[+] Coal Face: CHPs Turn Developers in Affordability Crisis

“There’s no magic pudding for social and affordable housing.” But innovation and impact investment can help to build out the sector’s supply pipeline from the ground up according to a Sydney-based community housing provider (CHP) that is doing just that. Bridge Housing is due to file plans later this year for a $230-million Redfern mixed-use tower at 600 Elizabeth Street and, according to its chief executive Rebecca Pinkstone, it is the first time a CHP has been the lead developer on a social and affordable housing project of this scale. Pinkstone says “direct intervention” from the government is needed to ensure social and affordable housing is commercially viable as rental vacancy rates plunge to 1 per cent in Sydney, the most expensive city in Australia. The sector is at the frontline of the broiling housing affordability crisis in New South Wales and is bearing the brunt of a 13 per cent increase in the number of people on the waiting list for social housing across the state. The NSW government recently appointed a consortium made up of Bridge Housing and national infrastructure developer Capella Capital to deliver the Redfern project on state-owned land, paving the way for hundreds of new homes. Bridge Housing manages more than 3500 properties across metropolitan Sydney and is about to develop its first project, also at Redfern, through the state government program, which is aimed at getting private developers on public land to create mixed-use tenure projects. Pinkstone says the $230-million property play will enable the CHP to create a community facility, a new headquarters for Bridge Housing and to retain almost 40 social and affordable units in perpetuity. Bridge Housing will return about 100 units for social housing to the NSW government, 80 units will be designated for key worker housing and 100 apartments will be built to sell. ▲ Bridge Housing chief executive Rebecca Pinkstone says the Redfern project would be a proof of concept for other community housing providers. Pinkstone says it will be a “true mixed-use tenure” development that flips the old social housing model on its head. “Normally you would have to sell 70 per cent to keep 30 per cent for social housing,” Pinkstone says. “This is the opposite outcome. It goes to show when you are putting a CHP at the centre of the project you can be innovative and make projects stack up. “This site has been to tender and had different iterations and designs for the past 10 years. At one point it had been earmarked for build-to-rent but that didn’t work out. “Our mission is to create more social and affordable housing. We do believe in mixed tenure housing as a solution.” Pinkstone says the Redfern project will be a proof of concept for how community housing providers can innovate and build their own pipeline to address housing affordability and a constrained market. “It becomes a replicable project of how we can create more housing and create good outcomes for many groups of people,” she says. “The development will provide a template for how large-scale development can be undertaken to support a diverse and vibrant city.” The Redfern project is now in the concept design phase following the signing of a PDA with the state government in December. ▲ Inner-city Redfern is 3km south of the Sydney CBD. Pinkstone says the CHP has also paired with Conscious Investment Management to boost supply, where low vacancy rates are causing even bigger headaches. The impact investment fund is buying up properties with a view to providing long-term stable housing for social housing tenants, which will be particularly crucial as the federal government’s National Rental Affordability Scheme is wound up. Pinkstone says housing affordability was a key issue for housing providers in 2023. “With 1 per cent vacancy rates in Sydney we really are seeing the impact of that on homelessness,” she said. “We’re seeing an increase in demand for our services. There are 57,000 people on the waiting list for social housing in NSW. It’s gone up 13 per cent in the past 12 months alone. “We’re seeing that demand from groups such as older women who are being priced out of the rental market—there’s just not enough supply.” Pinkstone says the only way to ensure adequate social and affordable housing is with direct intervention. She says while about 500 properties being added to social housing supply each year, this is not meeting demand. Compounding this problem is the likely dwindling supply of private rental housing which was subsidised by government to provide additional affordable housing stock. Ongoing interest rate hikes will force private landlords to reassess the viability of these programs. Pinkstone says the key to success is bringing together stakeholders to release more land for the sector, funding support from the federal government and layering that with institutional investors (largely superannuation funds), finance partners such as impact investors, and the National Housing Finance and Investment Corporation. “We look at different ways of solving the issue … I think there are lots of solutions to the problem, it’s down to the site and how it can work.” Construction is expected to begin in 2025, and will create more than 700 jobs during the project, subject to planning approval. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. 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[+] Coal Face: CHPs Turn Developers in Affordability Crisis

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