“This is very explicitly a program with two objectives.”
So declared Ben Rimmer, chief executive officer of Homes Victoria – the new state government agency created in Victoria to deliver that state’s biggest ever social housing build.
“(It’s objectives are) both to provide social and affordable housing to Victorians who need that support in getting into the housing market but also to provide direct and important economic stimulus to create jobs, to create economic activity and to get people employing people, employing apprentices and having confidence in their firm and their industry so that the Victorian economy stays strong through this very difficult period.”
Speaking during an online address before the Victorian branch of the Urban Development Institute of Australia (UDIA Victoria) Rimmer was referring to the Victorian Government’s recently announced Big Housing Build, which will deliver the state’s largest ever single investment in social housing.
This is badly needed. As of September, there were 48,529 households on the Victorian Housing Register waiting for social housing. Of these, 25,827 are on the priority list – either because they are homeless or because they have challenges such as family violence or disability. Even for those on the priority list, average wait times are almost a year (11.6 months).
In private housing, an analysis of 19,435 advertisements for vacant rental properties performed by Anglicare Victoria in March found that only 5,522 or 28 percent were affordable for households on the minimum wage whilst just 421 or 2 percent were affordable to those on income support payments.
With the fallout from COVID, the number of households who will need social housing or require affordable housing will rise.
During the address, Rimmer and Homes Victoria Chief Development Officer Michelle Morrison outlined how the program will work and the benefits it will deliver.
Announced as part of the Victorian Budget, Victoria’s Big Housing Build is the state’s largest ever single investment in social and affordable housing.
All up the package involves $5.3 billon worth of investment. Of this, $5.0 billion will be allocated directly toward the creation of 12,200 new dwellings whilst $300 million will be used to renew and improve the sustainability of exiting housing stock. This is new money and will be in addition to other recent initiatives such as the $498 million announced earlier this year for construction and upgrades to/maintenance of existing housing stock and a previously announced $185 million to replace old public housing with new dwellings via a public housing renewal program.
Of the 12,200 new dwellings, 9,300 will be social homes whist the other 2,900 will be ‘affordable’ homes which will be privately owned but will be affordable on lower incomes. Of the 9,300 social homes, 1,100 will be a replacement of existing stock whilst 8,200 will be new homes which will directly take families off waiting lists.
It will be delivered by Homes Victoria – a new government agency which will sit within the Department of Housing and Human Services portfolio and be accountable to the Minister for Housing.
Essentially, the new agency will be a transformed version of the previous Director of Housing which has been relaunched, repositioned and repurposed with new governance arrangements and a new board which aims to incorporate a greater depth of expertise across both the private and public sector.
In addition to managing the new stimulus, the agency will:
- Work with the community housing sector to develop a 10-year Social Housing Strategy
- Work with local governments to develop a Social and Affordable Housing Compact which will set a new financial relationship with local governments to promote collaboration and more housing across Victoria
- Have a holistic stewardship role for social housing which will encompass both public and community housing and will look at how the system works together to deliver outcomes which Victorians need.
All up, the Big House Build program will have four components.
- A $532 million ‘Fast Start’ program to build 500 new social homes and 540 affordable homes on public land.
- A $948 million purchase program to build 1,600 new social housing dwellings and 200 new affordable dwellings through projects which are either commenced or ready to commence before the end of next year.
- A $1.38 billion injection to the Social Housing Growth Fund to fund to deliver up to 4,200 additional dwellings through community housing projects.
- A $2.14 billion program to fund partnerships on land owned by Homes Victoria, other government agencies or departments, non-profits or the development sector where strategic development could occur in a way that delivers positive outcomes and optimal value for money.
The first two components aim to provide immediate stimulus and to deliver new housing quickly. The final two are longer term in nature.
For the fast start program, six sites have been identified at Heidelberg West, Hawthorn, Ascot Vale, Ashburton, Flemington and Richmond. Some RFPs have already been released whilst others will be released between now and March.
The purchase program, meanwhile, has two components.
First, Housing Victoria will ‘spot purchase’ around 596 dwellings on the market to deliver an immediate boost to social housing and to capitalise on current subdued housing market conditions. This has already commenced and some homes have already been purchased.
Second, Housing Victoria is inviting proposals from the development sector and others regarding developments which are either under construction or soon to be in construction and which could include a social housing element. This could include projects which have planning approval but do not yet have sufficient sales volumes to commence building or opportunities for existing projects within the current subdued environment to be repurposed.
A request for proposal is currently in the market and will expire on December 17.
The third component involves $1.38 billion in additional funding to the Social Housing Growth Fund which was established in 2018 to provide government support for the design, construction and maintenance of homes across the community housing sector.
As part of this, a rapid grants process will be launched before the end of the year which will provide grant funding (for capital purposes only) to community housing providers (CHPs) for projects which are capable of commencing before December 31 2021.
Whilst these grants will be provided to CHPs, these are being encouraged to partner with others such as local government, other non-profits and the private sector – the latter of which is expected to be a source of ideas and innovation. Here, the development sector is being encouraged to reach out and form partnerships with CHPs.
To help deliver the Big House Build, two new provisions will be inserted into the Victoria Planning Provisions:
- A Big Housing Build provision which will apply to all projects delivered through the Big Housing Build and will remove the need for any planning permits or planning scheme amendments (not applicable for proposals on rural or industrial land) in order for these projects to obtain development approval
- A ‘business as usual’ provision which will streamline the planning permit process for all ‘business as usual’ projects on residential land which are ‘by or on behalf of’ the Director, such as community housing projects which are funded for residents under the Victorian Homes Register.
These provisions are expected to reduce the time needed for planning approval from eighteen months to three months in the case of the Big House Build and from twelve months to three months in the case of business-as-usual developments.
Four aspects of the Big House Build program are important.
As mentioned above, two of the four components are aimed at immediate activity whilst the other two are longer-term in nature. This is to ensure that the program delivers stimulus both immediately and over the longer term.
On a related note, with 25 percent of the investment expected to go into regional areas, the program will deliver stimulus in various locations across the state.
Third, the inclusion of private, affordable homes as well as social homes in the program will deliver opportunities for lower income households to enter the private housing market and/or to access private homes which are close to transport and employment. It will also assist lower income or vulnerable families to remain in private accommodation and deliver a pathway for people to move out of social housing into lower cost affordable homes within the private market.
Finally, the program has been designed to further develop the skills and capabilities of the state’s construction workforce.
On larger projects, there will be a requirement for apprentices and trainees to make up at least ten percent of the workforce.
Homes Victoria will also develop a gender equity plan and use its position in the market to create opportunities for more women to participate in Victoria’s construction sector.
According to Rimmer, benefits of the Big House Build will be substantial.
Socially, the boost in housing stock will help to deliver a better safety net with safe and secure shelter for those who are either homeless or at risk of homelessness. This will provide a foundation upon which residents may be able to better manage other aspects of their life such as stable employment, further education or recovery from mental illness.
More affordable homes, meanwhile, will deliver benefits for those on low incomes as outlined above.
Economically, the build will help generate an average of 10,000 employment opportunities per year over four years with opportunities for workforce development as outlined above.
Asked why the investment was happening only now when Victoria has had a social housing shortfall for years, Rimmer acknowledged that the timing and scale of the investment is a direct result of COVID but added that the appetite for greater public housing investment had been building for some time.
Whilst welcoming the program, however, he said Commonwealth investment in social housing was a missing piece of the puzzle nation-wide as social housing throughout Australia has historically been a joint Commonwealth/state endeavour.
“I think the scale of the package is a direct result of the economic circumstances that we now face,” Rimmer said.
“I think it would be naïve to believe that we would be talking about a $5.3 billion package with hundreds of millions of dollars’ worth of investment outside of that package if it weren’t for the scale of the COVID economic crisis.
“However, it is true to say that there has been policy appetite building within the Victorian Government for action on social and affordable housing for some time before that. If you go back to the last election campaign, the government announced the 1,000 homes initiative and the public housing renewal program slightly before that. There has been momentum behind this area of policy.
“It’s true to say that particularly through the mental health royal commission, there has been an increasing focus on ‘if we have as a community the idea that people who are experiencing mental illness may need some safety in terms of housing options which help them to recover from their mental illness’ or if I can take a different topic ‘if we accept as a society that people who are escaping family violence might need some safe and secure housing to get them back on their feet as a person and as a family’, then you really do start to form the view that we need to better meet the demand for social housing that is out their in the community.
“I think the government has got itself to that point over the past couple of years.”