With the National Rental Affordability Scheme (NRAS) cut, many Community Housing Providers (CHPs) are considering whether developing affordable housing is a viable business option. This article explores the economics and identifies what CHPs need to consider in making this decision.

The problem

Access to affordable housing in Australia is a significant problem that disproportionately affects low income earners and disadvantaged people.

• Over the last decade, Community Housing Providers have started to develop affordable housing, however the loss of the NRAS means that they must reconsider the viability of this role.
• There are a number of levers which can improve the returns of a CHPs development project, but these must be identified and assessed at the start of the planning process.
• Acting as a property developer exposes CHPs to a range of market-related risks which can be difficult to mitigate.