US Inspires $1 Million Grant For Community Housing Providers

Australia will look to mimic a successful affordable housing approach from the United States, with the launch of an Affordable Housing Challenge offering a $1 million grant to community housing providers.

The Lord Mayor’s Charitable Foundation (LMCF) launched the Affordable Housing Challenge earlier this month, to help tackle homelessness and increase the supply of affordable housing in Melbourne.

The challenge calls on community housing providers to partner with developers to build affordable housing of up to 50 units for low to moderate income households, available for both singles and families in need.

LMCF developed the challenge with the support of housing and economics expert Dr David Rosen from the United States.

Rosen, who has provided affordable housing policy recommendations to the Obama administration, told Pro Bono News that Melbourne could lead the way on affordable housing in Australia.

“I think the challenge is designed to demonstrate a replicable and scalable approach to sparking partnerships among public and private sector financing sources and funders, to potentially dramatically increase the number of affordable units which could be produced in Victoria and Australia,” Rosen said.

“And I say that because it relies on several key features which together make the challenge serve as a very useful model for the state. It first of all recognises that public jurisdictions such as local government agencies, the state of Victoria and the Commonwealth are landowners and often own land mass over public spaces… that could be contributed to the development of affordable housing.

“And secondly, because the foundation is itself putting up $1 million in grant funds… you are providing two key incentives to community housing associations and to for-profit and not-for-profit developers, to produce housing on the public land.”

Rosen said the challenge could help Australia mimic some of the successes the US has had in the affordable housing space.

“There has been a very long-running commitment by [about] a dozen major foundations in the US, led by the Carter Foundation in Chicago and the Ford Foundation in New York. It dates back to the 1980s and the philanthropic focus was on building the development and financial capacity of non-profit housing developers,” he said.

“And that capacity was focused on several key aspects… like building their balance sheet strengths, building their staff’s professional capacity, building their sophistication to manage complex entitlements… and to do so in a way that would really multiply their ability to go develop housing long term.

“And since that effort began in the mid 1980s in the United States, using the Low-Income Housing Tax Credit program… something like 12,000 projects totalling nearly 800,000 units of very low income housing, have been developed in the US alone.

“That capacity really in large measure stems from funding support not unlike what the Melbourne Lord Mayor’s Charitable Foundation is supporting here.”

Rosen added that it was vital that not-for-profit housing providers worked with the private sector to develop affordable housing.

“The mission and purpose for the existence of not-for-profit community housing associations is to promote, produce and preserve affordable housing. Their charter requires them to honour that commitment, and to reflect that in the permanent affordability of very low income housing projects or assets they develop,” he said.

“But it should be remembered that not for profits are also part of the private sector. In the United States, while about a quarter of the 800,000 [low-income] units were produced by non-profit developers, three quarters was produced by for-profits.

“So clearly this is a business model that works in a limited profit fashion, for both for-profit corporations and not-for-profit corporations.”

Most recent census statistics showed that 24,817 people were homeless in Victoria in 2016, an increase of 11 per cent since 2011.

LMCF’s CEO Catherine Brown said more people would be “forced into homelessness and unstable accommodation” if Victoria’s affordable housing stock was not increased dramatically.

“As the community foundation for Melbourne, we are aware that safe and affordable housing can provide the stability upon which people can build their lives. We are serious about creating new housing solutions to tackle our affordable housing crisis,” Brown said.

Rosen will be arriving in Melbourne this week and Brown said his support was vital to the launch of the LMCF challenge.

“We are looking forward to welcoming Dr Rosen to Melbourne as we begin to move forward with our Affordable Housing Challenge.  Dr Rosen has provided us with wise counsel based on his work with the MacArthur Foundation and many others in the US,” she said.

The successful applicant of the $1 million grant will be announced at the end of June.

“We hope the Affordable Housing Challenge will inspire new ideas that are innovative, energy efficient and can meet the needs of our community. The winning project will also be replicable and scalable, providing learnings for future projects,” Brown said.