12/09/2014 - 14:36

NRAS changes hit Fremantle project

12/09/2014 - 14:36

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An affordable housing development in Fremantle is no longer certain to proceed due to the federal government’s scrapping of the National Rental Affordability Scheme.

NRAS changes hit Fremantle project
EMPTY: The building at 7 Quarry Street has been vacant since June 2012. Photo: Attila Csaszar

An affordable housing development in Fremantle is no longer certain to proceed due to the federal government’s scrapping of the National Rental Affordability Scheme.

The proposal, which was initially floated in January this year, was located at a City of Fremantle-owned site at 7 Quarry Street, slated for sale to prominent Freo developer Bruce Moriarty’s Fremantle Park Investments.

A condition of the sale, which was expected to fetch the city between $2.6 million and $2.7 million, was based on 25 NRAS credits being provided for the site, to ensure any homes developed would be offered to low and medium-income earners at below-market rents.

Mr Moriarty’s plan was to construct 22 two-bedroom units and five one-bedroom apartments on the 1,477-square metre site.

Concept plans had been provided to the City of Fremantle’s design advisory committee, but the project had not proceeded beyond that point.

However, the federal government’s May budget has put the project in serious doubt, with funds previously earmarked for the NRAS scheme set to be returned to finance other projects.

The city said in its council meeting last month it would not be able to proceed with the sale without the NRAS credits in place, as the original intent of the development – to provide affordable housing – could not be satisfied.

But the City of Fremantle resolved to allow Mr Moriarty more time to develop a new proposal to achieve similar outcomes to the original plan.

The city said the changes to the NRAS scheme were through circumstance and not any direct action by FPI, so it considered it appropriate to allow more time to deliver a new proposal.

FPI, which believes the city has a legal obligation to proceed with the arrangement, has been given until the end of November to come up with a new proposal, with the condition that it is not significantly different to the original plan.

Mr Moriarty is overseas and could not be reached for comment.

Other options considered by the city included advertising the site for sale on the open market, or not proceeding with the arrangement entirely.

The NRAS scheme was established in 2008 to provide affordable homes for low to moderate-income households, with rents offered at 20 per cent below market value.

Developers and investors buying into the scheme are given tax-free incentives

Since 2008, the scheme has delivered 14,575 residences Australia wide, while there were 23,884 more in the pipeline before the federal government’s changes in May.

The Abbott government expects savings of $235 million over the next three years through scrapping the scheme. 

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