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Australian Government Department of Families, Housing, Community Services and Indigenous Affairs

Housing

 

National Rental Affordability Scheme (NRAS)

Background
Key features
Implementation
Technical discussion paper
Related Links

Background:

Governments, the business sector and community organisations recognise that housing affordability is now an issue of significant community concern. The growing cost of housing is having a serious impact on the ability of many Australians to meet their financial commitments.

The National Rental Affordability Scheme is a 2007 Federal Election Commitment. The Australian Government will provide funding to:
This Scheme will help create 50,000 new and more affordable rental properties across Australia.

The National Rental Affordability Scheme offers annual incentives for a period of ten years. The two key elements are:
On 3 March 2008 the Prime Minister, the Hon Kevin Rudd MP announced an expansion to the Scheme's aim with a commitment that if 50,000 new homes are achieved in the first five years and if the market demand from renters and investors remains strong, an additional 50,000 incentives for new affordable rental dwellings will be available from 2012 onwards.

Key features:

The Scheme offers an Incentive to providers of new dwellings on the condition that they are rented to low and moderate income households at 20 per cent below-market rates.

The incentive comprises a Commonwealth Government contribution in the form of a tax offset or grant, and a State or Territory Government contribution in the form of financial and/or other support. It will be provided annually for ten years on condition that throughout that period the dwelling is rented to eligible low and moderate income households.

The Scheme is designed to pool significant resources from a range of participants including financial institutions, non-profit organisations and local government which, when combined with the incentives from the Scheme, will increase the supply of lower-rent housing. These resources could include loans; equity investments; capital grants by Commonwealth, State and Territory or local governments; donations by charities; free or discounted land by churches; or contributions by developers in accordance with planning requirements.

The eligibility criteria will ensure the Scheme is open to families on low and moderate incomes, individuals who are looking to rent a property for the first time, singles in private or public rental accommodation, including people working or undertaking study or training. The income thresholds for eligibility will be modelled on:

Implementation:

The National Rental Affordability Scheme is due to commence on 1 July 2008. The Department of Families, Housing, Community Services and Indigenous Affairs is responsible for the implementation and ongoing management of the program. The Commonwealth will be working with State and Territory Governments, large scale investors and not-for-profit housing providers to implement the Scheme.

Technical discussion paper:

The Prime Minister with the Minister for Housing, the Hon Tanya Plibersek MP released a Technical Discussion Paper on 2 May seeking submissions and comments to help settle the final administrative and legislative design features of the National Rental Affordability Scheme. The questions posed within the discussion paper are:

Question 1 - The aim of this Scheme is to stimulate institutional investment in affordable rental housing. Do these provisions strike the right balance between flexibility for investors and achieving long term supply of affordable rental housing?

Question 2 - Do these timelines provide the right amount of time for proposals to be developed?

Question 3 - Will this process allow for expressions of interest to be made without excessive costs to business?

Question 4 - The aim of this Scheme is to increase the supply of affordable rental housing to singles and families on low and moderate incomes. Do the current eligibility criteria sufficiently allow access for this group?

Question 5 - The aim of the Scheme is to improve housing outcomes for tenants. How should tenancy managers be regulated to ensure quality outcomes for tenants in the Scheme?

Question 6 - The aim of the Scheme is to provide affordable rental accommodation at 20% below market rents. Do these provisions strike a balance between the need for administrative simplicity and the need to ensure benefits of the Scheme are passed on to tenants?

All comments and submissions should be directed to:

Section Manager
National Rental Affordability Scheme
Department of Families, Housing, Community Services and Indigenous Affairs
PO Box 7576
Canberra Business Centre
ACT 2610
Email address: nras@fahcsia.gov.au

All submissions and comments must be received by 31 May 2008.

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