Current funding framework

Community housing is an essential part of the Victorian Government’s strategy for increasing the supply of affordable rental housing.

In May 2007, the Victorian Government committed $300m for Housing Associations to deliver at least 1550 new homes by July 2011. This was built on previous funding of $220m since 2002. Through this funding, the government will contribute up to 75% for a given project, while the Housing Association is required to contribute 25% through borrowings, local government contributions, private investment, and/or philanthropic partners.

Housing Associations also build stock via ownership transfer. In 2008, the Victorian Government transferred the management of 550 properties worth more than $175m to these organisations.

Through the National Affordable Housing Agreement (NAHA), the Federal Government committed a further $80m for Housing Associations to deliver 500 homes in Victoria by July 2010.

In 2008, the Federal Government introduced the National Rental Affordability Scheme (NRAS), a $1.2b financial incentive package to attract private investors, including developers and builders, to boost the supply of affordable rental housing. The national target for this scheme is 50,000 new homes by 2012, of which Victoria is likely to deliver around one-quarter. The scheme offers a direct or in-kind financial incentive for developers of $8,000 per home per year, on condition that these properties are rented out for ten years at a rate that is at least 20% below the market rent. Housing Associations can either act as the owner-developer or the tenancy manager of the properties.

In 2009, the Federal Government announced the Nation Building package, which for Victoria equates to $1.5b to deliver 5,000 new homes by the end of 2010. Through this funding stream, the government pays 100% of the project cost.

This is the single largest investment in affordable housing ever made (in real dollar terms). In Victoria, Housing Associations plan to work in partnership with the private sector to deliver this housing.