The NSW government is extending leases on 14,000 properties held by community housing providers saying the move will provide more certainty during and after COVID-19.
The leases will be extended from three to 20 years following a change in contractual arrangements by the NSW Land and Housing Corporation (LAHC), property and housing minister Melinda Pavey says.
It comes after about 14,000 government managed properties were transferred to nine CHPs on 20 years leases last September.
“During this difficult time we are creating greater certainty for our Community Housing Providers for rental income, by allowing them to carry out 10 year asset maintenance planning, which is essential in a life cycle maintenance approach,” Ms Pavey said.
“A 20-year lease will enable CHPs to consider leveraging more secure longer-term revenue streams, to grow their portfolio, employ more people and engage with financiers and investors, to ultimately deliver higher quality homes.”
The government is calling for expressions of interest from the state’s 140 not-for-profit community housing providers, starting with the biggest providers who will have the first opportunity to transfer properties to 20-year leases.
The EOI process for the first tranche is expected to be completed by 2021 and after that smaller providers will be able take up 20-year-leases in the second stage of the transition.
Thumbs up from providers
The Community Housing Industry Association of NSW (CHIA NSW) has welcomed the move.
CEO Mark Degotardi says it will provide structural change to allow the sector to extend and create partnerships with investors.
The longer leases mean community housing providers will be able to access finance and investment for more social housing, he said.
It will also meet increased demand for social and affordable rental home expected to arise in response to the pandemic.
“This initiative gives our members more certainty over time and will allow us to access finance and investment for more social and affordable housing. This will provide much needed support for low-income families across NSW at a time where many people are affected by the COVID-19 pandemic,” he said.
Community housing providers have previously partnered with the NSW government in a range of housing programs, including the Social Housing Management Transfer program which saw 14,000 government leases transferred to the sector.
Call for more social housing
Meanwhile, CHIA has called for the establishment of a Social and Affordable Housing Capital Fund after new figures showed surging demand for homelessness service and housing.
A report released by NCOSS on Monday showed increasing calls to tenants and homelessness information hotlines.
Mr Degotardi said demand would continue to increase with the fallout from the pandemic.
“The economic downturn expected as a result of COVID-19 will increase that need dramatically again, well beyond the immediate crisis,” he said.
He called on the government to identify more government-owned land and properties to convert to social housing and establish a fund for 5,000 social housing properties a year for the next ten years.
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