ACT government to fund affordable-rental real estate model

Community Housing Canberra, the ACT’s largest community housing provider, has been given a $230,000 grant from the territory government to establish an affordable-rental real estate model.

The model will be based on the approach of HomeGround – a non-profit real estate agency operating in Sydney and Melbourne – where landlords rent their properties to low-income households at below-market rates. It is managed by a registered community housing provider.

“The model is one whereby the arm of a community housing provider operates essentially as a property management business, like a commercial agency, but with the aim of growing the number of affordable rental properties available in the market,” explained Community Housing Canberra CEO Andrew Hannan.

CHC currently owns and operates more than 400 affordable-rent properties in the ACT.

“The CHC being awarded this grant will enable us to set up what we hope will be called HomeGround Canberra, as part of our CHC entity,” said Mr Hannan.

“We are a non-profit charitable organisation, so any of our activities that generate a return, those returns are directly re-invested in growing the supply of affordable-rental housing in Canberra.”

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Last month, the ACT Greens called for land tax exemptions for landlords if they cut their rents by up to 25 per cent, which is being debated in the Legislative Assembly.

Mr Hannan said measures like tax exemptions would allow more landlords to take up the proposed model.

“The properties are rented out at below market value, so if there were no other incentives you are seeking philanthropic landlords,” he said.

“It’s very likely in Canberra’s inner to middle suburbs, where the land value is very high, but the properties are older and therefore don’t return high rents, that a land-tax exemption could heavily fund that subsidy.”

According to Domain data, Canberra rents are at an all-time high for both houses and units, with weekly house rents on par with Sydney, which is the most expensive in the nation.

CHC received the funding as part of the ACT government’s $1 million Affordable Housing Innovation Fund.

“The fund provides a valuable opportunity to seed housing models focused on creating affordable-housing options in the ACT,” Minister for Housing and Suburban Development Yvette Berry said.

“There has been a lot of interest across the ACT in exploring this approach to affordable housing – including recent interest in the Legislative Assembly – and the government is delivering on its commitment to establish this program.”

Two co-housing projects, the Environmental Collective Housing Organisation and Smart Urban Villages, have also benefitted from the innovation fund.

Mr Hannan said the funding for CHC was “a meaningful step in the right direction”.

“We’re obviously delighted to be a recipient of a grant and would like to thank Minister Berry, Minister Gentleman and the rest of the planning team, this is a small but tangible step by government. Coupled with an exemption there’s a real potential to grow the affordable-rental supply in Canberra,” he said.