The Real Estate Institute of Australia has proposed an increase to the supply of social housing for tenants transitioning to the private rental market by utilising a currently untapped resource of individual private investors.
In its pre-Budget submission, the REIA said the provision of social housing in Australia is currently financially unstable and characterised by:
- demand exceeding supply;
- a large proportion of stock in disrepair yet on valuable land;
- the system not matching the type of housing with many tenants’ needs;
- the public sector is generally less efficient in managing rental property than the private sector;
- with the exception of Western Australia, there is no assistance to social housing tenants with a good tenancy record and stable incomes to make the transition to the private rental market;
- whilst not always the case, social housing is in larger developments and does not achieve a broad mix of households.
The REIA highlighted The Reform of the Federation White Paper on Housing and Homelessness issued late last year, which pointed out that “since 2004, the number of social housing dwellings per capita has declined in all states and territories except Tasmania, although South Australia and the Australian Capital Territory continue to have the highest number of dwellings relative to their population”.
The REIA said the aim of their proposal is to increase the supply of social housing for those tenants transitioning to the private rental market, utilising a currently untapped resource of individual private investors.
“The scheme recognises that social housing is not meeting demand and is unsustainable without a change in approach,” its submission said.
The REIA proposed the utilisation of untapped small investor resources such as:
- Investors buy a new or existing property for rental purposes. This would be subject to broad guidelines provided by state government agency regarding location, size, number of bedrooms etc and an upper value
- Property manager provides a market value for rental purpose. Rental would be subject to annual reviews
- Owner approaches government agency with details of property and market valuation of rental value for endorsement for transitional housing. A process for approval prior to sale completion may be needed to safeguard and encourage the investor
- Tenant selected from a government list of eligible candidates
- Property manager manages the property