Posted on October 26, 2022 by Lindsay Taylor
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ALERT: Federal Budget, National Housing Accord & Implications for Planning Systems
On 25 October 2022, in conjunction with the Federal Budget, the Federal Government announced the ‘National Housing Accord‘.
The Accord represents a national initiative to address the supply and affordability of housing. The Government’s stated aim is ‘align for the first time the efforts of all levels of government, institutional investors and the construction sector to help tackle the nation’s housing problem‘.
The Government has identified home ownership as having ‘become increasingly difficult for Australians to achieve, as housing prices have outpaced incomes‘ and renters ‘experiencing deteriorating conditions with rents increasing and vacancies low‘. It also identifies ‘capacity constraints‘ in the residential construction industry affecting the supply of new housing.
The Accord is intended to co-ordinate the efforts of all levels of government, institutional investors and the construction sector for that purpose.
The Treasurer has established the ‘Investor Roundtable‘ to explore further areas of work to promote investment in housing. It will bring together leaders from the investment community including from some of Australia’s largest superannuation funds, the major banks and global asset managers. the Investor Roundtable will meet for the first time next month.
The Federal Government’s key role through the Accord is to stimulate investment to ‘support a sustainable, long-term pipeline of additional housing supply and help take pressure off affordability‘.
The Housing Accord sets ‘an initial, aspirational target of one million new, well- located homes‘ over 5 years from 2024.
The Budget provides $350 million in additional Federal funding to deliver 10,000 affordable homes over five years from 2024 at an energy efficiency rating of 7 stars or greater (or a state or territory’s minimum standard). This commitment is in addition to the 30,000 new social and affordable dwellings.
The Federal Government’s housing commitments will be delivered through the new $10 billion ‘Housing Australia Future Fund‘. The funding is intended to incentivise investment in social and affordable housing by superannuation funds and other institutional investors.
Under the Accord, State and territory governments have agreed to provide in-kind or financial contributions that enable delivery of up to an additional 20,000 homes in total.
Some immediate actions and areas for further work under the Accord include the following:
- States and territories will expedite zoning, planning and land release for social and affordable housing, including looking for immediate opportunities to free up well-located state land,
- the Commonwealth will provide financing options through the Housing Australia Future Fund to facilitate institutional investment in social and affordable housing,
- the Federal Government will work with local governments to deliver planning reforms and free up landholdings,
- institutional investors will be incentivised to leverage investment that delivers for their members’ interests and for the national interest,
- construction sector peak bodies will be asked to support high energy efficiency rating construction, the training of more apprentices under an extended Australian Skills Guarantee and work to make housing more responsive to demand.
The Australian Local Government Association has committed to working with state and territory local government associations to advocate for a commitment from the nation’s local councils to support the delivery of social and affordable housing.
The new independent ‘National Housing Supply and Affordability Council‘ will be commissioned to review barriers to institutional investment, and innovative financing models in housing. It will advise the Federal Government on housing policy and will be responsible for delivering advice on options to improve housing supply and affordability, reporting on key issues in housing policy, and promoting the regular collection and publication of data on housing supply, demand and affordability.
The Federal Government will also expand the remit of the $1 billion ‘National Housing Infrastructure Facility‘ in order to more flexibly deploy up to $575 million to unlock over 5,500 projected new dwellings, accelerate housing supply and seek to attract more institutional capital to the sector.
For more information on the implications of the Federal Budget and the National Housing Accord on the NSW planning system, please contact Dr Lindsay Taylor.
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