Australia’s state governments, as well as some ambitious local councils, community housing providers and forward-looking private developers, are finally taking note of the housing affordability crisis in our cities.
One proposed solution is to provide relief to cash-strapped households that cannot afford skyrocketing deposits by incentivising a new “build-to-rent” affordable housing sector.
Build to rent simply means developers build housing with the intent of retaining the building and renting it out to lower-income families at prices affordable for those families.
Australia has almost everything it needs to kickstart this sector.
These efforts could not come soon enough: failing to tackle the situation will cost us billions of dollars.
However, state and local efforts cannot reach their full potential unless the Federal Government steps in with something only it has: cash.
US model shows the way
The Federal Government has tried build-to-rent schemes before, with the National Rental Affordability Scheme.
Built off a similar US model, the program rewarded investors in affordable housing with tax credits.
The program’s US counterpart, known as “tax credit housing”, is so popular that a bipartisan group of senators are working to expand its funding by 50 per cent.
Australia’s super funds have even invested in US tax credit housing.
However, Australia abandoned the National Rental Affordability Scheme in 2013.
The Government is instead creating a “bond aggregator” agency to support build-to-rent affordable housing.
This agency will…
click here to read the rest of this story