Innovative affordable rental housing solution comes to Sydney
Cameron Jewell | 24 August 2017
Concerned about the housing affordability crisis and fed up with government inaction? Why not rent out your property at a discount? That’s what community housing provider Bridge Housing is asking property investors to do, and it has launched a new not-for-profit real estate agency to manage the process.
Established with $100,000 in start-up funding from the City of Sydney and a $100,000 private philanthropic donation, Home Ground Real Estate – which shares branding with Victorian Launch Housing’s similar real estate agency – will enable private landlords to provide affordable rental housing to those in need, and perhaps get a tax break in the process.
“As specialists in housing people on moderate-to-low incomes in the City of Sydney and other inner areas of Sydney, Bridge Housing is always seeking opportunities to create more safe, affordable housing,” Bridge Housing chief executive John Nicolades said.
“This is an exciting new model that enables private landlords to participate in generating new affordable housing supply under the secure management of a community housing provider experienced in the social and affordable housing tenancies.”
Owners can choose to provide their properties at an “affordable housing rate” (about 80 per cent of market rate), at the social housing rate (25 per cent of tenant income) or could even offer the housing as a philanthropic donation for a period of time.
Home Ground Sydney will also cater to those wanting to rent out at market prices, and funnel an agent’s fee back into Bridge Housing to support more affordable housing units.
As a sweetener, Bridge Housing is currently seeking an Australian Tax Office ruling to have the difference between market rent and discounted rent counted as a tax deduction.
Launch Housing, which started the Home Ground Real Estate project, received such a determination, so Mr Nicolades is hopeful Bridge can receive similar treatment.
Launch Housing deputy chief executive Dr Heather Holst said she was delighted the program was making its way to Sydney.
“[Bridge Housing] are a very capable agency that really knows how to get housing on the ground and we are so pleased to be their partner”.
Mr Nicolades told The Fifth Estate the organisation already leased more than 600 properties from the private rental market, out of a total portfolio of about 2000 properties.
“We have a lot of exposure to the private rental market,” he said. “What we’re trying to do is use that experience and crystallise that into a more focused entity.”
Mr Nicolades said he was convinced there would be strong support from private landlords who wanted to make a difference, and that the outcome would be more affordable housing units.
The grant funding, he said, would enable the organisation to “test the proposition” and see how many people were willing to join up.
“We’re spending three years to test assumptions and look at viability. We’re glad to have the funding but at the end of the day it needs to stand on its own two feet.”
The project is just one stop-gap in a system that is grossly underfunded, however.
“This is not a solution,” Mr Nicolades said. “It’s an intervention. There will be a limited market for this, but the more dwellings we can get that are affordable for the range of our tenants, the better.
“We think we can bring some more supply into the market and, by developing a new business as a social enterprise, add to our ability to develop more housing.”
He said Bridge Housing was involved with industry peak bodies, such as the NSW Federation of Housing Association, to try to get some broader changes to the social and affordable housing policy.
There are currently more than 60,000 people on the social housing waiting list in NSW. A recent IPART report found there was $950 million a year needed to fund the gap between what social housing tenants could pay in rent, and current market rent.
“We consider the best option to place social housing in a financially sustainable position is for government to fund the gap between the tenants’ contribution and the efficient cost of providing social housing through explicit subsidies to the housing providers,” the Review of rent models for social and affordable housing draft report found.