With the COAG agreement in place for States to transfer up to 35% of their public housing stock to community housing organisations by 2014, national community housing provider Community Housing Limited (CHL) says it is now up to State Governments to take the next step and start making the transfers a reality.
“The State governments are gradually moving on this issue. There is ample evidence to show that this is the right approach and it should happen sooner rather than later,” says Steve Bevington, CHL Managing Director. “Similar to the Australian banking sector, the community housing sector operates within a strong regulatory system to ensure sustainability of the organisations managing their stock within conservative financial margins and stability in the event of changing market situation and property values.”
Mr. Bevington says the regulatory frameworks that exist across the States are robust, and cites examples of growth in social housing stock achieved through ownership transfers of public housing properties to well-governed, commercially astute not-for-profit community housing organisations operating in a regulated market.
For example, in working with the NSW Government in 2012 CHL has secured a $21 million line of credit based on the collateral associated with the planned 138 public housing title transfers it has negotiated with the State. With an additional injection of $22.8 million by CHL through a combination of capital grants, NRAS incentives and private equity, an additional 167 properties will be constructed across the State.
In 2008, CHL was also engaged in a highly successful asset transfer initiative in Coffs Harbour where the tenants of 164 dwellings voluntarily agreed to transfer their tenancy to CHL. Tenants have seen a holistic improvement to services received as well as enjoying an upgrade to every home across the following three years.
“These homes had suffered delays in maintenance and improvement that are indicative of the problems faced by public housing authorities where there are insufficient funds to meet maintenance obligations over time. The transfer allowed tenants to be provided with localised services and improved responsiveness as a whole to their requirements,” says Mr. Bevington.
In Victoria in 2008, CHL received an ownership transfer of 50 properties with a book value of almost $17.5 million from the State Government’s Office of Housing. These properties were already being managed by CHL, and the transfer was made on the condition that it continue to house the same tenant group currently being served, and provide 15% of the book value in additional housing. With the change in ownership, CHL used debt finance on its newly-owned property to build and tenant an additional 16 properties with a book value of $3.5 million – a simple leveraging exercise that delivered well in excess of the 15% target. The ownership transfer included a large block of apartments on Queens Road, opposite Albert Park Lake.
The transfer of public housing stock has therefore proven to be an effective mechanism for CHL to assist more people and families in housing need across a shorter timeframe.
“Through these examples, it is evident that stock transfer as a whole is good for existing tenants and secondarily allows the opportunity to start to deal with the burgeoning waiting list through the construction of additional homes using this mechanism,” says Mr. Bevington.
Community Housing Limited (CHL) is a national and international provider of affordable housing.
Its vision is ‘a world without housing poverty’. CHL is a registered Housing organisation in Victoria and an approved growth provider in NSW, Tasmania, WA and SA. Its international operations are located in Timor Leste, Chile, and most recently India.
CHL is a vertically integrated operation that manages the entire housing lifecycle. This includes securing funding, locating suitable land, project managing, designing and constructing, then managing the tenancy for the long term which includes collecting rents and maintaining the property.
For more information on CHL, contact:
Marketing and Communications Coordinator
t 03 9856 0021
m 0430 555 241