ACT government urged to create a new trust to fund affordable housing

ACT government urged to create a new trust to fund affordable housing

The ACT government needs to create a new public trust to fund more social and public housing across the city, funded by the territory's rising land-based tax revenue, a key stakeholder has urged.

ACT Shelter's executive director Travis Gilbert called for the fund to be created on Monday, coinciding with the start of Homelessness Week, as the community awaits a new affordable housing strategy that has been in the works for months.

ACT housing minister Yvette Berry is under pressure to detail the government's plans to increase affordable housing.

ACT housing minister Yvette Berry is under pressure to detail the government's plans to increase affordable housing.Credit:Dion Georgopoulos

The proposal comes as the territory government faces pressure to release the strategy, as renters struggle to make ends meet, and follows Chief Minister Andrew Barr earlier this year being forced to cough up an extra $2.5 million to meet rising demand for concessions from low income earners.

ACT Shelter's proposal centres on a government-run trust fund that would supply more affordable rental properties, both for public and community housing, in a bid to reduce homelessness in Canberra, that would also be able to access help and potentially investment from the private sector.


But comments from Housing Minister Yvette Berry indicate the territory government has little appetite for acting the proposal, instead referring such issues to the Commonwealth's initiatives.

Mr Gilbert said he believed the best way to fund the proposed trust would be through the government's tax revenue windfall it has received above expectations when it started to cut stamp duty rates.

Former ACT Treasury policy director Dr Khalid Ahmed's analysis suggests the government has reaped at least $41 million in extra revenue since the tax reforms began in 2012, that it did not expect to at the time, breaking a pledge the reforms would be revenue-neutral.

While the government has rejected the specific figures Dr Ahmed came to, it has since admitted its own-source taxation revenue has risen more sharply since the reforms began than before.

Mr Gilbert said as the vast bulk of that revenue - largely derived from rates, land tax, and the lease variation charge among others - was derived from land and housing, the government should invest the proceeds into affordable housing projects.

While the ACT Council of Social Service has repeatedly called on government to create a $100 million fund to provide more social and public housing, those calls have, to date, fallen on deaf ears in the Chief Minister's office.

The ACT Shelter proposal does not come with a potential cost figure attached to it, as the small non-government organisation did not have the resources to be able to complete modelling to cost it.

Mr Gilbert said the trust could potentially capitalise on the land held by churches in the city, and also potentially get architects or other industry players to provide services for free to cut the costs of building new affordable housing.

"What we're really looking for is having the fund make a realistic investment in affordable housing for rent, because you're generally talking about people who don't have a lot of income to pay rent," he said.

"In the absence of a significant Commonwealth pipeline of money to increase supply and a private market for rentals that means you basically can't afford rent if you're on less than $40,000, I'm trying to figure out how the government can get the best bang for their buck in terms of housing outcomes."

Mr Gilbert also said ACT Shelter had found common ground on the proposal with key industry players including the Housing Industry Association and ACT Property Council, but everyone was waiting on the government to detail its plans.

But Ms Berry said in a statement that "as I've said before" the consultation process for the new strategy had yielded many suggestions that are being considered.

"You must remember the federal government has put itself forward as the jurisdiction to offer finance for community housing development through its 2017 announcement of a bond aggregator," she said.

Ms Berry said she also hopes to support community housing providers to access funding under the federal aggregator - likely referring to the Cabinet's decision to force the ACT's largest community housing provider to repay a government loan at $2.5 million a year, and the government's subsequent move to refer its requests for support to the Commonwealth.

"We hope to support ACT community housing providers to access funding under this policy but delivery from the Commonwealth has been frustratingly slow.

He said it was not in the interests of a property investor to cut rents, such as under a proposal from various community organisations for a land tax exemption for investors who cut their rents, and in the absence of the affordable housing strategy, ACT Shelter was trying to voice new options for the territory government.

"It takes a home to end homelessness, and if you still don't have somewhere to live after months of support in crisis services, if they leave the service still homeless than that's not a good outcome for anyone," he said.

Daniel Burdon is a reporter for The Canberra Times

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