Small investors may be the key to alleviating the pressure on the government to sustain growing demand for social housing.
Real Estate Institute of Australia (REIA) president Peter Bushby said social housing was financially unsustainable for the government, with demand exceeding supply by as much as 30 per cent.
“Except in Western Australia, there is no assistance to social housing tenants with good tenancy records and stable incomes to make the transition to the private rental market, and whilst the National Rental Affordability Scheme (NRAS) utilises private sector funding, by its nature, it excludes small scale investors,” he said.
Under its election policies, REIA have suggested tapping into the small investor market to assist Australians making the transition from social housing to the private rental market.
“We’ve proposed investors could buy a new or existing property for rental purposes, which would be subject to broad guidelines provided by the appropriate state government agency/department regarding location, size, number of bedrooms and value,” Mr Bushby said.
“The owner would go to the agency with details of the property and a rental market valuation for endorsement for transitional housing. A tenant would be selected from the department’s list of eligible clients and a real estate agent would manage the property.
“Governments would need to guarantee the rental payment for the term of the arrangement and depending on the extent of the rental subsidy, may need to consider other assistance to the owner to achieve the equivalent net yield if the property was rented in the private market.”
The government’s involvement would be alleviated by putting the responsibility for routine maintenance matters on the managing agent and owner.
“Social housing tenants, just like private housing tenants, would be required to meet the responsibilities of caring for the property and leaving it in good condition at the end of a tenancy,” Mr Bushby said.
“Social housing is provided by governments to low-income households and those people who are unable to find appropriate accommodation in the private rental market. Governments can’t keep up with demand, so surely this is a win-win concept.”