A dedicated fund will be established to support innovative partnerships between the Victorian Government and consortia including the community housing, private, not for profit and local government sectors. It will go hand-in-hand with the other new social housing initiatives announced by the Victorian Government.
The Fund addresses increasing levels of homelessness following years of underinvestment in social and affordable housing. It provides a long‑term financial commitment to supporting a pipeline of housing development projects on non-Victorian Government land (private, not for profit and local government), and through a program of leasing properties from the private market.
How it will work
The Fund provides an ongoing mechanism for the Victorian Government to partner with the community, private, not for profit and local government sectors to deliver housing assistance to Victorians. It has two distinct underlying programs that support:
- Construction of new social and affordable housing dwellings on non-Victorian Government land. The new social and affordable dwellings could be part of mixed developments including private housing, or any other form of development that a consortia may wish to propose. To achieve this, the Department of Health and Human Services in close collaboration with the Department of Treasury and Finance will operate regular competitive funding rounds offering financial incentives to encourage consortia to develop innovative proposals to increase housing supply.
- Subsidised rental for people who need housing assistance but who may not require intensive long-term housing. To achieve this, existing residential dwellings will be leased from the private market.
Funding and administration
The Fund will be set-up using seed capital provided progressively by the Victorian Government over a period of four years, reaching $1 billion in the 2019-20 financial year.
The Fund value will be maintained over time, and the investment returns will be used as the funding stream for the two underlying programs.
The Fund will be jointly administered by the Treasurer and the Minister for Housing, Disability and Ageing.
Commissioning, procurement and performance management of the two programs, will be undertaken by the Department of Health and Human Services to maintain alignment with statewide social housing policy and portfolio objectives.
The Fund will be made up of a permanent pool of capital ($1 billion) to be maintained in value over time. Investment returns used to fund the two programs will be provided on an ongoing basis.
How investment priorities will be decided
An annual plan for the Fund will be developed by the Department of Health and Human Services on behalf of the Minister for Housing, Disability and Ageing and the Treasurer to establish:
- Key demand drivers and priority areas of need across Victoria that will influence the specification of terms for the competitive funding process.
- The proportion of available investment returns from the Fund to be allocated to the respective construction and rental subsidy programs, to be informed by sector capacity considerations in addition to the above.
The annual plan will be developed in consultation with the sector. It will also take account of the Director of Housing’s asset strategy and, from mid-2017 onwards, the new housing supply and demand model being developed under the auspices of the Family Violence Housing Assistance Implementation Taskforce.
The investment priorities will be communicated through the competitive process.
How much new housing supply it will deliver
The Fund will deliver a new housing supply in a variety of forms. The construction program will prioritise developments that include social and affordable housing, and the rental subsidy program will utilise existing private dwellings to increase the available supply of subsidised housing.
The mix is expected to change over time in order to best achieve targeted social outcomes, which are to be revisited on an annual basis through the annual planning process.
However, indicative modelling suggests that over the next five years, the Fund could support around 2,200 households. The final level of new social housing and the balance of support provided between new construction and rental support will be determined through the market process and according to need.
Access to housing
Participating registered community housing organisations will be required to participate in the single Victorian Housing Register, which also requires that 75 per cent of targetted social housing vacancies will be from the priority access category of the Victorian Housing Register.
Allocation of tenants to new social housing developed through the fund will be coordinated through the Victorian Housing Register.
The Department of Treasury and Finance, and the Department of Health and Human Services will consult jointly with the housing industry, financiers and developers on key design parameters for the Fund and its underlying programs.
The first competitive process seeking submissions from consortia will commence in 2018. Government will look to secure the best outcomes in terms of social and affordable housing for the investment provided.