A social housing development in Lilyfield, Sydney.

The NSW Government’s announcement of a dedicated social and affordable housing fund aiming for $1 billion has been welcomed by the social housing sector.

The Baird Government announced on Thursday it would sign a memorandum of understanding with the peak body for NSW social services, NCOSS, and the NSW peak body for infrastructure, Infrastructure Partnerships Australia, to commit to build additional social and affordable housing if re-elected.

“This agreement marks a true collaboration – we are bringing together NCOSS’ commitment to working for those most in need, with IPA’s know how on delivering infrastructure for the future,” Premier Mike Baird said.

Mr Baird said the privatisation, or leasing, of the electricity network would fund the commitment.

“What this MoU shows is that the lease can also provide the capacity to protect the most vulnerable,” he said.

“We have listened to the community and know we need more social and affordable housing. I am excited about this MoU as it is the first step towards a new model for the building of new homes for those who need them most.”

Excitement abounds, but details sketchy

The move was called a “watershed moment” by social housing provider SGCH.

“This can truly be a watershed moment for social and affordable housing and we are thrilled that the NSW Government is eager to work with the Community Housing sector,” SCGH chief executive Nazha Saad said.

“When thousands of people are waiting 10 years for social housing, we know something has to change.”

NCOSS chief executive Tracy Howe agreed the announcement was badly needed for NSW.

“Access to social housing is one of the most important drivers for addressing poverty and disadvantage,” she said. “Yet there are nearly 60,000 households on the waiting list to access social housing in NSW, waiting times are over 10 years in a number of areas and affordable housing options are scarce.

“A fund to leverage $1 billion in new housing stock is a commitment that will genuinely start solving this growing problem.”

Details are yet to be finalised, though Mr Baird said a potential model of funding being considered was “based on the Local Infrastructure Renewal Scheme, which provides councils with a subsidy in interest costs to make it affordable to take out major bank loans to fund their projects”.

The figure also hasn’t been settled on, with family and community services minister Gabrielle Upton saying the figure would be “up to $1 billion”.

Ms Howe said a “clear, funded plan supported by all sides of politics” was required.