OPINION: New form of funding for affordable housing?
(Continuing our series on the housing situation for older women in Australia who don't own their own homes.)
AFFORDABLE HOUSING is not going to happen without funding. To this end the Federal Government is investigating a new model of financial funding, it's called Bond Aggregator.
Below is an explanation of the process that has revealed the model, a basic description and the next step.
IN response to a variety of voices urging government to intervene to combat surging property prices, which has had an increasing number of Australians with a limited income unable to buy or rent a home, the Federal Government set up a task force.
In January 2016, the Australian Government announced the establishment of an Affordable Housing Working Group.
The Working Group focussed primarily on investigating ways to boost the supply of affordable rental housing through innovative financing models.
These models are aimed at the social housing sector and the private rental market for low-income and disadvantaged households.
In December 2016, the Council on Federal Financial Relations agreed to the recommendations of the report, in particular the establishment of a bond aggregator taskforce, and agreed to make the report publicly available.
The taskforce will design a bond aggregator model and report back to Heads of Treasuries by mid-2017.
AFFORDABLE HOUSING FUNDS TO COME FROM A BOND AGGREGATOR MODEL:
Federal, State and Territory Treasurers have endorsed a recommendation to establish an expert taskforce to design a bond aggregator model.
AHURI research on a bond aggregator model was central to the Affordable Housing Working Group report's bond aggregator model adopted for the Treasurers' affordable housing plan (www.ahuri.edu.au)
The AHURI research outlined the creation of an Affordable Housing Finance Corporation to source funding from the bond market so as to provide lower interest, long-term loans to not-for-profit organisations developing housing for lower income households.
As the AHFC would source large amounts of capital, it means money would be raised efficiently with reduced financing costs rather than in expensive one-off transactions such as when borrowing from a bank.
The AHFC model has been adapted to Australian financial market conditions from established Swiss and UK schemes.
Its benefits are that it is relatively simple and transparent; minimises the impact of debt on government budgets; draws on the successful experience and expertise of other countries; and provides lower cost finance to community housing providers.
AFFORDABLE HOUSING AND THE OLDER PERSON
IN 2011, according to ABS Census data, there were 135,494 women aged 55 and older in the private rental market, up from 91,549 who were counted in the 2006 Census.
These figures are likely to underestimate the real number of older women who are renters, especially those with an informal or sublet rental agreement. Officially, older women now make up four per cent of private rental tenants (as opposed to those living in community or public housing), and, as Australia's population ages, this percentage is set to increase.
In 2011-12, only 11% of the 1,789 older women who needed help with long-term housing received this assistance. The data alone does not provide an explanation for why so few women in search of long-term housing were helped, but the lack of available options - from the expense of private rentals to the paucity of social housing - surely has something to do with it. (Older Women's Pathways out of Homelessness in Australia, University of Qld for the Mercy Foundation, February 2014).
Homelessness experienced later in life is not often the result of past periods of homelessness. It is often triggered by particular events. While the literature and policy-makers have long understood the risk factors of homelessness for older people (such as divorce, separation, loss of partner, ill health, disability), new risk factors are emerging.
For the younger old, employment insecurity becomes a risk factor, as households are less able to afford housing. For the older old, low-income housing options are in short supply and trigger events can accelerate and intensify the risk of homelessness. The lower superannuation contribution for women is also a risk factor to them being at risk of homelessness in older age.
For older people who fall out of home ownership, they are more likely to require housing assistance.
- 2015, October: A request from Treasurers at the Council on Federal Financial Relations for further work on housing affordability.
- 2016, January 7: the Australian Government announces the establishment of an Affordable Housing Working Group (the "Working Group")
- 2016, February 2 - March 11: The Working Group undertake a public consultation process which includes a call for submissions from interested parties on innovative ways to improve the availability of affordable housing
- 2016, December: The Council on Federal Financial Relations (CFFR) meeting Treasurers considered the Working Group's report. Treasurers agreed to the recommendations of the report, in particular the establishment of a bond aggregator taskforce, and agreed to make the report publically available.
- 2017, Mid year: The taskforce will design a bond aggregator model and report back to Heads of Treasuries.
- Gail Forrer is Group Editor of Seniors Newspaper Group.
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