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Sector performance 2009-10
Victorian registered housing agencies
Published by the Victorian GovernmentDepartment of Treasury and Finance1 Treasury Place, Melbourne Victoria 3002
Authorised by the Victorian Government1 Treasury Place, Melbourne, Victoria, 3002.
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© Copyright State of Victoria 2011
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Contents
Introduction 4
Operating environment 5Commonwealth housing initiatives 5State housing initiatives 5
The registered sector 5
2009-10 Highlights 6
Sector growth 6
Assets 6
Grant Funding 6
Operating revenue 7
Capital Expenditure 7
Households assisted 7
Sector Profile 8
Housing stock 8
Tenants 9
Vacancy rates 9
Staffing 10
Board members 10
Sector performance 11
WELL GOVERNED 12
Governance of the agency 12Regular board meetings 12Board member participation 13
WELL MANAGED 14
Management of the agency 14Staff turnover 14
Tenancy management 15Turnaround time 15Void loss 16Current tenant rent arrears 18Tenants owing more than eight weeks rent 19Arrears written off as bad debt 20Evictions 21Tenancies maintained 22Complaints management 23Tenant satisfaction with housing services 25
Tenant satisfaction – views 26
Housing management and maintenance 26Urgent repairs 26Non-urgent repairs 28Tenant satisfaction with maintenance 29
FINANCIALLY VIABLE 30
Operating performance 30Operating revenue and costs 30Return on average assets 31Operating cash flow 31
Liquidity 31
Capital structure 32Total assets 32Interest bearing debt 33Interest cover 34Loan to valuation ratio (LVR) 34Capital expenditure 34
Outlook 35
Appendix 1 36
Key performance measures – definitions 36
Introduction
Our 2009-10 Sector performance report marks the second year of publication of this report.
The report provides:
> an overview of the highlights within the sector during the financial year;
> a profile of the registered housing sector as at 30 June 2010; and
> a summary of performance of registered agencies against key performance measures.
Operating environment 2009-10 has seen further significant growth in affordable rental housing as major investment programs commenced in earlier financial years by State and Commonwealth governments continued to be rolled out. These programs featured an emphasis on the non-government sector playing a key role in delivery.
Commonwealth housing initiativesSignificant Commonwealth initiatives included:
> National Partnership Agreement on Social Housing (NPSH) supporting the National Affordable Housing Agreement (NAHA) - an allocation to Victoria of $99 152 000 was equally divided across the 2008-09 and 2009-10 financial years. 554 new dwellings were approved in total under the allocation. 318 dwellings of this total (representing $63 million of the total $99 million) were to be delivered by the community housing sector.
> Nation Building and Jobs (NBJ) program (an economic stimulus package) - an allocation to social housing in Victoria of $1.167 Billion has been made with an expected total of 4 500 units to be delivered by 30 June 2012. Registered housing agencies are expected to deliver nearly 2 500 of these units.
> NBJ provided a further $99.2 million for repairs and maintenance of existing social housing units in Victoria with $76.1 million of the allocation expended in this financial year and over 9 100 existing homes benefiting from this program.
> National Rental Affordability Scheme (NRAS) – growth of housing via this scheme continued in Victoria, with approvals totalling over 6 000 units, and units delivered 453. Of these, over 1 500 units had been approved for registered housing agencies (across 6 agencies), and units delivered by agencies totalled 432 or 95 per cent of units delivered to date.
State housing initiativesKey state initiatives included:
> Growth Strategy - continued delivery of the previous government’s Growth Strategy was boosted by a commitment of $510 million in 2007 to increase social housing supply in Victoria over four years ($300 million of which was directed to the not-for-profit sector with a target of 1550 units)
> Additional leasing - an expansion of the leasing program occurred in 2009-10 with 1379 housing units added to social housing stock. In many cases, the Director of Housing subsequently sub leased these units to registered housing agencies to manage.
The registered sectorRegistered housing agencies are not-for-profit organisations that provide affordable rental housing for low income households. The Housing Act 1983 provides for rental housing agencies to be registered as either housing associations (HAs) or housing providers (HPs).
Housing associations are expected to grow social housing by leveraging government funding and existing property portfolios and must be companies limited by shares or guarantee.
In addition to managing Director of Housing properties, housing providers may also manage and/or own other properties. Housing providers can be companies limited by shares or guarantee, incorporated associations or co-operatives.
For many registered housing agencies, the past year has been characterised by heavy workloads involved in delivering housing projects and/or new homelessness and support initiatives, as well as meeting accompanying requirements for greater financial management sophistication in handling significant investments and associated data reporting.
The excitement and challenge of expanding rental housing portfolios, completing significant maintenance and upgrades with existing properties under their management, and/or extending their service delivery responses to homelessness, for some agencies has been accompanied by the demands of meeting regulatory requirements for the first time.
2009-10 HighlightsSector growth During the year the registered sector grew by five agencies to 40 in total, and the number of rental housing units coming under the sector increased to 14 378 from 11 700 at the end of 2008-09.
Of the growth in units under management of the sector:
> 64.4 per cent were attributable to newly registered agencies,
> 14 per cent were new units built or purchased by existing agencies under State and Commonwealth Government investment programs such as Nation Building – Economic Stimulus Plan, and
> 21.6 per cent were existing rental housing units incorporated under the management of registered housing agencies for the first time.
Assets Total assets of the registered sector grew significantly during 2009-10, mainly through developments and purchases of new housing assets. The total assets of the sector reached $1.8 billion by June 2010 from $1.2 billion at the end of the previous financial year. The majority of this growth occurred in associations ($523 million).
Total Assets
Grant FundingDuring 2009-10 the registered sector received both capital and operating funding from government sources which was significantly higher (74 per cent) than the previous financial year. Of the total of $377m in grants received, 83 per cent came via capital grants for development and acquisition of housing assets and 17 per cent in operating grants.
Grant Funding Breakdown
Operating revenueTotal operating revenue of the sector increased by 25 per cent to $145 million in 2009-10. This increase was mainly attributable to increases in rental revenue (due to the larger number of units let) and operating grants received by the registered sector.
Total Operating Revenue
Capital ExpenditureThe registered sector invested $370 million in housing assets during 2009-10, of which associations contributed almost 95 per cent. This capital expenditure was funded through both capital grants and interest bearing debt.
Capital Expenditure
Households assisted During the year, the registered sector assisted a total of 5 279 households1 to establish new housing tenancies, 42.3 per cent of which were in long-term housing. The number of households assisted was a 32 per cent increase on the previous year’s result.
New tenancies by housing type 2009-10HAs HPs Sector
Long-term housing2 1 534 699 2 233Transitional housing 1 139 1 907 3 046Total 2 673 2 606 5 279
1 Number of households that were allocated housing during the year, either to existing or new/upgraded tenancy units.
2 Long-term housing includes affordable housing, rooming-houses and group housing.
Sector ProfileThis section provides a profile of the registered housing sector at 30 June 2010.
Housing stock As at 30 June 2010, the registered sector had 14.378 tenancy (rental) units under management. Of these, 53.1 per cent were managed by associations and 46.9 per cent by providers. Associations owned a majority of their stock (68.1 per cent). In contrast to this, providers managed most of their stock on behalf of the Director of Housing (89.5 per cent), another registered agency or other party (6.9 per cent).
Total tenancy units, 30 June 2010 Associations Providers Sector
Owned 5 199 245 5 444Managed - Government 2 255 6 036 8 291Managed - Other 181 462 643Managed - Total 2 436 6 498 8 934Total tenancy units 7 635 6 743 14 378
Notes to table
• Providers Managed - Other includes 392 units managed under the public housing program.
• Tenancy units managed by a registered agency on the behalf of another registered agency have been counted under Owned only.
• Tenancy units include all forms of long-term housing, transitional and crisis housing.
Long-term housing accounted for the largest proportion of stock in the registered sector and the majority of stock in the portfolios of both associations (77.8 per cent) and providers (58.2 per cent). The proportion of long-term housing decreased slightly from 73 per cent in 2008-09 to 68.9 per cent whilst the proportion of transitional housing rose from 25 per cent to 29.9 per cent. The increase in transitional housing reflected the 1 179 transitional housing units added to the sector through three newly registered providers.
Tenancy units by housing program, 30 June 2010
Tenancy units by housing type, 30 June 2010Associations Providers Sector
Long term 5 986 3 926 9 912Transitional 1 611 2 683 4 294Crisis 38 134 172Total 7 635 6 743 14 378
Just over three quarters of dwellings have two or three bedrooms, with the proportions of each remaining stable from 2008-09.
Housing stock by number of bedrooms, 30 June 2010
The profile of rooming house stock has also remained stable from 2008-09, with most rooming houses containing 6 15 units. Whilst the number of rooming house units has not changed, the quality has improved greatly due to the extensive rooming house upgrade program that was boosted by over $99 million in funding from the Nation Building – Economic Stimulus Plan.
Rooming house stock by number of rooms/units, 30 June 2010
Tenants At 30 June 2010, there were 12 683 tenancies let in the registered sector, with 73 per cent in long-term housing (including rooming house), and 27 per cent in transitional housing.
Tenancies by housing type, 30 June 2010HAs HPs Sector
Long-term housing 5 663 3 597 9 260Transitional housing 1 203 2 220 3 423Total 6 866 5 817 12 683
Vacancy rates The vacancy rate for vacant tenantable3 stock at 30 June 2010 was 1.6 per cent for associations, similar to the rate for 2008-09 of 1.7 per cent. This compared to a vacancy rate for vacant untenantable4 stock of 4.2 per cent, slightly reduced from 4.3 per cent in 2008-09. Maintenance required as a result of normal wear and tear or occasional tenant related damage, and the rooming house upgrade program all contributed to the vacant untenantable stock figure.
Vacancy rates, 30 June 2010
3 A vacant tenantable unit is one where the unit is ready to be occupied and any maintenance required to facilitate this has been completed
4 A unit is considered vacant untenantable where maintenance required to have it available for occupancy has been deferred or has not been completed, or a decision has been taken for other legitimate reasons not to fill that unit
Staffing At 30 June 2010, there were 1125 staff employed in the registered sector. This equated to 978.5 full time equivalent (FTE) positions, of which associations employed 41.5 per cent of the total, and providers 58.5 per cent.
During the year 381 additional staff members were recruited, 46.2 per cent to newly created positions within the sector. Associations created the majority of the new positions.
Total staffing, 30 June 2010HAs HPs Sector
Staff 444 681 1 125FTE 410.5 567.9 978.5Staff recruited 158 223 381New positions created 101 75 176
The table below shows the growth in staff numbers in the registered sector for the past three years. The increase reflects the overall growth in the housing portfolio of the sector and the expansion in the number of registered agencies.
Registered housing sector staff, three year comparison
Board members As at 30 June 2010, there were 317 active board members in the registered housing sector, with an average of nine board members per association and eight per provider.
Board members, 30 June 2010
Sector performanceThis section presents the results from the 2009-10 Key Performance Measures (KPM) data collection as reported by registered housing agencies. The annual KPM data collection plays a key role in the monitoring of ongoing compliance and performance of registered housing agencies against Performance Standards. Results reported by agencies provide a solid, consistent base for identifying trends, both within agencies and across the sector as a whole.
The KPM data collection was first introduced for the 2006-07 financial year.
Data submitted by the nine registered housing associations in this year’s collection has been presented in this section and compared to the performance of the associations across the four data collections undertaken to date5.
Due to the large number of housing providers registered at the end of the 2009-10 financial year (31) detailed data on providers will not be presented, although averages for this sector as a whole are reported as appropriate6.
In line with the mission of the Housing Registrar to protect social housing assets and ensure quality services to tenants by regulating well governed, well managed and financial viable rental housing agencies, data in this section is presented according to these three key areas of regulation.
For a complete list of the KPMs see Appendix 1.
5 Data for the 2006-07 financial year is for seven associations only. With the exception of KPM 1 (number of regular board meetings held), all 2006-07 averages are based on the KPM percentage figures.
Wherever possible, 2007-08 averages have been calculated from the raw data collected under the supporting data items for each KPM. Where this supporting data was not requested, the average for 2007-08 is calculated from the KPM percentage figure.
All averages from 2008-09 onwards are calculated solely on the supporting data items.
6 Due to the small number of providers registered at the end of the 2007-08 financial year (four), and the large diversity between these, averages for previous data collections are only provided from 2008-09 for providers.
WELL GOVERNED Data in the Governance and Management sections is presented for eight associations. Two of the associations operate under one umbrella organisation and report jointly on governance and management. These associations report against all other KPMs as individual organisations.
Governance of the agency Regular board meetings Associations held 96.4 per cent of all scheduled regular board meetings in the year, slightly down from 100 per cent in 2008-09 7. Most associations met monthly, excluding January meetings. Some associations met on a six-weekly basis.
Number of regular board meetings held, 2009-10 (HAs)
The average number of regular board meetings held has remained broadly the same over the last four years. A small drop from 10.6 in 2008-09 to 10.1 in 2009-10 reflects a lower number of meetings held, rather than less meetings scheduled. Meetings do not take place when a quorum is not achieved, or are cancelled in December or January due to the other commitments of board members at that time of year.
Number of regular board meetings held, four year trend (HAs)
In addition to regular board meetings, associations have an active sub-committee structure. On average, association boards had three sub-committees that met 4.6 times. Providers reported similar arrangements with an average of three sub-committees that met 5 times.
7 2006-07 and 2007-08 data is not comparable as this requested the total number of meetings held
Board member participationRegular board meetings were well attended, with the average board member participation rate for associations stable at 77.5 per cent from 77.7 per cent in 2008-09, a slightly lower result to that recorded in 2007-08 (83.6 per cent).
Board member participation rate, 2009-10 (HAs)
Board member participation rate, four year trend (HAs)
Providers also reported good results for governance measures with 97.1 per cent of scheduled regular meetings held, similar to 96.7 per cent in 2008-09. Of the 31 registered providers, 28 held all scheduled meetings. Each provider conducted an average of ten meetings during the year (unchanged from the previous year).
The board member participation rate for providers for 2009-10 increased slightly to 80.6 per cent from 78.9 per cent in 2008-09.
Achievement of quorums and participation rates are primarily affected by illness, travel and other commitments of board members resulting in non-attendance.
WELL MANAGED
Management of the agency Staff turnoverStaff turnover in associations ranged between 0 per cent and 23.1 per cent with an average of 13.8 per cent, comparable to 12.8 per cent in 2008-09.
Staff turnover, 2009-10 (HAs)
Two associations recorded a staff turnover above 20 per cent. Of these, one association reported the figure to be higher than normal and does not expect the trend to continue. The second has finalised a new structure and shown an improvement from previous years. The Housing Registrar expects this reduction in turnover to continue as the organisation consolidates its operations.
Staff turnover, four year trend (HAs)
Despite individual association turnover results showing decreases from previous years, the average staff turnover increased slightly from 2008-09 due to an increase in turnover of long-term housing staff.
By program, a far greater proportion of transitional/crisis staff left compared to other association staff although overall this figure decreased slightly from 2008-09. Traditionally turnover in the transitional housing program has been higher, due to the often more intense nature of the work and a younger profile of staff who may move on after gaining experience in this program.
Staff turnover by program, three year trend (HAs)
Providers recorded an average staff turnover rate of 21.8 per cent in 2009-10 compared with 13.9 per cent in 2008-09. By work areas, the transitional housing program recorded turnover of 19.1 per cent with the figure for all other areas at 24.0 per cent. Whilst some turnover is expected and can be positive, the rate for providers reported in the 2010-11 KPM data collection will be examined by the Housing Registrar, and if the trend upwards has continued, further analysis of factors contributing to this trend will occur.
Tenancy management Turnaround time Average vacant tenantable (VT)8 turnaround time for associations was 13.8 days, slightly down from 2008-09 at 14.5 days. Average vacant untenantable (VUT)9 turnaround time increased to 33.6 days from 20.7 in 2008-09.10
Average turnaround time (days), 2009-10 (HAs)
8 A vacant tenantable unit is one where maintenance has been completed and the unit is ready to be occupied.
9 A unit is considered vacant untenantable where maintenance has been deferred or has not been completed.
10 VUT turnaround time was not included in the data collections for 2006-07 and 2007-08.
Average turnaround time (days), 2009-10 (HAs)
Whilst the average result for VT turnaround time shows a small improvement, results reported by individual associations for different housing types indicated a wide range of performance. For long-term housing stock excluding rooming houses, turnaround times varied from 2 days to 37 days. For rooming house stock, VT turnaround times ranged from 4 days to 46 days, and for transitional housing the range was from 2 days to 23 days.
Explanations provided to the Housing Registrar suggested that results are affected by various factors including delays occurring where nomination rights exist with partner agencies, extended tenant selection processes in group housing situations, as well as increased time taken to tenant new stock (for instance when new tenants are required to provide their current landlord with 28 days notice).
The slightly increased average for VUT turnaround time was explained primarily by the extensive upgrade and refurbishment program implemented for the rooming house stock, lengthy maintenance requirements for some units in the past year, and decisions in group housing to not tenant a unit due to issues with another existing tenant. As for VT turnaround times, there was a wide range of results reported by individual associations for different housing types.
Whilst acknowledging the validity of these explanations provided by associations, the Housing Registrar will be looking closely at 2010-11 figures reported and should such wide variance still exist, will be conducting further analysis with associations to determine how this range can be reduced.
Average turnaround time (days) by housing type, 2009-10 (HAs)
Providers recorded an average VT turnaround time of 7.9 days and VUT turnaround time of 32.6 days. VT turnaround time in the long-term housing program was comparable to VUT turnaround time whereas for both the rooming house and transitional housing program VUT turnaround time was longer than VT turnaround time.
VUT turnaround time for the transitional housing program was particularly long at 38.6 days, primarily due to lengthy maintenance requirements as well as issues associated with effectively managing shared tenancies.
Average turnaround time (days) by housing type, 2009-10 (HPs)
Void loss Overall, rent foregone due to tenancy units being vacant was a small percentage of total rent charged byassociations. The average void loss (vacant tenantable) for associations was 1.1 per cent down from 2.1 per cent in 2008-09.
One association reported voids loss of over 2 per cent, however this result was a significant improvement over its previous year’s performance and reflected its improved tenancy management practices.
Void loss (vacant tenantable), 2009-10 (HAs)
By housing type, the largest VT void loss was recorded in transitional housing where rent income is returned to the Office of Housing rather than retained by an association.
Void loss (vacant tenantable) by housing type, 2009-10 (HAs)
Providers recorded a similar average VT void loss to the associations of 1.5 per cent, with the largest percentage loss also recorded in transitional housing (4.0 per cent).
Void loss (vacant tenantable) by housing type, 2009-10 (HPs)
Current tenant rent arrearsResults reported for current tenant rent arrears as a percentage of total rent charged were low across all associations, with all nine associations recording arrears of 2.0 per cent or less. The average was 1.3 per cent comparable with 1.4 per cent in 2008-09 and continued a trend of improvement across the past four years.
Current tenant rent arrears, 2009-10 (HAs)
Current tenant rent arrears, four year trend (HAs)
By housing type, rent arrears in transitional housing were again the highest, most likely reflecting the difficulties experienced at times in collecting rent from transitional housing tenants.
Current tenant rent arrears by housing type, 2009-10 (HAs)
Providers reported an increase in current tenant rent arrears from 3.0 per cent in 2008-09 to 4.2 per cent in 2009-10. Rent arrears were higher for long-term housing than transitional housing, reversing the trend from last year. This result was largely attributable to four providers managing high levels of rent arrears in long-term housing, although for two of these providers the actual number of tenants in arrears was very small (as was the overall number of tenancies). Excluding these providers from this figure reduces the average for long-term arrears to 1.2 per cent.
The Housing Registrar has identified these issues in individual regulatory plans prepared with the providers and continues to monitor their progress in reducing rent arrears.
Arrears for the rooming house stock reduced in 2009-10 due to improved tenancy management and rent collection processes.
Current tenant rent arrears by housing type, 2009-10 (HPs)
Tenants owing more than eight weeks rentAt 30 June 2010, 2.2 per cent of tenants in association stock owed more than eight weeks rent, lower than 3.3 per cent at 30 June 2009. Two of the associations recorded higher than average figures have showed improvement from the previous year’s performance and the Housing Registrar continues to monitor their progress in further reducing their figure.
Tenants owing more than eight weeks rent, 30 June 2010 (HAs)
Tenants owing more than eight weeks rent, three year trend (HAs)
Transitional housing again recorded the highest rate albeit an improved result from the previous year’s figure which was very high. This improvement was attributable to two associations that significantly improved their performance against this measure in 2009-10.
For providers, in contrast to the downward trend for associations the percentage of tenants owing more than eight weeks rent rose to 7.0 per cent from 4.1 per cent in 2008-09. This rise was an outcome of the significantly increased result for long term housing from 4.0 per cent in 2008-09 to 10.9 per cent in 2009-10.
Tenants owing more than eight weeks rent by housing type, 30 June 2010 (HAs)
As with the current rent arrears KPM, four specific providers were largely responsible for this high figure and their progress in addressing this issue is being monitored by the Housing Registrar.
Tenants owing more than eight weeks rent by housing type, 30 June 2010 (HPs)
Arrears written off as bad debtArrears written off as bad debt by associations represented a very low proportion of total rent collected. The results in 2009-10 were relatively stable at 0.7 per cent, and have fluctuated between 0.6 per cent and 0.8 per cent in the past three years.
Arrears written off as bad debt, 2009-10 (HAs)
Arrears written off as bad debt, four year trend (HAs)
The average figure for transitional housing however increased significantly from 1.7 per cent in 2008-09 to 3.7 per cent in 2009-10 with three of the five associations managing transitional housing stock reporting results higher than this average. The Housing Registrar will examine 2010-11 figures once these are submitted and conduct further analysis on contributing factors if the trend has continued.
Arrears written off as bad debt by housing type, 2009-10 (HAs)
Providers recorded a slightly higher result of 1.7 per cent compared with 1.1 per cent in 2008-09. The result for transitional housing has reduced slightly however all other types of housing stock recorded an increase, particularly for long-term housing (excluding rooming house) which rose to 1.1 per cent from 0.2 per cent in 2008-09.
Arrears written off as bad debt by housing type, 2009-10 (HPs)
Evictions Evictions reduced in 2009-10 to 3.4 per cent from 5.1 per cent in 2008-09 for associations. In actual numbers, a total of 33 evictions in long term housing and 47 in transitional housing were reported across the nine associations. The evictions KPM is calculated as a percentage of exits, not of overall tenancies, which means that an agency with a stable tenancy profile and therefore low number of exits may record a high percentage of evictions even though the actual number is low.
Evictions four year trend (HAs)
The pattern of reductions in evictions was common to all housing types.
Evictions by housing type. 2009-10 (HAs)
Data on reasons for evictions was very similar to 2008-09. Most evictions in associations were for arrears. The relatively large percentage of evictions for other reasons in transitional housing were primarily attributable to associations moving on tenants who had remained for too long a period in that form of housing.
Reason for eviction by housing type. 2009-10 (HAs)
Similar to associations, the overall percentage of evictions reported by providers reduced - from 6.8 per cent in 2008-09 to 5.9 per cent. However evictions in the long-term housing rose in 2009-10, particularly in rooming house stock where the result increased from 6.2 per cent to 10.4 per cent.
Evictions by housing type. 2009-10 (HPs)
Providers also recorded a relatively large number of “other” reasons for evictions in transitional housing.
Tenancies maintained (long term housing including rooming house)The average result for tenancies maintained as reported by associations for long-term housing was 85.6 per cent. Results for this year are not comparable to the previous year’s results as the calculation method for the KPM was changed for the 2009-10 reporting cycle. Trend data will be shown from 2010 11.
Tenancies maintained (long-term housing). 2009-10 (HAs)
Both associations and providers also recorded significant rates of tenancies maintained in transitional housing (35.7 per cent and 42.9 per cent respectively). As transitional housing is a short-term housing option, the retention of tenancies for a full-year indicates that tenants are staying longer than anticipated, possibly due to a lack of availability of suitable longer term housing options.
Tenancies maintained by housing type. 2009-10 (HAs)
Tenancies maintained by housing type (long-term housing). 2009-10 (HPs)
Complaints management Registered housing agencies are required to take all reasonable steps to resolve a complaint referred to it, particularly those from tenants or prospective tenants, within 30 days of the complaint being made. In 2009-10, 89.5 per cent of complaints made to the associations were resolved within 30 days up from 85.2 per cent last year and continuing the upward trend. All associations recorded 75 per cent of complaints resolved or better.
The average result for providers was 79 per cent, slightly lower than 81.5 per cent reported last year.
Tenant/prospective tenant complaints resolved within 30 days, 2009-10 (HAs)
Tenant/prospective tenant complaints resolved within 30 days, three year trend (HAs)
Only 3.3 per cent (down from 4 per cent in 2008-09) of all complaints directed to agencies were unresolved either because no resolution was able to be reached with the complainant (2 per cent down from 3 per cent) or because the complainant took the complaint to an external party (1.3 per cent up from 1 per cent). The table below provides a summary of complaints handled by agencies.
Number of complaints HAs HPs Total
Total number of complaints 214 913 1127Total number of tenant/prospective tenant complaints 104 444 548
Advocate involvement
Yes 15.4% 7.0% 8.6%No 84.6% 93.0% 91.4%
Housing Type
Long term 60.3% 36.8% 41.3%Transitional 32.2% 57.2% 52.4%Crisis 0.0% 2.5% 2.0%Other 7.5% 3.5% 4.3%
Complainant
Tenant (or advocate on their behalf) 38.8% 48.2% 46.4%Prospective tenant (or advocate on their behalf) 4.7% 0.4% 1.2%Neighbour (or advocate on their behalf) 39.3% 44.6% 43.6%Another agency 2.3% 2.8% 2.8%Other 15.0% 3.9% 6.0%
Primary focus of complaint
Customer service/information referral processes 9.3% 3.4% 4.5%Tenancy management 17.3% 4.8% 7.2%Property maintenance 14.5% 32.7% 29.3%Neighbourhood disturbance 42.5% 48.6% 47.5%Security/personal safety 5.1% 4.1% 4.3%Community/interagency
relations 1.4% 0.8% 0.9%Other 9.8% 5.6% 6.4%
Outcome of complaint HAs HPs Total
Not within agency jurisdiction - complainant referred elsewhere3.3% 7.2% 6.5%Resolved - apology by agency7.0% 2.5% 3.4%Resolved - explanation/further information by agency 23.8% 40.6% 37.4%Resolved - change to decision/action 15.9% 2.7% 5.2%Resolved - other 47.2% 43.5% 44.2%Unresolved - no resolution able to be reached with complainant 1.9% 2.0% 2.0%Unresolved - complainant took complaint to external party 0.9% 1.4% 1.3%
Tenant satisfaction with housing servicesSeven of the nine associations conducted tenancy surveys11 during 2009-10. Overall, of the tenants that responded to the surveys 6 , 87.8 per cent indicated that they were satisfied with the housing services provided by the association, compared to 86.2 per cent in 2007-08.
Tenant satisfaction with housing services, 2009-10 (HAs)
Tenant satisfaction with housing services, four year trend (HAs)
Data for providers indicated that the average satisfaction rating with housing services was 88.5 per cent, a slightly higher but very similar result to that for associations. Of the 31 registered providers, 20 provided data for this KPM 12. Data reported for rooming house residents showed a slightly lower level of satisfaction with housing services compared to tenants in other long term housing and transitional housing stock. Two providers reported satisfaction rates below the average for rooming house tenants, with one significantly below. This provider is working to improve the satisfaction rate of its tenants for the future, and the Housing Registrar is monitoring progress made towards achieving this.
Where response rates to surveys were very low, the Housing Registrar sought explanations from providers and strategies for improving upon this in the future.
Tenant satisfaction with housing services, 2009-10 (HPs)
Notes to table
Long term (excluding rooming house) data for 17 out of 31 agencies, rooming house 9 out of 31 and transitional housing 7 out of 31
1112
11 The response rates for the surveys varied between 16.3 per cent and 44.4 per cent (average 28.4 per cent) and the sample size between 67.4 per cent and 100 per cent (average 96.4 per cent).
12 The response rates for the surveys varied between 8.7 per cent and 100 per cent (average 31.1 per cent) and the sample size between 4.4 per cent and 100 per cent (average 85.1 per cent).
Tenant satisfaction – viewsThis KPM was introduced in the 2008-09 KPM data collection to measure tenant’s satisfaction around consideration of their views by the housing agency. Seven of the nine associations provided data for this KPM in 2009-10 with an average result of 77 per cent. Three associations were able to provide data for this KPM in 2008-09 with satisfaction ranging between 70 per cent and 100 per cent (average 75 per cent).
Tenant satisfaction - views, 2009-10 (HAs)
For providers the average recorded was 88.2 per cent up from 86.5 per cent13. Of the 31 providers, 21 provided data for this KPM.
Housing management and maintenanceUrgent repairsOf the total number of urgent repairs requested of associations during 2009-10, 86.8 per cent were completed within 24 hours, a slight rise on last year’s result of 85.6 per cent. Eight of the associations recorded a completion rate of 81.9 per cent or higher.
Urgent repairs completed within 24 hours, 2009-10 (HAs)
13 From the 2009-10 KPM data collection, all agencies are required to use specific questions, developed by the Housing Registrar, for both KPMs concerning tenant satisfaction with housing services and consideration of views.
Urgent repairs completed within 24 hours,four year trend (HAs)
Analysing this data further by delivery type shows that 89.9 per cent of urgent repairs delivered directly by staff employed by an association were completed within the relevant timeframe as compared to 86.3 per cent of repairs contracted by the association.
Reasons for repairs not being completed within the required timeframes included tenants being unavailable for contractors to access properties, weather delays, and waiting periods for parts or major repairs required (e.g. hot water service replacement).
Associations using government maintenance services for some properties, particularly transitional housing stock, reported difficulties monitoring completion times for repairs. Government maintenance services do not provide the data directly to agencies, and agencies have had to develop alternative strategies to obtain required data through tenants or contractors reducing the reliability of this data at times.
Urgent repairs completed within 24 hours by delivery type, 2009-10 (HAs)
The average proportion of urgent repairs completed within 24 hours for providers was 85.0 per cent. Similar to associations, urgent repairs delivered by the agency recorded the highest rate of completion (93 per cent). Repairs coming under government maintenance services produced the lowest result (64 per cent). As a greater number of properties managed by providers came under government maintenance services, this result significantly influenced the overall completion rate recorded by the sector.
Urgent repairs completed within 24 hours by delivery type, 2009-10 (HPs)
Non-urgent repairsThe completion rate for non-urgent requested repairs within 14 days for associations was 86.1 per cent and, similar to urgent repairs, the highest completion rate was recorded for agency delivered repairs and the lowest for repairs managed by government maintenance services.
Non urgent repairs completed within 14 days, 2009-10 (HAs)
Non urgent repairs completed within 14 days,four year trend (HAs)
Non urgent repairs completed within 14 days by delivery type, 2009-10 (HAs)
Providers recorded a completion rate for non-urgent repairs within 14 days of 82.4 per cent, with 98.4 per cent of agency delivered repairs completed within the timeframe.
Non urgent repairs completed within 14 days by delivery type, 2009-10 (HPs)
Tenant satisfaction with maintenanceSix associations provided data for tenant satisfaction with the quality of maintenance conducted. This data showed that overall, 79.8 per cent of tenants responding to the survey14 expressed satisfaction with maintenance.
Tenant satisfaction with maintenance, 2009-10 (HAs)
14 The response rates for the surveys varied between 13.9 per cent and 36.6 per cent (average 24.2 per cent) and the sample size between 76.9 per cent and 100 per cent (average 95.6 per cent).
Providers recorded 83.0 per cent satisfaction with maintenance15. The highest rate was recorded for transitional housing where maintenance is managed by the government maintenance services (NB. data for transitional housing was supplied by four providers only).16
Tenant satisfaction with maintenance by housing type, 2009-10 (HPs)
15 The response rates for the surveys varied between 17.6 per cent and 100 per cent (average 31.1 per cent) and the sample size between 3.3 per cent and 100 per cent (average 85.3 per cent).
16 From the 2009-10 KPM data collection, all agencies are required to use a specific question, developed by the Housing Registrar, for the tenant satisfaction with maintenance KPM
FINANCIALLY VIABLEThe financial viability Performance Standard is measured in terms of operating performance, operating cash flow, liquidity and capital structure. During 2009-10, five additional agencies were registered as providers and one provider was upgraded to association status. As a result comparative financial data for 2008-09 has been adjusted to reflect these changes compared to what was reported last year.
Operating performance Operating revenue and costs Rental revenue of the sector increased to $59.1 million ($36.1 million contributed by housing associations) from $47.6 million in the previous year, predominantly due to the increase in the number of properties managed by the registered sector resulting from capital grants provided under Commonwealth and State government investment programs and five new agencies being registered during the year. As a result of increased activity in the sector (especially the associations), operating expenses increased by 19.3 per cent.
Operating EBITDA (Earnings before interest, tax and depreciation) of the sector increased by 73 per cent reaching $22.4 million during the year compared to $12.9 million in 2008-09. The operating EBITDA margin of the sector was at 15.5 per cent for 2009-10.
Operating revenue breakdown, 2009-10 (HAs)
The proportion of operating grants from total operating revenue declined to 43.3 per cent in 2009 10 from 44.4 per cent the previous year. This shift in the revenue mix was due to rental revenue increasing by 24.2 per cent compared to 22.3 per cent in operating grants. 47.7 per cent of operating expenses consisted of direct administration and operating expenses, followed by corporate overheads (22.1 per cent) and property expenses (13.1 per cent).
Total depreciation expense for the sector during the year was $7.7 million ($5.5m in 2008-09). The increase in depreciation expenses was mainly due to an increase in housing assets. This resulted in an operating EBIT (Earnings before interest and tax) of $14.7 million for 2009-10 compared to $7.3 million in 2008-09.
Out of total operating expenses 70 per cent consisted of direct administration/operating expenses and corporate overheads. This was mainly due to agencies (especially associations) establishing project management teams to manage their development activities, an increase in finance/administration staff and increased costs in terms of managing a larger number of housing units and tenancies – this upward trend in staffing numbers was highlighted earlier in the report.
Operating expense composition of the sector, 2008-09/2009-10
Return on average assetsReturn on average assets (ROAA) of the sector was 1.5 per cent in 2009-10. ROAA for associations was 1 per cent in 2009-10 as a result of a larger asset base of $1.7 billion compared to $1.2 billion in 2008-09.The chart below depicts the ROAA of housing associations. The Housing Registrar noted the improved result for one association after a negative ROAA for 2008-09 mainly due to a negative operating EBITDA in that year.
The ROAA of housing providers (11 per cent on average) was much higher than associations. This was due to the significantly lower asset base of the providers compared to associations.
Return on average assets, 2008-09/2009-10 (HAs)
Operating cash flow The overall operating cash flow of the sector was positive during 2009-10. The total operating cash flow of housing associations was $98.5 million in 2009-10 compared to $19 million the previous year. The main reason for this was an increase in operating revenue as a result of increased rental revenue, operating grants and other income. The total operating cash flow of providers was $17 million compared to $7.7 million the previous year.
Liquidity The liquidity position of the sector is measured in terms of the current ratio (measuring a company’s ability to meet its current liabilities using its current assets which are easily converted to cash). For the sector as a whole the current ratio was 1.7 times in 2009-10 compared to 1.9 times the previous year. The current ratio for the associations was 1.8 times (1.9 times in 2008-09). The main reason for the slight decrease in the current ratio for the associations was the increase in accounts payable related to development work and capital grants received in advance as at the end of June 2010.
Current ratio, 30 June 2010 (HAs)
Associations manage significant growth programs with capital grants and debt funding causing fluctuations in cash flows and some variation in current ratios as a result of timing issues. All associations forecast stable liquidity over the next three years with an average current ratio of 2.7 times. For some associations the current ratio was quite high as a result of high cash balances maintained - due to capital grants received in advance. This will consequently change over time.
A major component of current assets consists of cash and cash equivalents for both associations and providers.
Cash as a proportion of current assets, 30 June 2010 (HAs)
For a few associations, cash as a proportion of total current assets was quite high as a result of unspent capital grants as at June 2010 which were received in advance of payments needing to be made.
Capital structure Total assets Total assets of the sector increased by 44.6 per cent during 2009-10, to $1.8bn. The growth in total assets of the sector was dominated by housing associations whose total assets grew by 43.6 per cent to $1.7 billion.
The increase in equity of the registered sector is due to earnings accumulating over a number of years buoyed by the 75 per cent capital grant contributions and operating grants provided by the State government.
Total asset composition of the sector, 2008-09/2009-10
Total assets of providers as at 30 June 2010 were $100.3m.
Total assets composition, 2009-10 (HAs)
Total assets and housing assets ($m), 30 June 2010 (HAs)
Housing assets of associations have grown over the last four years at a compound annual growth rate of 43 per cent to $1.7 billion by 2009-10. This has been predominantly due to capital grants provided by the Victorian Government and capital grants from Commonwealth Government’s Nation Building – Economic Stimulus Plan.
Interest bearing debt Interest bearing debt is predominantly undertaken by associations for housing developments. As at June 2010 total debt undertaken by associations was $95.6 million compared to $13 million by providers.
Increase in interest bearing debt of the sector ($m)
Total interest bearing debt ($m), 30 June 2010 (HAs)
Interest coverThe interest cover, as measured in the following charts, indicates an agency’s ability to meet interest expenses from EBITDA, and is expressed in the number of times EBITDA covers interest expense. The average interest cover of housing associations was 2.6 times in 2009-10 compared to 2.8 times the previous year. The slight decrease in average interest cover was due to an increase in interest expenses as a result of undertaking additional debt to fund housing developments. The reason for two associations to have a significantly higher interest cover was due to their lower base of borrowings as at June 2010, which will decrease once they start borrowing during 2010-11.
Interest cover based on operating EBITDA, 2009-10 (HAs)
Loan to valuation ratio (LVR) The loan to valuation ratio has been calculated based on the value of the housing assets in comparison to total debt. Average LVR for housing associations (based on the value of housing assets) in 2009-10 was 6.2 per cent compared to 5.8 per cent the previous year. The marginal increase has been due to an increase in debt levels.
Capital expenditure Capital expenditure of the sector totalled $370.4 million, of which 99 per cent was for housing assets. Capital expenditure was predominantly undertaken by housing associations. Housing providers spent $19.7 million as capital expenditure during 2009-10.
Capital expenditure, 2008-09/2009-10 (HAs)
OutlookTotal assets of the registered sector are projected to increase by 57 per cent over the next three years. The growth in assets will predominantly be in the form of housing assets, which are projected to increase considerably during the next 24 months. The level of borrowings will also increase in line with housing development activity (especially with housing associations).
Appendix 1
Key performance measures - definitions Key performance measure 1
Regular board meetings
Meetings convened by the board in quorum in the past 12 months as a percentage of scheduled board meetings for the year.
Key performance measure 2
Active board members (including positions vacant) Active board members (excluding positions vacant)
Board members in attendance at board meetings held in the past 12 months as a percentage of total board positions.
Key performance measure 3
Date of board approval of budget Date of board approval of business plan
Date(s) on which the budget and annual business plan (for the following year) were signed off by the board.
Key performance measure 4
Staff turnover
Staff who left for reasons other than contract term ending during the financial year as a percentage of total staff employed during the year.
Key performance measure 5
Senior staff turnover
Senior staff who left for reasons other than contract term ending during the financial year as a percentage of total senior staff employed during the year.
Key performance measure 6
Turnaround time (vacant tenantable)
Total number of days tenancy units vacant during the year ended 30 June averaged across the total number of vacancies.
Key performance measure 7
Void loss (vacant tenantable)
Rent foregone due to tenancy units being vacant as a percentage of total rent charged (plus void loss) for the year ended 30 June.
Key performance measure 8
Current tenant rent arrears
Rent outstanding from current tenants as a percentage of total rent charged in the year ended 30 June.
Key performance measure 9
Arrears written off as bad debt
Vacated arrears written off as bad debt as a percentage of total rent charged in the year ended 30 June
Key performance measure 10
Evictions
Evictions over the 12 month period as a percentage of total tenancy exits.
Key performance measure 11
Tenancies maintained (long term housing)
Tenancies maintained for the full 12 month period (July to June) as a percentage of total tenancies at 1 July (year start).
Key performance measure 12
Current tenants owing more than 8 weeks rent at year end
Tenants whose arrears total more than eight weeks as a percentage of all tenancies as at 30 June.
Key performance measure 13
Prospective tenant/tenant complaints
Tenant/prospective tenant complaints resolved within 30 days by the agency as a percentage of all tenant/prospective tenant complaints for the year ended 30 June.
Key performance measure 14
Tenant satisfaction – housing services
Tenants expressing overall satisfaction with housing services in a tenancy survey (point in time) as a percentage of all tenants responding.
Key performance measure 15
Tenant satisfaction – consideration of views
Tenants expressing overall satisfaction that their views were being taken into account in a tenancy survey (point in time) as a percentage of all tenants responding.
Key performance measure 16
Urgent requested repairs
Urgent repairs completed within 24 hours as a percentage of all urgent repairs for the year ended 30 June.
Key performance measure 17
Non-urgent requested repairs
Other requested repairs completed within a 14 day timeframe as a percentage of all other requested repairs for the year ended 30 June.
Key performance measure 18
Tenant satisfaction – maintenance
Tenants expressing overall satisfaction with the quality of maintenance conducted in a tenancy survey (point in time) as a percentage of all tenants responding.
