Housing Affordability: Philanthropy’s role in social housing...Jim Hardy & Ken Langston...

Housing Affordability: Philanthropy’s role in social housing

June 2017

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• There is a shortage of 400,000 affordable homes across Australia

• Over 105,000 people are homeless on any given night (2011 data)1:20017% increase in past 5 years

• 42% are less than 25 years old

• 54% are male

• Around 6% sleep ‘rough’

• Melbourne’s rate of ‘rough’ sleepers has increased by 75% in the past 2 years

Quick Facts

Increasing Inequality

This both exacerbates the impact of the falling labour share and reflects it, as the top 5% are receiving much of their remuneration in equity and profit share as well as

wages. Regardless, it is a driver behind the emergence of populist politicians

Kerryn JonesProgram Manager Homelessness & Affordable Housing , Lord Mayor's Charitable Foundation

Jo SwiftCEOKids Under Cover

Jim Hardy & Ken LangstonCommunity Sector Banking

Housing Affordability

Kerryn JonesLord Mayor’s Charitable Foundation

Our early journey

Homelessness Initiative (2008)

Melbourne’s Road Home Forum

Two major grants in 2009 to:

• Salvation Army ($1,626,000 in total for the 24/7 Homelessness Project)

• Sacred Heart Mission ($750,000 for the Journey to Social Inclusion project), which has provided evidence of the connection between the long term effects of trauma and homelessness).

• HomeGround Real Estate Agency

• Women’s Property Initiative

• St Kilda Community Housing

Supporting Capacity Building

• Launch Housing

• VincentCare

• Habitat for Humanity

Supporting Innovation

Learning from overseas

• US site visits – philanthropy was active in investing in affordable housing, tax regime was different

• Co-sponsored visit by Julia Unwin CBE, CEO of the Joseph Rowntree Foundation, to Australia (2014)

• Visit from Michael Shapcott (2015), Canadian expert in affordable housing

Collaborating to find solutions

Transforming Housing Partnership

One of several objectives:

What changes need to occur to leverage sufficient investment in affordable housing from the private, philanthropic and public sectors?

Transforming Housing Project

• Transforming Housing: Affordable Housing for All (April 2015 – present)

• Plan Melbourne Refresh

• Infrastructure Victoria 30 year plan

• Melbourne Housing Expo

Advisory Committee member & funding partner

Homelessness &Affordable Housing

Affordable Housing Challenge

The Affordable Housing Challenge Objective

Increase the supply of affordable housing in Melbourne

The Problem

The number of people currently on the waiting list for public housing in Melbourne has grown to 33,000. Only 1% of rental properties are affordable to households on government benefits.

The Challenge

The Foundation will provide a $1 million grant and a $2 million impact investment through Social Enterprise Finance Australia (SEFA) to kick start the Challenge.

The Foundation’s grant must be received by a community housing or not for profit organisation with charitable status.

Partnerships between not-for-profit organisations, such as community housing associations and commercial developers, will be a key feature of the Challenge.

WORKING TOGETHER

BUILDING FOUNDATIONS TO PREVENT YOUTH HOMELESSNESS

OUR PROGRAMS

+ =Reduced risk of homelessness

PROGRAM SNAPSHOT

Housing Affordability:

Philanthropy’s role in Social Housing

June 2017

Social Housing in Australia• Social Housing

• Housing Options

• Shared Equity –

How does it work?

• Unpack for Good

• Philanthropy’s Role

– Social Housing

• Primarily subsidised rental housing owned and managed by state governments or community housing providers (CHP’s).

• Rent setting at either 75% of market rent or 25% of income to avoid “housing stress”.

• Approximately 4% of Australia’s housing stock. As high as 35% in some European countries.

• National average waiting list period is 7 years (range 3.5 -10 years).

• Chronic undersupply and underinvestment of appropriate housing stock - estimated to be about 200,000 dwellings (for current population demand).

1 Social Housing

• Crisis Accommodation – Youth, Domestic Violence and Homelessness Shelters – up to 3 months.

• Transitional Accommodation – CHP’s - 3 to 12 months.

• Long term rental housing – CHP’s and state government –greater than 12 months.

• Private market rental – investors- how long?

• Home ownership.

• Shared equity – government and CHP’s

2 Housing Options

3 Shared Equity - How does it work?

Traditional home loan

• Traditional 1st registered mortgage.

Equity component

• Equity component from co-owner (CHP/Gov’t/ Philanthropy) covers shortfall in deposit funds and/or funding available from traditional mortgage eligibility

• No interest payable on equity component, repayment at end of term or sale

ResidentEquity

CHP/Gov’t/

Philanthropy

Traditional Mortgage + +

• Shared Equity – additional Housing outcome – created in consultation with CHP sector.

• $50m for first stage of investment. Approximately 150 mortgages.

• Structure - Tennant’s in Common, LRG, various side deeds etc, managed by bank. Equity provided by CHP (20-50%) and repaid over time.

• Swapping rent for a mortgage

• Existing portfolio, existing tenants – new developments, new tenants?

• Pilot Partners – NFP accommodation providers (HP, Argyle, HT, PPHA, Haven, Junction and Women’s Housing, FH).

4 Unpack for Good

• Equity partner/ investor for CHP – disability, rental, indigenous, youth, DV housing?

• Equity partner for shared equity home ownership – low to moderate income earning home purchaser’s?

5 Philanthropy’s Role in Social Housing

Questions?

Questions/Discussion

Filthy Rich and Homeless (SBS)https://www.sbs.com.au/ondemand/programs

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