The federal government has established a taskforce to look at new ways to promote millions of dollars of investment in community housing that could benefit one in three Australians.
One proposal is to create an affordable housing finance corporation, which would use capital from the bond market for long-term and low-interest loans to the community housing sector.
“It’s not the solution, but one part of the solution,” Treasurer Scott Morrison told ABC radio on Friday.
The concept, which the treasurer says works successfully overseas, utilises a so-called “bond aggregator” model to fund affordable housing.
Typically, community housing providers, which provide affordable properties to rent, pay higher interest rates and have shorter terms in which to repay loans.
The proposed affordable housing finance corporation would raise large sums of money at lower rates and for longer terms and distribute the money – lowering costs for community groups.
“We must make the money go further,” Mr Morrison.
The government hopes to kick-start the building of hundreds of new community houses at the lower end of the market, especially in Sydney and Melbourne.
The taskforce will be headed up by Stephen Knight, who has had extensive experience in debt capital markets as CEO of the Treasury Corporation in NSW and as a member of the Australian Office of Financial Management advisory board.
The group will report back to the government by the middle of the year.
Mr Morrison said housing affordability issues were impacting on the 30 per cent of Australians who live in rented homes, and those who relied on affordable and social housing.
The government is also believed to be considering other options, including “rent to buy” and shared equity housing models.
Meanwhile, the existing National Affordable Housing Agreement to boost public housing stock is under threat after Mr Morrison queried its effectiveness.
The commonwealth provides about $1.3 billion a year to the states and territories through the Labor-initiated agreement.
“I’m frustrated with it because we spent all of that money and the number of people on housing waiting lists has gone up … and the number in rental stress has gone up,” Mr Morrison said.