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Government to Build 100,000 Affordable Rental Properties and Kick-Start Housing Construction Reform
Media Statement - 3rd March 2008
The Australian Government today formally established a significantly expanded National Rental Affordability Scheme.
The National Rental Affordability Scheme will fund tax incentives
for investors to build up to 100,000 new affordable rental properties.
The new target of 100,000 properties doubles the Government’s pre-election policy of 50,000 new affordable rental properties.
This doubling of the number of affordable rental properties to be
built under the scheme reflects the severity of the housing
affordability problem in Australia.
This measure is one of a range of policies the Australian
Government is implementing to assist Australian families under
financial pressure.
It was also announced today that the Government will invest up to
$30 million to streamline and move online, the approval of Development
Applications.
100,000 new affordable rental properties
The National Rental Affordability Scheme is an innovative policy
initiative to create a new ‘asset class’ of affordable rental
properties, because there is currently very little investment from
institutional investors in residential property in Australia.
Under the Scheme, the Commonwealth will provide private investors
with tax credits of $6,000 a year for ten years for new properties that
are rented at 20 per cent below the prevailing market level.
States and Territories have agreed to provide $2,000 per home
either through cash payments or in kind, such as via the provision of
cut price land or concessions on stamp duty.
The initiative would mean, for example, that rent on a new average
three bedroom unit would fall for $350 a week to $280 a week – a $70
saving.
It was announced in Brisbane today that if the previous target of
50,000 is reached by 2011-12, the program will expand if market demand
by both renters and investors is strong to allow for the construction
of 100,000 properties from 2012 onwards.
Industry forecasts suggest that the deficiency of housing stock will not be eliminated by 2011-12.
Streamlined planning approvals
The Government will invest up to $30 million to roll-out
nationally electronic development assessments (eDAs) and online
tracking services to streamline planning approvals and cut the cost of
new homes.
Currently, delays in planning approvals create ‘holding costs’
such as interest and land taxes, which the housing industry says push
up the price of new homes by tens of thousands of dollars.
Starting with high growth areas and then moving to all councils by
the end of next year, the program will fund IT infrastructure,
particularly software, so local governments can streamline their
planning processes.
The implementation of this program will be discussed at the
meeting of the Local Government & Planning Ministers’ Council in
Brisbane on March 27 this year.
The program will reduce costs and development times, thereby
reducing the costs ultimately passed on to homebuyers. The effect will
be to reduce the cost of new developments and individual building
projects, thereby improving the affordability of housing.
This initiative will be implemented as part of the Housing
Affordability Fund, which will invest $500 million over the next five
years to reduce infrastructure charges and streamline planning
approvals processes – to make it easier for working families to buy new
homes.
