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Premier's Innovation Initiative - Social Housing Assets

Exterior of modern apartment buildingInnovative ideas and solutions have endless benefits for the people of NSW. Globally we are seeing the value in new opportunities for the NSW Government to work with non-government organisations and the private sector. Through these partnerships and the Premier’s Innovation Initiative we can deliver new and innovative services to the people of NSW and improve the way we do business.

What we want to achieve

NSW is facing significant challenges in providing access to social housing now and into the future. The NSW Government is interested in opportunities to work with non-government organisations and the private sector to drive innovation that can help increase the size of the social housing portfolio, and deliver better economic and social outcomes.

The EOI seeks innovative ideas on how to improve the supply of social housing assets.

Potential solutions within this area include, but are not limited to, those which:

  • do not rely solely on the government asset base (i.e. proponents may bring their own assets, such as land or other resources);
  • increase the asset base through new or alternative financing models;
  • increase the asset base through new or alternative asset development models;
  • better utilise existing assets through new or alternative asset ownership and management models;
  • propose new cost effective and efficient ways to refresh existing assets;
  • propose innovative ways to extend the life of existing social housing assets.

We are also interested in ideas that extend beyond the social housing asset base and go towards achieving other objectives, including helping to migrate toward a system that is more financially sustainable and improves outcomes for clients. We would be interested in ideas which may include:

» Innovative ideas on how to improve the way the system operates, which may include:

  • New or alternative models of tenancy or asset management;
  • Increasing the role of community housing providers in the management of tenants and dwellings.

» Innovative ideas on how to improve the way clients are managed and supported, which may include:

  • Integrated support packages or services for complex needs clients;
  • Improved education and employment outcomes;
  • Accessible and effective pathways out of disadvantage. 

Applications are able to propose innovative ideas which address other outcomes not listed above.

Why increasing the supply of social housing is important for NSW

The NSW Government is committed to breaking the cycle of disadvantage, rebuilding the State’s finances and driving economic growth in NSW. We need a social housing system that builds on these objectives and delivers an increase in supply and sustainable outcomes for tenants.

Safe, secure housing has direct links to improved health, education and employment outcomes. With 58,000 households on the waitlist, the Government is seeking to:

  • Increase the availability of social housing.
  • Reduce the waiting time to access social housing support.
  • Lower the average length of stay in a social housing property by providing sustainable pathways into affordable private accommodation.

Our successes so far

We have been working to put the social housing system on the right financial footing by:

  • Increasing focus on public housing asset management by creating separate ownership of the social housing portfolio and splitting the assets from the tenancy management.
  • Improving financial management of public housing assets so that we are able to fund a 23 per cent increase in new supply and maintenance in 2014-15 and deliver a net increase in public housing supply over the forward estimates for the first time in nearly ten years.
  • Expanding the role of Community Housing Providers through the transfer of $1.5 billion of property titles to the community sector1. As a result, the sector has increased the supply of social and affordable housing by leveraging government investment and accessing private finance.

Global Examples

  • In the United States, private funding is being steered toward a number of affordable housing projects by markets seeking to position their portfolios into socially responsible or ‘green’ investments. Financial return is the primary objective, with a secondary goal of furthering charitable or altruistic purposes.
  • In Europe, Real Estate Investment Trusts (REITs) are used to invest in property by raising finance and using this money to buy developments. The aim of these funds is to pool equity for investments in an efficient manner. Net returns are potentially bigger because of professional rental management and economies of scale.

1 NSW Auditor General’s Report, Making the best use of public housing (2013)

What’s next

We are now evaluating the Expressions of Interest we have received. Shortlisted applicants will be invited to submit a detailed proposal in June 2015.