Develop affordable rental housing
Incentives for developing affordable housing, examples of affordable housing projects and how to partner with community housing providers
Partnering with community housing providers
Organisations such as private developers, councils, church-based groups and co-operatives can partner with community housing providers (CHPs) to develop affordable housing.
Partnerships bring together key components such as land, funding, development expertise and skills. Bringing together these components can result in the delivery of development projects which no single partner could achieve on its own.
CHPs can also manage affordable housing properties on behalf of organisations, individuals and consortiums.
Many private developers and individuals already have successful and ongoing partnerships with CHPs, and CHPs have a proven track record. In the past decade, CHPs have invested over $1.82 billion to deliver 5,300 new homes, with more than 2,600 new homes in the pipeline to be delivered by 2026.
Who are community housing providers?
Community housing providers (CHPs) are non-government organisations which manage and/or own more than 54,000 social and affordable housing properties in NSW, including 34% of the social housing available.
CHPs own, manage and develop their own properties and manage properties on behalf of government, local Councils and private landlords. They are also responsible for the management of affordable housing delivered under the Housing SEPP.
All not-for-profit CHPs provide housing for people on very low, low or moderate incomes or people from a particular cohort or with additional needs. Most community housing providers focus their operations within a particular geographic region.
CHPs are registered
To work with the NSW Government, and to manage affordable housing properties, CHPs must be registered under the National Regulatory System for Community Housing (NRSCH) or the NSW Local Scheme.
There are 200 CHPs registered under the NRSCH and 20 registered under the NSW Local Scheme. Fifty one of these are Aboriginal CHPs. Most registered CHPs are not-for-profit organisations with a small number of for profits (16 as at March 2024).
This registration provides assurance of a viable and diverse sector, that delivers quality outcomes for tenants and in which investors and partners can have confidence.
The Registrar categorises CHPs into three groups or tiers. Tier 1 providers are the largest organisations and in addition to property and tenancy management, usually offer development expertise.
More information about the National Regulatory System for Community Housing can be found here.
Benefits of partnering with CHPs and CHP ownership
The NSW Government has recognised the not-for-profit community housing sector as a key delivery partner in providing affordable housing solutions.
Not-for-profit community housing providers re-invest any profits from affordable housing into the provision of more affordable housing and/or to improve the services they deliver.
NFP CHP ownership strengthens the CHP’s financial position, which enables better servicing of social housing clients and more opportunities to leverage funds for more social and affordable housing development. It also reduces the pressure on social housing (provides exit opportunities) and on private rental market (provides alternative, more affordable options) and enables them to hold properties as affordable in perpetuity.
The value of partnering with CHPs and CHP ownership was confirmed in a 2022 report by the Paxon Group which considered various partnership models for local government when delivering affordable housing. The report found that partnering with CHPs provided value in the delivery, operation, management and maintenance of affordable housing. It also found that this value was enhanced when ownership was transferred over to the CHP, as the CHP was then able to leverage that housing to borrow money and provide more affordable housing outcomes.
The report estimates this value to be around $60,000 per dwelling, as well as the costs avoided by councils for future liabilities associated with maintaining the properties. It also estimates that this partnership approach generates up to 21-27% more affordable housing over the longer term.