This study investigated the opportunities and risks for social impact investments (SII) to improve housing and homelessness outcomes in Australia. It described what social impact investing is and its application to housing and homelessness policy in Australia, as well as examined different finance models and structures, SII markets and case studies.
Australia faces numerous and complex housing policy challenges. The waiting lists for social and affordable housing are long (and a significant proportion of the social housing stock is no longer fit-for-purpose), large proportions of the population are in housing stress and too many people are experiencing homelessness. At a time of diminishing resources, new and scalable solutions are required to address these challenges.
Social impact investment (SII) is one innovative and growing mechanism for funding solutions to complex social problems. SIIs are investments intending to generate social and financial returns, while actively measuring both (SIIT 2014a; GIIN 2016). SIIs aim to bring together government, philanthropic and mainstream capital, and cross-sector capability to help address social problems.
SII has gained renewed interest from individuals (philanthropists, social investors), institutions (foundations), policy-makers, and increasingly, mainstream financial markets (asset managers) in the United States (US), the United Kingdom, Canada, Australia and other developed economies seeking to address a broad range of social issues, including housing and homelessness.
Government has a key enabling role in developing the SII market for housing and homelessness in Australia, controlling many of the levers that could remove barriers for other actors in the system, as well as many of the levers in the broader housing market that influence both the size and shape of the housing affordability challenge.
For both social and affordable housing there exists a significant financing gap (exacerbated by current housing market conditions in Australia), and government has a critical role in filling it if it wishes to engage the investment community in collaborating and contributing to solutions.
SII presents significant opportunities to contribute to housing and homelessness outcomes in Australia, but it is not a panacea. It will not be the most appropriate nor the most effective solution in all cases. Further, where SII does have a role to play, in many cases it will need to be implemented alongside other funding solutions and policy interventions.