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Social housing is a vital service underpinning the social good of NSW. But, as widely recognised, the social housing system is beset by challenges that limit its social benefits. For example, tenant rents must be low to make social housing affordable for those who need it. But low rents are not financially sustainable for social housing providers, including the NSW Government. This means providers cannot afford to maintain or increase the stock of housing available. The current eligibility and tenure arrangements may also reduce tenants’ incentives to seek employment.

In addition, private housing costs have climbed much faster than household incomes over the past decade. This has contributed to a growing problem with private housing affordability in the broader community. This problem has also increased the demand for social housing. There are now almost 60,000 households on the waiting list for social housing in NSW. The emergence of government-subsidised affordable housing has done little to address this problem.

To help address the challenges facing the social housing sector, the NSW Government asked the Independent Pricing and Regulatory Tribunal (IPART) to review rent models for social and affordable housing services. Our review is one element of the Government’s 10-year strategy for social housing, Future Directions for Social Housing in NSW (‘Future Directions’), released in January 2016. It focuses on the framework for setting rents for social and affordable housing, and the policies and processes for allocating housing assistance in NSW.

The broader issue of private housing affordability is outside the scope of our review. The NSW Government recently announced a package of measures designed to improve housing affordability across NSW.

This report explains the findings and recommendations of our review, and identifies where and why they differ from those proposed in our Draft Report.

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