With housing affordability reaching a political flashpoint, developers have a golden opportunity to embrace government policy rather than trying to sidestep it.
So says Dr Michael Fotheringham, managing director of the Australian Housing and Urban Research Institute.
“The overarching emphasis [for government] in all of the states and territories is on investing in more affordable housing supply,” he says.
“But they can’t build it all themselves and so they’ll be looking for developers … and, frankly, there’s a bit of competition to attract private sector engagement.
“So, from a developer perspective, it’s rich pickings in a sense with the governments keen to get on with this.
“They all need to show that they’re sensitive to the housing crisis that we’re all hearing about every day. And so building more housing supply, but particularly more affordable housing supply, is really the main thing governments can do to address this crisis.”
Fotheringham is due to speak at The Urban Developer Affordable Housing Developer vSummit on August 24.
“It’s a golden opportunity for developers to step in now,” he says.
“And the ones that are going to do better with this are the ones who show an appreciation of that inclusion of an affordable housing component and are up for that, rather than trying to sidestep it with other sort of alternatives or offsets.
“Increasingly, all three levels of government in this country are focused on this.
“Local government is getting much more engaged in affordable housing and supply of housing than was ever the case … and, not so much for the big developers but the smaller ones, that's likely to start to generate different opportunities.”
In June, the federal government unveiled its $2-billion Social Housing Accelerator program with funding to be split between state and territory governments to help create thousands of new homes.
“It’s really just the start,” Fotheringham says. “We’re going to need hundreds and hundreds of thousands of affordable homes.”
According to AHURI research, the growth in demand for social housing in Australia will require more than 1.1 million of public housing stock within 15 years.
Its most recent analysis indicated that as of the end of February there was 348,018 of social housing stock across the country—a shortfall of 216,846 homes—and by 2037 an additional 547,036 homes would be needed.
“The truth of it is at federal and state levels we’ve been under-investing in affordable supply for 30 to 40 years. So, you know, there’s no way that we're going to have that fixed by Christmas. It’s going to take years.
“But I think there is cause for some optimism that government has woken up to this.
“And one of the things that we see increasingly is it is looking to do partnerships with private sector developers who've got the skills and the workforce and the contracts to make it work.”
The Urban Developer Affordable Housing Developer vSummit will take place on Thursday, August 24.
