Community Housing Innovation Fund (CHIF)

This CHIF approach is unlocking new and exciting development and acquisition opportunities by partnering with the community housing sector, adding to the strong pipeline of new housing being delivered to support vulnerable people.

The combined total value of CHIF Round 1 and CHIF Stimulus projects is nearly $170 million with CHPs contributing around $93 million. An estimated five people are employed for each $1 million of building activity, which equates to around 850 jobs that will be created or sustained.

This CHIF approach is unlocking new and exciting development and acquisition opportunities by partnering with the community housing sector, adding to the strong pipeline of new housing being delivered to support vulnerable people.

The CHIF seeks to enhance the viability and longer-term sustainability of the community housing sector by supporting the growth of Community Housing Provider (CHP) owned portfolios. It also seeks to support the diversity of CHPs operating within the social housing system in NSW by offering smaller grants for identified projects thus allowing CHPs of all sizes to participate in the program.

The CHIF is based on a co-contribution model and seeks to leverage the additional resources providers are able to contribute to New Supply projects including debt, capital, land, tax concessions, philanthropy etc. along with community networks partnerships and local connections that can support tenants who will eventually live in these properties.

CHIF Round 1

CHIF Round One closed in April 2021 and allocated $23.1 million to seven providers to deliver eleven projects valued at approximately $60 million around the state.  Their combined offering of approximately 171 dwellings comprises 108 social housing and 63 other housing types (e.g. affordable to rent, affordable to buy and transitional housing).

The CHPs offered $37.1 million of equity, debt, land and other contributions to the projects. This represents about a 62% co-contribution.

The CHIF Round 2 tender is planned to open in January-February 2023 to allocate the remaining $27 million.

CHIF Stimulus- Social Housing economic recovery package

On 16 October 2021 it was announced that $50 million would be allocated to CHIF for fourteen approved projects that will deliver more than 270 social and affordable housing properties valued at approximately $116 million.  This investment to bolster housing supply is part of the NSW Government’s COVID-19 economic recovery strategy.

CHPs offered $66 million of equity, debt, land and other contributions to the projects. The locations include Caringbah, Glebe, Goulburn, Lismore, Granville, Greenacre, Liverpool, Morisset, Narromine, Port Kembla, Rouse Hill, Wollongong, Woy Woy and Wyee.

CHIF Stimulus - DFV (Domestic and Family Violence) economic recovery package

On 19 October 2021 a Domestic and Family Violence (DFV) funding package of $484.3 million was announced. Included in the package is more than $50 million to develop or acquire up to 200 dwellings for women escaping domestic and family violence. These dwellings will be delivered under the CHIF.

CHIF DFV projects are being sourced from some previously approved but unfunded projects in the CHIF tender with remaining funds to be tendered in 2023. CHIF DFV will provide long-term housing solutions for women who are escaping domestic and family violence.

(This page will be updated as public announcements are made.)

CHIF Round 1

CHIF Stimulus - Social Housing economic recovery package

CHIF Stimulus - DFV (Domestic and Family Violence) economic recovery package

Announcements pending

The Community Housing Innovation Fund is part of a larger social housing reform for the NSW Government. The NSW Government reform agenda is seeking to deliver better outcomes for vulnerable people and to form ongoing partnerships with Non-Government Organisations and the private sector to deliver those outcomes.  Access to stable, secure housing is a fundamental starting point for vulnerable people to help them stabilise their lives and improve their circumstances.

• Breaking the cycle of disadvantage is a policy priority for the NSW Premier.
• ‘Future Directions for Social Housing in NSW’, released in January 2016, sets out the NSW Government’s vision for the Social Housing system over the next ten years.

The CHIF supports the Premier’s Priorities and Future Directions’ goal of delivering on the NSW Government commitment to create a more responsive Social Housing system. It has been designed to help deliver Future Directions’ vision by increasing resources available for the social housing services by making funds available to smaller CHPs, and those in regional locations, to be able to innovate and provide additional social housing.

The CHIF is contributing to the ‘Reducing Homelessness’ priority.

The Community Housing Innovation Fund (CHIF) is open to all registered CHPs (including those that are eligible to register) and aims to encourage regional and smaller providers, who may not have had the opportunity or capacity to participate in large-scale tenders, to activate their financial and other resources to initiate projects.

The objectives of the CHIF are to:

• Increase the supply of housing by leveraging Government funds with CHPs’ access to a range of financial and non-financial resources.
• Encourage innovative tenancy and property proposals that enhance tenants’ social housing outcomes using the range of partnerships that CHPs have in their communities.
• Ensure community housing sector diversity by encouraging regional and smaller scale CHPs to participate in the program.
• Secure the longer-term viability of the community housing sector by increasing the size and value of the CHP owned portfolio.

The following principles apply to the implementation of the CHIF:

• A CHIF grant must be used for the social housing proportion of a project. CHP funds can be used for additional social and/or affordable housing to enhance the project’s financial viability as well as supported integrated communities.
• CHPs are required to contribute financial resources (equity, debt, land) and may also commit non-financial resources (the value of concessions and donations available to charities) to the project.
• Partnerships are encouraged between CHPs and others (i.e. developers, councils, support services, etc.) especially where they improve tenancy management, boost property viability and amenity, and strengthen tenants’ social outcomes. CHPs are expected to ensure that their partnerships have a sound commercial and service delivery basis.
• The CHP will own the property and be responsible for all expenses. DCJ will register an Interest on title with any future dealings to be agreed by DCJ.
• The size of the grant is not fixed, however, the CHIF intends to increase housing supply while also encouraging the participation of smaller and regional CHP. A minimum grant amount of $500,000 and a maximum amount of $5 million has been set.

An injection of upfront capital funding is the most effective way to create social housing supply. Despite availability of cheap credit through commercial lenders and the Commonwealth’s National Housing Finance and Investment Corporation (NHFIC), upfront grant funding is still required to make social housing projects viable. Research conducted by AHURI on funding models concluded that upfront capital funding delivered the lowest cost to government over the long term. Modelling of investment scenarios demonstrates that capital grants combined with efficient financing is the most cost effective pathway for government. https://www.ahuri.edu.au/research/final-reports/306

The CHIF was designed on the premise that initiatives such as Future Directions were of a scale that attracted mainly larger CHPs. There are many smaller and regional CHP who have accumulated surpluses, land or capacity to borrow that can be unlocked by this program.

Government investment for the property’s use as social housing is safe guarded in perpetuity through placing an interest on title in the name of the Secretary of DCJ.  This allows CHPs to recycle assets with the social housing proportion and value going forward to the next project.

DCJ contracted the Community Housing Industry Association (CHIA NSW) to consult the community housing sector and others about the foundation principle and operating objectives of the CHIF.  This informed a co-design workshop was held on 15 February 2019 where the government’s strategic intent and expectations and asked participants to help in designing the broad outline of the Community Housing Innovation Fund (CHIF) program.  .

Participants included CHP’s, local councils, specialist homelessness services, property developers and other interested parties. Speakers from the City Futures Research Centre - UNSW, City of Shoalhaven Council, the Greater Sydney Commission and the National Housing Finance Investment Corporation provided information and discussed financial, local zoning, procurement and other strategies that could facilitate the implementation of the CHIF.

A significant amount of the feedback from the co-design workshop was incorporated into the CHIF procurement process.  Key elements adopted included:

• Scalable tenders with a minimum bid of $500,000 and a maximum bid of $5 million to enable small and large CHPs to tender
• That, due to the long lead times for developments, proponents could commence project planning several years in advance.
• A simple low cost tendering process using fixed word limits, summary tables and reasonable submission timeframes (5 weeks)
• Use of other’s information, e.g. the Registrar of Community Housing, to support assessments and provide assurance that proponents are financially viable, have sound governance arrangements, and meet the service outcomes for tenancy management, property management and community engagement.
• That tenders are repeatable and transferrable for others to use.  DCJ can share the approach with others, for example local councils, to minimise their costs and expedite their procurement of affordable housing projects with CHPs.