Affordable Housing forum, Mollymook, 4 November 2004 A practical approach to the development of an affordable housing

1. Affordable Housing forum, Mollymook, 4 November 2004 A practical approach to the development of an affordable housing strategy Hal Bisset Swinburne Institute for Social Research & Ward Bisset Consulting

2. Approach Case studies Projects Strategies Key findings Components of projects Issues for strategies Workshop local strategy

3. Case studies - Projects Community led: Emmaus Community Housing Project Council led: Inkerman Oasis Project Developer led: Victoria Harbour Affordable Housing Proposal

4. Emmaus Community Housing Project Overview South Croydon, Melbourne 3 hectares, residential Church owned site Mixed private, community housing Community centre Players Emmaus Christian Community Ltd Jubilee Housing Inc VicUrban Office of Housing National Australia Bank City of Maroondah

5. Emmaus Community Housing Project Outcome Planning approval for subdivision and medium density development 20 lots sold to owner builders One lot returned to Church for Community centre Medium density lot retained for 19 community housing units Features Community contribution Ownership in Trust by ITEC Tax benefits Project management and development risk by VicUrban Bank loan, net income stream, first mortgage OOH grant Priority Deed

6. Inkerman Oasis Project Overview St Kilda, Melbourne 1.2 hectare, former Council depot site Rezoned residential after remediation and master plan approval Appointed private developer after open tender process Land for community housing deal Players City of Port Phillip VicUrban Williams Boag Architects Ecumenical Housing Port Phillip Housing Association Inkerman Properties Pty Ltd (joint venture) (NB Office of Housing not involved)

7. Inkerman Oasis Project Outcome 237unit, 3-5 level, $50M residential development in 6 buildings Ecologically sustainable design 32 units of social housing Integrated urban art program Features Council role in providing and adding value to land Expertise of state land development agency Private sector development No grant funding from state required Management by Housing Association

8. Victoria Harbour Affordable Housing Proposal Overview Docklands, Melbourne Mixed retail, commercial and residential precinct High “land” value Affordable housing for low wage employees Players Lend Lease Development VicUrban National Australia Bank Office of Housing Melbourne Affordable Housing Docklands Skilling & Employment Victorian College of the Arts City of Melbourne

9. Victoria Harbour AffordableHousing Proposal Outcome 10% affordable housing proposal 55 unit demonstration project Mixed use building Located in prime position Features Land value, developer contribution Target group, rent structure Tax benefits Capital subsidy Loan structure Ownership structure Allocation of risk Management performance Rate concession

10. Key components of an “affordable housing project” Access to land at reduced cost Agency with capacity to manage development risk Support of Council through planning process Strong connections and support of local community Ownership vehicle with appropriate tax status Highly competent manager Incorporation of debt finance based on net income stream Broader income range in target group Flexibility in affordability and rent setting Rate concession

11. Case studies – Council strategies Melbourne Melbourne Affordable Housing Brisbane Brisbane Housing Company Port Phillip Port Phillip Housing Trust

12. Melbourne Affordable Housing Origins City of Melbourne $1M start up capital Merged with Ecumenical Community Housing Board drawn from CBD business community Trustee of several council and church specific trusts Players Cities of Melbourne and Moreland Victorian Council of Churches Office of Housing National Australia Bank Mallesons

13. Melbourne Affordable Housing Achievements 2 CBD projects with MCC support, 40 units, $11M 6 projects with church support, 56 units, $15M $1.5M philanthropic support City of Moreland, $1M trust Features Trustee company Relationship with Councils Relationship with churches Affordable housing developer Debt finance Community business partnership with Mallesons

14. Brisbane Housing Company Origins City of Brisbane Partnership with Qld Housing Department $60M over 5 years committed Development levy under consideration Board comprised of non-government people with relevant skills Players City of Brisbane Housing Queensland Community organisations Private sector organisations

15. Brisbane Housing Company Achievements $50M from Housing Queensland in land and cash $10M for BCC ITEC, DGR and PBI status 3 projects, 101 units completed 5 projects, 157 units in process Features Strong commitment of LGA and SHA Voluntary development contributions Affordable housing developer Tenancy management contracted to CHO’s Debt finance

16. Port Phillip Housing Program Origins City of Port Phillip 14 projects over 19 years $14M invested plus $23M State funding Asset value of $80M Sustainable, growing, independent AHA status, leverage asset base Players City of Port Phillip Port Phillip Housing Association Office of Housing Bank Developers

17. Port Phillip Housing Program Outcomes Proposal under consideration Port Phillip Housing Trust Port Phillip Housing Company 10 year development program, $400K pa, 500 units $65M investment $20M debt leveraged Features Transfer of assets Ownership of trustee company Leverage capital subsidy Allocation of risk (political risk) Management performance Partnership agreements

18. Stop Press: Adelaide Housing Program Young low paid workers and students will be offered reduced rental accommodation in an Adelaide apartment block under a plan to boost the number of people living in the city centre. The project is the first of its type under an affordable rental housing program developed by the Adelaide City Council. The block is a trial project, but Mr. Harbison says the eventual goal is to establish partnerships to create a low cost housing company along the lines of the Brisbane Housing Company. Australian, November 4, 2004

19. Key issues for an “affordable housing strategy” What are the objectives? Who is the target group? Where is the land coming from? How do you reduce the cost of production? Where is the money going to come from? Who is going to own the property? Who is going to manage the property? How will the risks be apportioned?

20. Objectives Population Affordability Security of tenure Location Amenity Equity Ownership

21. Target group Welfare clients Low income wage earners Service industry Agricultural industry Hospitality and tourism Low to moderate income households Older persons Families displaced from the private market

22. Land Council Churches Community organisations Welfare agencies State government Developers Developer levy Inclusionary zoning Density bonus

23. Cost of production Infrastructure Smart planning Density bonus Construction Smart design Local suppliers Group training scheme Margins Partnerships with builders Partnerships with developers

24. Finance Social investment Public debt Public equity Public grants Private debt Private equity

25. Ownership Private sector investment vehicle Private investors Public sector authority Council Joint venture vehicle Community sector organisation Affordable housing trust

26. Management Private sector Real estate agency Public sector Department of Housing Council Community sector Registered housing association Affordable housing company Established by the key players

27. Risks Development risk Construction risk Capital risk Management risk Rental income Property condition Interest rate risk Political risk

28. Key contacts Who do you need to get involved to make this work??????

29. An affordable housing “model”