Social Impact Fund for Affordable Housing Launches

Social Enterprise Finance Australia and the Lord Mayor’s Charitable Foundation have joined forces to establish a new social impact fund to help address the homelessness and growing affordable housing crisis in Victoria.

Under the scheme the Lord Mayor’s Fund will invest $3 million in Social Enterprise Finance Australia (SEFA), which will be disbursed to selected affordable housing development projects throughout Victoria.

The announcement comes as a report from the Tenants Union of Victoria found that there were virtually no affordable rental properties available in Melbourne for people living on low incomes.

The TUV report, Pushed to the Edge, took a snapshot of all advertised rental properties on June 23, 2015 and sorted them according to affordability and appropriateness for different types of low income households.

The report found that the only affordable properties available to a renter on Austudy or Newstart in all of Melbourne were three CBD car parks and a storage shed in Seaford.

“These findings are the latest confirmation of the extent of our extreme housing crisis,” CEO of the Victorian Council of Social Service, Emma King, said.

“Rental cost rises have followed home price increases, making affordable rental properties increasingly scarce for low-income Victorians, and increasing the number of families and individuals living in rental stress.”

Last figures show that homelessness in Australia has increased by 8 per cent in the past five years, with almost 105,250 people living without safe and secure housing. According to the 2011 census, 60 per cent of them were under the age of 35, and 16 per cent were less than 12 years old.

The new social impact fund will concentrate on affordable housing developments in Victoria. The Lord Mayor’s Charitable Foundation (LMCF) and SEFA said they will select applications that demonstrate a genuine added value for both the state’s homeless and local communities.

“SEFA, like LMCF, strives to achieve positive sustainable social impact” CEO of SEFA, Ben Gales, said.

“We are excited to be collaborating with LMCF, a mission aligned partner, to bring a new innovative approach to create affordable housing solutions and help address one Victoria’s biggest social challenges.”

CEO of LMCF, Catherine Brown, said it “makes sense” for a foundation to begin to align its investment strategy with its mission.

“Through the Affordable Housing Loan Fund we want to maximise our impact on increasing the supply of affordable housing in Australia. This is one of the leading causes of homelessness. We look forward to innovative projects coming forward and other impact investors joining us in this work with SEFA,” Brown said.

Australia's inaugural Rental Affordability Index by Community Sector Banking, released Tuesday, also found that low income households are in a dire situation needing to pay around 65 per cent of their income on rent.

The Index shows that single income households are the worst off and low and moderate income families are being locked out of inner cities.

Community Sector Banking partnered with National Shelter and SGS Economics & Planning to develop the Rental Affordability Index.

To download the full Rental Affordability Index, click here.