The Victorian government hopes to deliver an Australian-first social housing project through the leasing of public land to private developers
Three publicly owned precincts in Melbourne will be leased for 40 years at a nominal peppercorn fee to allow construction of more than 1100 new dwellings, 619 of which will be social housing.
At the end of the 40 years, the entire portfolio will come under the ownership of new state government agency, Homes Victoria.
“This project delivers benefits immediately and in the long-term, with hundreds of new social and affordable homes as soon as the project is finished, and more than a thousand at the end of the lease,” Victoria housing minister Richard Wynne said.
Partnering with the government will be a consortium called Building Communities consisting of not-for-profit housing agency Community Housing Limited (CHL), real estate financier Tetris Capital, building company Icon Kajima and developer Citta Property Group.
The Victorian government will pay the consortium an initial $50 million as well as ongoing payments of around $450 million over 40 years in order to finance, design, construct and manage the developments, as well as conduct maintenance and upkeep.
If the dwellings are not maintained to a sufficient standard the government can cease payments on those properties.
Three existing social housing precincts consisting of 445 “outdated” dwellings in Melbourne’s Brighton, Flemington and Prahran will be demolished to make way for more than 1100 new homes.
Across the three precincts, the new development project will deliver 619 new social housing dwellings, 126 affordable homes and 365 market rental homes, including 52 specialist disability accommodation dwellings.
Homes will consist of one, two, three and four-bedroom homes designed to meet the needs of individuals, couples and families.
The developments will be based on an integrated housing model, with the Brighton and Prahran sites achieving a 51:49 split of social to private housing, and the Flemington site achieving a 66:34 split of social to private.
A spokesperson from the Victorian premier’s office told The Fifth Estate the dwellings would be operated through the existing social housing system and made available to those on the social housing waiting list, as well as being used for homelessness alleviation.
CHL subsidiary, Horizon Housing Realty will operate the private market and affordable housing dwellings. These will operate under a build to rent model meaning they are not intended for purchase by occupants.
Through a combination of debt and equity, CHL will invest around $500 million towards the development
“This unique, truly integrated partnership with Homes Victoria leverages the combined expertise, innovation and financial strength of the private sector…to provide all Victorians with affordable and sustainable housing,” CHL said in a statement.
Construction is expected to begin by late 2021 and be completed in early 2024, with the project expected to create 4635 jobs.