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What the research did: This report examines the supply of subsidised affordable housing via the National Rental Affordability Scheme (NRAS) in Australia and the international approaches of the Low Income Housing Taxation Credit (LIHTC) scheme in the US and the Affordable Rents program in England. The research focusses on NRAS developments in NSW, Qld, Vic and WA from the perspective of affordability, spatial and investment return outcomes.
What the research found:
- While NRAS was flawed in its administration it did achieve considerable success.
- There was an increase in the supply of subsidised affordable rental housing in Australia with 27,606 extra dwellings as at June 2015 and 37,583 expected in total (DSS data).
- Subsidising rents by 20 per cent below market level increased the number of suburbs accessible to income eligible households with the potential to lift a third of all eligible households out of housing stress.
- NRAS properties are predominantly in suburbs with mid-range investment potential, ie. where subsidised rents are 60-80 per cent of the metropolitan median.
- The model encouraged a diversity of housing delivery, unlike the US which was directed to apartments.
- The scheme assisted community housing providers to produce financially viable developments.
- The LIHTC was made permanent in the US after 7 years while NRAS was discontinued after 7 years. The US example showed that the market needs time to mature and tax reform is needed to attract large scale institutional investment.
- There is now a gap in the provision of affordable rental supply in Australia with the added concern that current NRAS properties lose their tax incentives after a staggered 10 year period and may return to full market rent.