30/08/2005 - 22:00

Affordability model elusive

30/08/2005 - 22:00

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While government and private industry emphasise the importance of affordable housing, the best model for delivering affordability remains unclear.

Affordability model elusive

While government and private industry emphasise the importance of affordable housing, the best model for delivering affordability remains unclear.

As WA Business News reported last month, no tenders were received for the first three lots released in the East Perth Redevelopment Authority’s (EPRA) Riverside (formerly Gateway) project, amid developer claims that onerous requirements, including an affordability component, made the project unattractive.

In exchange for higher density EPRA said developers were to provide a component of affordable housing.

Developers said the site needed the higher density to be viable, and that the affordability component was questionable for prime riverfront land.

It is understood that EPRA will be re-releasing the lots within a four to six-week time frame, and industry sources suggest three adjacent lots will be released at the same time.

Australand general manager WA Chris Lewis said there were better ways to deliver affordable housing than simply putting the burden on developers.

“Affordability is a very complex issue with many models bandied around, but I believe the most appropriate way to deliver affordability is the shared equity model,” Mr Lewis said.

“There is an abundance of private capital in super funds and trusts that could facilitate this model.”

Mr Lewis said the model for EPRA’s Riverside project wasn’t appropriate and ultimately there was a question of who should be paying for affordable housing.

Affordability was very important in terms of the community, he said, and home ownership enabled the property cycle to keep going.

Housing Industry of Australia WA executive director John Dastlik said incentives had to be good enough to entice developers to become involved in sites.

“We don’t support the concept of affordable housing quotas – it is not what we consider a sensible option,” Mr Dastlik told WA Business News.

“The burden of providing the affordable housing is just passed on to other purchasers in the locality rather than the overall community paying for it.”

He said levies and quotas of affordability had been applied in Sydney with minimal impact to the level of affordable housing stock.

Mr Dastlik agreed with Mr Lewis that a shared equity model should be looked at.

“The shared equity model will no doubt come in to play as it becomes more difficult for people to enter the housing cycle,” he said.

The State Government is expected to release a draft document later this month to guide its response to affordability, sustainability and equity across the housing sector.

Housing and Works Minister Fran Logan said the Government-backed Keystart home loans were developing a range of shared equity models to supplement the home loan products range now available for people with disabilities, public housing tenants, and Indigenous buyers.

The Department of Housing and Works is proposing to create and market 455 lots around the state for less than $112,000, with the location of the lots yet to be formalised.

Mr Logan said housing affordability was a national issue, and WA was working with federal and other state governments to create a framework for resolving affordability issues with sustainable solutions.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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