Round Two Focus
Round Two of the Housing Affordability Fund gives priority to greenfield and infill developments as well as planning reforms that reduce the time it takes to approve development applications.
Preference will also be given to:
- Transit-Oriented Developments; or
- Public housing estate redevelopment projects (ie create a mixed community through building or redeveloping affordable homes for private ownership).
Transit-Oriented Developments (TODs) are defined as developments which provide housing within reasonable walking distance of public transport (including train stations, bus interchanges and bus stops, tram stops, light rail and ferries) shops and community services. The developments will also need to be consistent with State, Territory and local government TOD strategies, where these exist.
Applications for Round Two funding focus on infrastructure projects, reform projects and combined infrastructure and reform projects. The criteria are different for infrastructure and reform proposals. Infrastructure projects must deliver at least 50 new homes where the savings generated from the HAF investment are passed on to new home buyers. Reform projects must decrease the overall supply cost of housing through decreasing the time taken to obtain planning or development approvals and so reducing developer ‘holding costs’.
[ top ]
Who was eligible to apply?
Applications for funding could be lodged by:
- Local governments
- Local Government Associations
- State or Territory Government Departments or Agencies
The governments applying were encouraged to submit joint venture applications with private companies and developers, provided that the application itself is submitted by the government organisation.
Private companies and developers are able to access the Fund by working in conjunction with a relevant government entity. This might be the local government or a State or Territory Government Department or Agency. Although a private company or developer cannot apply for funding directly, if they are part of a joint venture application that is successful, the Department will consider contracting with a non-government member of the joint venture where the prospective outcome is clearly better and guaranteed by the non-government organisation.
Reform Proposals
Reform proposals must demonstrate how they will achieve specific reforms and how those reforms will make houses or units in a particular area more affordable, or increase the proportion of affordable dwellings in the location.
The types of reform envisaged are projects that address impediments faced by local governments or the private sector when undertaking large-scale redevelopments.
Infrastructure Proposals
Infrastructure proposals would include projects that seek funding for:
- Infrastructure needed to bring forward developments, or to increase the amount of affordable housing built in new developments; or
- The provision of connecting infrastructure such as water, sewerage and roads and community infrastructure (parks, cycle ways and other facilities).
- Site remediation;
- Increases to urban density in and around TODs.
Financial Security
Before any funding for infrastructure projects can be released, the funding recipient must provide the Department with a Financial Security document. This document protects the Australian Government’s investment. It enables the Department to recover any and all funding paid if the program objectives, normally a specified savings amount to be passed to the purchasers of an agreed number of dwellings, are not delivered.
The Financial Security must cover the total amount of funding provided and be provided to the Department before any funding can be released.
State or Territory government departments (eg NSW Department of Housing) are not required to provide a financial security document. However, State or Territory statutory authorities (eg Landcom) must provide either a bank guarantee or a letter of support from the relevant State Treasury. Such a letter must contain the following words:
“In the event that [Your organisation] fails to ensure that the prescribed outcomes for the [Name of project], the [Relevant State Treasury] will assist in repaying any amounts owed by the [Your organisation]] to the Commonwealth.”
The prescribed outcomes are the specified savings that are passed on to the purchasers of the identified number of dwellings, with the numbers identified matching those used in the Application Form at Questions 35, 36 and 40 and which will also be set as a requirement in the funding agreement Schedule at Section B3.2.
The Financial Security will remain in force until all the outcomes - normally savings to home buyers - as identified in the Funding Agreement have been delivered.
[ top ]
Questions and Answers
Answers to questions sent to the Housing Affordability Fund mailbox may be made available on the Housing Affordability Fund Round Two Questions and Answers page.
Background
The Housing Affordability Fund (the Fund) will invest up to $512 million over five years to lower the cost of building new homes.
The Fund’s focus is on proposals that improve the supply of new housing and make housing more affordable for home buyers entering the market. It will address two significant barriers to the supply of housing:
- Holding costs incurred by developers as a result of long planning and approval waiting times; and
- Infrastructure costs, such as water, sewerage, transport, and open space.
The Fund will assist State, Territory and local governments, in conjunction with the private sector, to address these market barriers and ensure that savings generated from the Australian Government investment are directed to delivering more affordable housing.