NSW Government Initiatives

NSW has a range of strategies to increase affordable housing in the private and community housing sectors, and to provide for the retention and sound management of existing low-cost accommodation.

The following initiatives aim to increase the availability of, and access to, affordable housing in the private market. The Government has:

• Established the Centre for Affordable Housing which facilitates the development of more affordable housing in NSW
• Created affordable home purchase opportunities under the First Home Plus Scheme which specifically targets first home buyers by abolishing stamp duty on properties valued up to $500,000 and on land valued up to $300,000, with discounted duty payable on properties valued between $500,000 and $600,000 and land valued between $300,000 and $450,000. The NSW Government has extended this benefit to cover any shared ownership mortgage schemes provided the first home buyer purchases at least 50% of the property. For more details please visit the website of the NSW Office of State Revenue.
• Participated in the joint state/federal First Home Owner Grant Scheme that provides a one-off $7,000 grant to first home buyers to assist with purchase costs. The Scheme is administered by the NSW Office of State Revenue
• Increased land supply to reduce pressure on land prices
• Increased the supply of affordable housing through the planning system in some areas such as Ultimo/Pyrmont, Green Square and Willoughby
• Initiated planning policies to retain existing low-cost stock.

The NSW Department of Housing assists more than 500,000 people on low incomes by providing public housing, community and Aboriginal housing programs as well as services like Rentstart and the Mortgage Assistance Scheme which provides financial help for homeowners experiencing temporary difficulties with repayments due to illness, unemployment, accident or some other unexpected life crisis. Interest free loans up to $12,000 are available for direct payment to the lending authority, repayable when borrowers have overcome their financial difficulties.

Social Housing Growth Fund

On 29 November 2008, the Council of Australian Governments agreed on a significant package of investment for housing, a total commitment of nearly $10 billion in the National Affordable Housing Agreement and its associated National Partnerships. This includes additional funding towards:

• Homelessness - $800 million over five years
• Remote Indigenous Housing - $1.94 billion over 10 years ($834.6 million over five years) and
• Social Housing - $400 million over two years

The Commonwealth and the States have agreed to a National Partnership on Social Housing, commencing 1 January 2009, with the Commonwealth providing $400 million over two years, $200 million in 2008-09 and $200 million in 2009-10, for capital investment for social housing and homelessness, know as the Social Housing Growth Fund.

The aim of the National Partnership is to increase the supply of social housing through new construction, providing approximately 1,600 to 2,100 additional dwellings by 2009-10.

NSW made two calls for Expressions of Interest, both opening on 19 January 2009. The first call for dwellings delivered by 30 June 2009 closed on 16 February 2009. The second call for dwellings delivered by 30 June 2010 closed on 16 March 2009.

Four Community Housing Providers were successful in the first round of the Social Housing Growth Fund. The table below outlines the successful organisations, the number of units that will be delivered and the amount of grant funding allocated to each organisation.

Affordable Housing Innovations Fund (AHIF)

The $49.8 million AHIF has been established to increase the supply of affordable housing and encourage provider leverage. Of this, $39.4 million will be dedicated to affordable housing projects using the Debt Equity model, and $10.4 million has been allocated for the construction of new affordable rental dwellings at the St Marys development (see below for more information). $40.4 million has been contributed to the AHIF by the Rental Bond Board.

Under the Debt Equity model, Housing NSW and the provider selected will contribute equity funds, and the provider will also secure debt finance from a private financial institution. These funds will be used to develop or purchase several units of affordable housing in an area of housing need in NSW. Once they are completed, the units will be owned and managed by the registered community housing provider for use as affordable rental housing.

Funds for Debt Equity projects are available to all registered community housing providers. Projects must be located in areas where there is a demonstrated need for affordable housing.

To date, three tenders for debt equity projects have been announced:

• Debt Equity 2004-05: $3.4 million
• Debt Equity 2006-07: $6 million
• AHIF 2007-08: $13.5 million

181 new affordable housing dwellings will be delivered by the successful tenderers.

The remaining funds in the AHIF will be allocated in combination with the National Rental Affordability Scheme.

The key objectives of the AHIF are to:

• Increase the supply of affordable housing
• Maximise the yield of affordable housing by facilitating contributions frompartner organisations
• Facilitate the growth of the community housing sector and thereby increase the sector’s viability and capacity to increase supply of affordable housing in the future and
• Deliver financially sustainable affordable housing projects

St Marys Affordable Housing and Rouse Hill Affordable Housing Projects

The NSW Government has secured land contributions to affordable housing in private developments in St Marys and the New Rouse Hill. These are longer term projects that seek to ensure that affordable housing is provided in new developments.

St Marys is a 15 to 20 year project where 150 land lots are expected to be secured for affordable housing. The first stage of the project involves the construction of 70 affordable rental units. The Centre for Affordable Housing has secured $10.4 million from the Rental Bond Board to fund the construction of the units. Stage 2 will involve the development of 80 units, potentially with a mixture of affordable purchase and affordable rental housing.

At Rouse Hill, the NSW Government has secured 3% of all lots for affordable housing. This is expected to deliver 50 affordable lots for affordable housing.

The Centre for Affordable Housing will select a Growth Community Housing Provider through a competitive process to implement these two projects.

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