NRAS vital in increasing affordable housing stock

Responding to media reports today alleging abuses of the National Rental Affordability Scheme, leading housing organisations and peak bodies have expressed strong support for the role of NRAS in starting to address our housing affordability crisis.

The group has instead urged the federal Government to tackle the tax arrangements that are the real problem, inflating housing prices and shutting out people on modest incomes from the housing market.

“If the Government is looking for ways to save dollars, and address our housing crisis at the same time, capital gains tax concessions and negative gearing should be top of the list. Both promote speculative investment in existing housing stock, and further concentration of wealth through property portfolios, that deliver little to stimulate affordable housing supply,” said Dr Goldie, ACOSS CEO.

“At a cost of about $4 billion per year to taxpayers, negative gearing drives up house prices, as well as exposing individual small investors to the vagaries of the housing markets. Well-off investors are the big winners out of housing tax breaks, at a time when every tax dollar and incentive should be going to help people on low and modest incomes into stable and affordable housing. Housing is our real cost of living problem,” said Dr Goldie.

Adam Farrar, Chair of National Shelter said that “Tax incentives for speculative investors are inefficient, expensive and inequitable. They cannot be justified in this climate of fiscal restraint when questions are being asked about the future of a range of programs which assist low and moderate income households, including the National Partnership Agreement on Homelessness and the National Rental Affordability Scheme.

“Australia has a chronic housing supply crisis, especially at the affordable end of the market, and we must maintain efforts to increase supply, including via the NRAS,” he added.

“NRAS plays a vital role in attracting private finance to increase the stock of affordable housing by offering an incentive to investors. It also benefits low and moderate income households, many of whom are not eligible for other housing assistance but who are priced out of the private rental market,” Mr Farrar said.

“A sustained commitment to NRAS is consistent with the Government’s stated commitment to an infrastructure agenda, providing as it does an efficient vehicle for private financing of infrastructure and cost-effective affordable housing program,” Dr Goldie said.

In the five years to 30 June 2013, NRAS has delivered 14,575 dwellings with 23,884 dwellings in progress. The Executive Director of the Community Housing Federation of Australia, Carol Croce, said that “NRAS is doing what it was intended to do:  promoting significant investment where it’s needed at the affordable end of the rental market.”

“Many builders and developers involved with NRAS have reported that NRAS incentives can operate as a counter-cyclical stimulus to the construction industry in times of economic or construction downturn,” she said.

“NRAS has been a significant driver in the expansion of not-for-profit community housing organisations, who have roles as both developers and tenancy managers of NRAS dwellings.  Indeed, more than half of all NRAS recipients are not-for-profit community housing organisations,” she added.

Glenda Stevens CEO of Homelessness Australia said that NRAS had benefitted many vulnerable Australians, including those at risk of homelessness.

“NRAS was never designed to be a social housing program but is delivering benefits to thousands of low and moderate income households. It has also played a role in preventing homelessness by providing secure housing to many people at risk,” Ms Stevens said.

The organisations above are joined by Mission Australia, the National Association of Tenants Organisations, Anglicare Australia, St Vincent de Paul, PowerHousing and People with Disability Australia in highlighting the valuable role that NRAS has played to date. While recognising that there is scope to improve NRAS, including to ensure appropriate incentives to build larger dwellings for families and address administration problems, all agree that the Government should seek to build on the Scheme’s strengths, rather than throw the baby out with the bathwater.

Available for comment:

  • Cassandra Goldie (ACOSS): 0419 626 155
  • Carol Croce (CHFA): 0402 017 557
  • Adam Farrar (National Shelter): 0409 669 936
  • Glenda Stevens (Homelessness Australia): 0405 900360
  • Kasy Chambers (Anglicare Australia): 0401 494 380
  • Nicola Hazell (Mission Australia): 0467 783 421
  • John Falzon (St Vincent de Paul): 0400 845 492