THE government is taking a critical first step in a financing scheme to put affordable housing closer to the reach of 1.3 million low-income families paying rent.
It is announcing a task force to advance the funding of community housing in the form of rent-subsidised accommodation that sits between welfare units and property on the regular market.
It is the first official element of a broader plan, to be outlined in the May Budget, for making home ownership and rentals more accessible, particularly in Sydney and Melbourne.
Treasurer Scott Morrison is launching the Affordable Housing Implementation Taskforce, which he says will “develop an affordable housing bond aggregator model for consideration by the Commonwealth and the states and territories”.
A bond aggregator doesn’t refer to the bonds renters pay on taking out a lease, but the bond market.
The model sources large amounts of capital from the bond market to provide cheap loans, which have a long pay-off deadline so more of the money is available for building affordable housing.
The low-interest, long-term loans would be for community housing for low-income families.
In 2013-14, about 2.7 million households — or 31 per cent of the national total — were renters.
Nearly half of them — 47 per cent of the renters, or about 1.3 million families — were classified as lower-income households.
On Tuesday, the Reserve Bank confirmed findings that rent rises have moderated in most cities.
However, this has not prevented significant “rent stress” for low-income families, who can have to spend close to a third of wages on housing.
In 2013-14, about 42.5 per cent of lower-income households who rented said they were spending more than 30 per cent of their income on housing costs.
“An affordable housing bond aggregator would allow a financial intermediary to attract greater private sector investment into affordable housing,” Treasurer Morrison said today.
“This would give community housing providers access to cheaper and longer-term debt, freeing up capital for the construction of new affordable housing.”
The task force, to report in July, will be headed by Stephen Knight, a former chief executive officer of the Treasury Corporation in NSW and a former member of the Australian Office of Financial Management advisory board.