Stimulating New Housing Options
The recently released housing pricing framework for NDIS participants is being introduced in the hope that it will stimulate market responses whereby there will be more housing stock produced and available for rent or purchase, that is both appropriately designed for people with various forms of disability and also offered at affordable rates.
As widely predicted, the pricing framework is initially being limited to those with the most significant levels of disability requiring specialised housing that is not currently provided in the market place. This is indeed a logical place to concentrate efforts as under current market conditions there are very limited incentives for housing developers or investors in residential housing to construct specialised or customised buildings due to the additional cost factors and the relatively small and dispersed market.
The pricing framework announced by NDIS appears at first blush to provide adequate funding incentives to meet the additional capital costs of building specially designed properties but it is highly unlikely there will be an adequate market response without a lot more ‘market stimulation’ by the NDIA or other organisations championing the NDIS.
Engaging Demand and Supply
The most obvious shortcoming is the lack of information on the actual market needs. The NDIS has identified an aggregated estimate that there are approximately 12,000 people who would be eligible for housing packages who are currently residing in aged care facilities or other inappropriate accommodation. This has been further broken into estimates for each state, but for housing developers to even start the work necessary to decide whether projects are viable and financially feasible this ‘demand’, needs to be broken down to actual number of participants by location, amenity requirements and their preferred residential locations. Realistically before any prospective developers or investors become involved they will need to be able to identify future residents, understand their housing funding entitlements and also their particular design and amenity needs. This is far too costly and risky venture for any well managed organisation to embark on without direct early engagement with potential residents.
The NDIA has been active in promoting innovative and different accommodation models that will improve the lifestyles of people living with disabilities and moving further away from previous institutional or the ‘efficiency driven’ standard group house model of accommodation. But realistically it will need to give more support and assistance to developers if the potential for new and different models of residential housing is going to be realised. This support does not necessarily translate into financial grants or additional financial incentives but could be facilitating proactive engagement between participants, consumer advocates and housing developers to identify models and ways to constrain capital costs, and reduce risk for the developers.
The Role of Community Housing
Given the limited size of the market and the specialised nature of the accommodation required it is unlikely that commercial developers will become involved in this activity under their standard profit driven business models. Hopefully there will be some exceptions where developers are driven by personal connections or commitment to organisations but by far the most likely developers are not for profit agencies driven by their particular mission statements. These are likely to be existing specialist community housing providers (Housing Associations) or organisations already providing specialist accommodation services in the disability, aged care or rehabilitation sectors.
These agencies have natural advantages in this specialised market, the most obvious being they do not have to generate a profit for their shareholders but need to deliver projects on a break even basis. The dividend is actually delivered as reduced costs (rent) or improved amenity to residents rather than paid as a financial benefit to a shareholder. Another natural advantage is experience, with most already providing accommodation to existing consumers with similar needs and so having the experience and understanding of the business and having knowledgeable staff trained to deliver optimal outcomes. Many of these organisations already have charitable status and can devote the financial benefits of charities to further reduce costs. Potentially many agencies already have ownership or control over assets, land and buildings that they would be committed to allocating for the purpose of extending their portfolios of properties housing those with special needs. This is the obvious sector for the NDIA to be courting.
The NDIA needs to be proactive in engaging with these potential developers to stimulate ideas and to ensure agencies can develop feasible proposals designed for identified segments of the market.
The other ‘elephant’ in the room is the other estimated 400,000 plus NDIS participants who will not be eligible for a specialised housing funding but in all likelihood the vast majority of whom will be on low to very low incomes. Most of these participants will also struggle in the very tight housing market and not reap the independence and potential benefits of the NDIS without a home of their own. It is expected the majority of these participants will also be seeking affordable rental properties through existing not for profit Housing Associations or State Housing Authorities.
It would seem logical that the NDIS would also support the growth of these providers to generate more appropriate options for their participants. It would also be an obvious advantage if the specialised funded housing could be developed as part of and incorporated into other housing developments rather than as stand alone specialised facilities.
Some of the most innovative disability housing developed over recent times has been when customised dwellings have been incorporated into more generic housing or apartment developments. Housing Associations are very keen to explore these possibilities but need forums to engage with NDIS participants, advocacy organisations and support providers to explore possibilities and develop feasible projects.
The immediate next steps for the NDIA following the release of the pricing framework are identifying and releasing data related to those immediately eligible for housing packages. This means locational preferences, numbers of eligible participants and their housing entitlements and their particular housing design and amenity needs. This work cannot be done quickly enough as it is an essential component of any proposal to construct specialised dwellings and standard lead times for new buildings are measured in years rather than months. If the NDIA is to meet it stated target of 500 to 900 dwellings annually to 2020 this information needs to be available now.
The next step is facilitating forums in each region identified as needing additional housing, to enable the direct engagement of participants and their representative bodies, specialist housing developers and support providers to stimulate discussion and promote proposals from agencies. These forums need to identify local need, explain the pricing framework in relation to local needs and promote the development of specific proposals supported by collaborating agencies in the locale. The NDIA needs to make these immediate investments if the sought after market response is going to be a reality rather than a wish.