do so. But the system needs the infrastructure to make that participation transparent, accountable and trustworthy for everyone involved”.
A proposed solution

One example solution is the Progressive Residential Affordability Development Solution (PRADS), a digital infrastructure system being developed by HAA.

HAA has proposed PRADS as the technology platform for the register and compliance framework. It is not yet operational, and the organisation is seeking government co-design support to develop it.

Under the proposal, affordable housing obligations would be recorded against the property title and monitored through a digital register. Housing regulators would be able to see whether the covenant was in place, whether the rent remained within the required settings, whether tenants were eligible and when the obligation was due to expire.

Former PEXA managing director Glenn King has agreed to chair the national advisory committee to co-design the platform.

“The absence of a national digital compliance register for affordable housing is Australia’s most important unresolved infrastructure gap,” Mr King said.

“I believe solving this problem is fundamental to Australia’s future productivity, which is why I have agreed to chair the national advisory committee to co-design the platform. It is among the most important infrastructure projects Australia needs to build right now.”