2. Stakeholders
2.1 Government
The Commonwealth and State and Territory Governments are engaging with local government, the business and non-profit sectors to create more affordable housing through the Scheme. Each level of government will have the following roles and responsibilities.
2.1.1 Commonwealth
The Commonwealth Government will have responsibility for the overall management of the Scheme. This includes:
- setting the national policy parameters of the Scheme;
- allocation of the National Rental Incentive and associated compliance processes;
- approval of proposals following endorsement by relevant State or Territory Governments;
- the provision and administration of the Commonwealth contributions to the Incentive;
- assistance with facilitation of partnerships;
- complaint-handling and appeals mechanisms for applicants and providers in the Scheme; and
- national legislative requirements.
The Commonwealth Government may also contribute in other ways to the creation of more affordable housing. For example, there may be opportunities for linkages between the Scheme and other housing affordability initiatives.
2.1.2 State and Territory Governments
The principal role of State and Territory Governments will include:
- provision and administration of contributions to the Incentive;
- endorsement of proposals which relate to dwellings in their jurisdiction;
- assisting applicants to develop proposals or engage with the Scheme by providing guidance on State or Territory priorities and facilitating planning approvals;
- advising applicants of planning provisions ;
- assistance with determining the process for setting market rents and monitoring of market rents under the Scheme ;
- assistance with facilitation of partnerships;
- referring potential, eligible tenants to the Scheme; and
- tenancy management on a fee for service basis and the provider asks the State Housing Authority to perform that role (in locations where there may be no suitable alternative).
State and Territory Government may also contribute to the Scheme in other ways by:
- identifying land in advance that may be earmarked for affordable housing developments;
- providing cash or in-kind contributions above the minimum level specified as part of the Incentive;
- contributions to projects;
- acting as brokers between financial institutions, tenancy managers, developers, philanthropic donors; and
- supporting non-profit organisations participating in the Scheme.
2.2 Participants in the Scheme
Financial institutions, developers, non-profit organisations and local councils have been identified as potential participants in building, owning, funding or managing housing under the Scheme. There could also be indirect roles for individual investors.
Projects under this Scheme will normally be managed by a combination of the above partners, with each playing different roles. The precise roles, including the lead role of any partnership or consortium, are likely to vary from project to project depending on local circumstances and relationships.
The Scheme offers a new way of funding and delivering affordable housing in Australia. The intention is to provide a stimulus for a market to be created. For this reason the Scheme will seek proposals from entities that include a range of different participants, structures and legal arrangements. FaHCSIA will contract a number of expert Partnership Facilitators to help bring potential interested participants together to consider possible involvement in the Scheme.
2.2.1 Financial Institutions
Financial institutions may wish to participate in the Scheme as equity investors, lenders, brokers of proposals and in other ways. This group is very large and diversified and may include banks, superannuation funds, credit unions, property trusts listed on the ASX and unlisted funds management trusts. Small institutions or funds may prefer to participate indirectly by investing in another entity which is participating directly in the Scheme.
Australian Prudential Regulation Authority (APRA) regulated superannuation funds, pooled superannuation trusts and life office statutory funds will be eligible to participate in the Scheme. APRA-regulated superannuation funds include public offer superannuation funds and non-public offer superannuation funds. As at December 2007, there were 635 entities, with $962.5 billion under management.
The Scheme is not directly available to individual investors. They could become involved indirectly, however, by investing in entities that participate directly in the Scheme. This could, for example, involve investment through a superannuation fund or listed property trust.2.2.2 Private Developers
Developers may wish to participate in the Scheme by retaining ownership, whether on their own or in partnership with other participants, of dwellings which they develop and provide under the Scheme. Alternatively, they may wish to develop dwellings for sale to commercial or non-profit entities that would access the Incentive which will be available under the Scheme, and when the properties become available at qualifying rents.
Developers may also become involved by making land available on which to build dwellings under the Scheme. This may arise, for example, where the planning approval for the project is granted on condition that it includes a specified proportion of affordable housing. It may also arise as a result of a commercial decision by a developer in the absence of associated planning conditions.
Requirements that development projects include a proportion of affordable housing are common in many other countries, including the United Kingdom and United States, and are becoming more common in Australia. The Scheme may assist developers to meet these requirements.
2.2.3 Non-Profit Organisations
Non-profit organisations will be encouraged to participate as they have a crucial role as tenancy managers. Some non-profit organisations might be part of a consortium, or lead the consortium, to deliver the incentives. The Scheme provides an opportunity for existing non-profit organisations to substantially increase their market share, diversify and expand their organisation.
Non-profit organisations may include large charities with service delivery experience in a related sector (such as the provision of aged care) as well as ‘growth providers’ in the community housing sector.
A number of non-profit housing organisations already manage substantial numbers of dwellings. Some also have a modest development capacity. In order to grow, some non-profit organisations will need to partner with other organisations, such as institutional investors, to enable them to build up a substantial Affordable Housing Portfolio.
Non-profit organisations could also play key roles as initiators of collaborative arrangements which also involve developers, financiers and governments in projects for delivery of dwellings under the Scheme. Some have already played this role in projects which have attracted substantial support from State and local governments.
Several State and Territory Governments have identified a number of non-profit organisations as ‘growth providers’ to which they will direct most of the financial and other support which they have promised to commit for provision of low-rent housing. These organisations are well placed for a lead role in the Scheme.
2.2.4 Local Governments
Local governments may be able to support projects by contributing land, providing planning expertise, expediting planning approvals or contributing infrastructure. The benefit for local government is the increased prospect of attracting and retaining key workers such as teachers, apprentices and child care workers in the local area.