Some of the University of Canberra's "affordable" housing, subsidised by $130 million of Commonwealth and ACT grants, is in reality more expensive than private rentals in Belconnen, a government report has found.
Almost 1000 units were built using federal and ACT government subsidies under the National Rental Affordability Scheme, introduced to boost housing for low and moderate-income households. The current subsidy is $11,100 a year for each unit, three-quarters of which comes from the federal government.
To qualify for the subsidies rent "must always remain at or below 80 per cent of market value rent", according to the national rules.
The ACT government says while the university's flats are more expensive than nearby private rentals when they have two or more bedrooms, they are much cheaper for studios, which make up the bulk of the new units.
Of 957 flats that are subsidised under the scheme, 769 are studio apartments. The median price for them in 2016 was $225 a week, compared with $340/week in the private market nearby, in a government comparison. But the rent comparison combines studios with one-bedroom apartments, making it difficult to unpick. Single studios at the university are 18-19 square metres; studio doubles are 35 square metres.
Two-bedroom subsidised university dwellings charge students a median $436 a week, compared with $400 for private rentals nearby. Three-bedroom dwellings are also more expensive under the scheme, costing $534 a week, compared with $460 in adjacent suburbs. The same picture applies to four and five-bedroom dwellings. The government says the multi-bedroom properties are more expensive than the private market because the university charges per room.
It concedes "a substantial number of students in NRAS accommodation appear to be paying above-market prices for their accommodation", but it says the student housing has "a number of qualitative advantages ... to consider when evaluating whether these students have received value for money".
It points to proximity to the campus, ease of making friends, the ability to organise accommodation in advance for overseas students, and avoiding the strong competition for homes at the start of the academic year.
In 2015, Auditor-General Maxine Cooper recommended the ACT government review whether the program had delivered affordable accommodation to students. Last week, the government tabled its response, arguing it had been a success.
As well as advantages for students, the new flats at the university were also likely to have had a positive effect on affordability in the broader rental market, by easing pressure on private rentals, the government said.
"Accordingly, we are able to reasonably conclude that the ACT government's support for the UC's application to the NRAS scheme has had a positive impact on housing affordability for both students at UC and the broader rental market," it concludes.
Dr Cooper said the ACT gave the university $97 million of loans and credit, $6 million cash, and a gift of Arscott House, worth $9 million, as its contribution under the scheme.
In 2014, the university sold 605 of its entitlements for subsidies under the scheme to Westpac, for $42 million. The subsides now go to Westpac, while the flats are still managed by the University of Canberra.
The federal government has since scrapped the scheme, saying it had failed to deliver for low and moderate income Australians and had been "plagued by the late delivery of dwellings, trading of incentives, multiple changes to agreed locations, leasing to international students and rorting". The government is honouring the 10-year deals in place.
A spokesperson for the federal Department of Social Services said organisations receiving subsidies had to submit a statement of compliance for each dwelling every year.