The NSW government has made its Communities Plus social and affordable housing project in Redfern, Sydney a build-to-rent apartment project as the launch of the new housing sector draws closer.
Previously, appointed investors and Community Housing Provider partners of Communities Plus projects – built on state land – offer 30 per cent of these projects as affordable and social housing and sell the rest.
But with ongoing pressure to produce more institutionally-held rental homes for an expensive Sydney housing market, the government has asked for 70 per cent of the Redfern project to be rental units.
The developer has to hold the apartments for rental for 40 years, when the project is handed back to the government.
"This model is a great addition to Communities Plus increasing housing supply for people looking to rent as well as supporting vulnerable people in need of social and affordable housing," Minister for Social Housing Pru Goward said.
Registered investors/community housing consortiums are about to put forward their expressions of interest for the project 600-660 Elizabeth Street.
With the government offering land for development, and therefore land tax savings, investors will find it more financially feasible to start a build-to-rent project, large-scale apartments held and leased by institutional groups on potential long-term tenures.
"Symbolically, it is a public expression of commitment from this government to the concept of build-to-rent … perhaps more importantly, the government has put its money where its mouth is in contributing land for the project and exempting it from land tax they had created an interesting and attractive institutional investment opportunity," Property Council NSW executive director Jane Fitzgerald said.
The Communities Plus is a social housing program that will deliver up to 23,500 social and affordable dwellings and up to 40,000 private homes over the next 10 years.
The government has a lot more land it can release under this program, including sites at Waterloo, Arncliffe, Telopea, Riverwood and Villawood in Sydney. A government spokesman said no decision has been made to convert these other sites into build-to-rent.