The $1 billion Victorian Social Housing Growth Fund will deliver additional supply of social and affordable housing.
A dedicated fund has been established to support innovative partnerships between the Victorian Government and consortia including the community housing, private, not for profit and local government sectors. It will go hand-in-hand with the other new social housing initiatives announced by the Victorian Government.
The Fund addresses increasing levels of homelessness, following years of underinvestment in social and affordable housing. It provides a long-term financial commitment to supporting a pipeline of housing development projects on non-Victorian Government land (private, not for profit and local government), and through a program of leasing properties from the private market.
How it will work
The Fund provides an ongoing mechanism for the Victorian Government to partner with the community, private, not for profit and local government sectors to deliver housing assistance to Victorians. It has two distinct underlying programs that support:
- Construction of new social and affordable housing dwellings on non-Victorian Government land – the Build and Operate program (BOP). The new social and affordable dwellings could be part of mixed developments including private housing, or any other form of development that a consortia may wish to propose. To achieve this, the Department of Health and Human Services (DHHS) in close collaboration with the Department of Treasury and Finance (DTF) will operate regular competitive funding rounds to encourage consortia to develop innovative proposals to increase housing supply.
- Recurrent funding to lease new dwellings from the private sector to increase the availability of social housing rental stock and facilitate investment in new social housing for the rental market – the New Rental Developments Program (NRDP).
Funding and administration
The Fund has been set-up using seed capital provided by the Victorian Government, reaching $1 billion in the 2019-20 financial year.
The Fund value will be maintained over time, and the investment returns will be used as the funding stream for the two underlying programs.
The Fund will be jointly administered by the Treasurer and the Minister for Housing.
Commissioning, procurement and performance management of the two programs will be undertaken by DHHS and DTF to maintain alignment with statewide social housing policy and portfolio objectives.
The Fund will be made up of a permanent pool of capital ($1 billion) to be maintained in value over time. Investment returns used to fund the two programs will be provided on an ongoing basis.
How investment priorities will be decided
An annual plan for the Fund will be developed by DHHS on behalf of the Minister for Housing and the Treasurer to establish:
- Key demand drivers and priority areas of need across Victoria that will influence the specification of terms for the competitive funding process
- The proportion of available investment returns from the Fund to be allocated to the respective construction and rental subsidy programs, to be informed by sector capacity considerations in addition to the above.
The annual plan will be developed in consultation with the sector and will also take into account the Director of Housing’s asset strategy.
The investment priorities will be communicated through the competitive process.
How much new housing supply it will deliver
The Fund will deliver a new housing supply in a variety of forms. The construction program will prioritise developments that include social and affordable housing, and the rental subsidy program will utilise newly built dwellings to increase the available supply of subsidised housing.
The mix is expected to change over time in order to best achieve targeted social outcomes, which are to be revisited on an annual basis through the annual planning process.
However, indicative modelling suggests that over the first five years, the Fund could support up to 2,200 households. The final level of new social housing and the balance of support provided between new construction and rental support will be determined through the market process and according to need.
Access to housing
Participating registered community housing organisations will be required to participate in the single Victorian Housing Register (VHR), which also requires that 75 per cent of targeted social housing vacancies will be from the priority access category of the VHR.
Allocation of tenants to new social housing developed through the fund will be coordinated through the VHR.
DTF and DHHS have consulted jointly with the housing industry, financiers and developers on key design parameters for the Fund and its underlying programs. Government will look to secure the best outcomes in terms of social and affordable housing for the investment provided.
The first competitive process seeking submissions from consortia is now closed.
Further details and announcements regarding future funding rounds are expected to be made in the future.
Building Financial Capacity of Housing Agencies
As well as the Victorian Social Housing Growth Fund, the government is also providing over $1.1 billion in low interest loans through its Building Financial Capacity of Housing Agencies initiative.
Find out more about the Building Financial Capacity of Housing Agencies initiative on the vic.gov.au website.