In an Australian first, Adelaide City Council has created an exciting new program designed to make renting in the City more affordable for young workers. Council recently endorsed a Rental Housing Program. This involves Council purchasing apartments from private developers and then on renting them at a 25 per cent discounted rate.
City workers, like young shop assistants or junior office workers in the $20,000 to $30,000 a year income bracket, are currently missing out in existing public housing programs. It is clear there is a demand for affordable City living. However, with developers claiming it is increasingly difficult to deliver quality apartments below $300,000 and rents of around $260 a week, it is extremely hard, if not impossible, for young City workers to find accommodation in the CBD.
In recognising this problem, Council has developed this innovative new program which it believes will not only provide a viable and affordable housing option, but will also stimulate new growth in rental housing in the City. Council has received Registration of Interest (ROI) from the private sector to develop up to 20 two bedroom rental apartments with a car park.
The apartments would be managed through a professional third party housing manager or real estate agency and will be progressively sold off one per year. The program is based on a model developed by the Affordable Housing National Research Consortium. This model is viewed as the most sustainable in terms of the level of capital/equity per tenant year outcomes and also accesses funding external from the existing social housing sector.
It is expected that such housing can be provided in Adelaide to the targeted rental sector at 75 per cent of market rental value. Currently the market rent for such an apartment in the City is around $260 a week so a rent of around $195 a week would be proposed.
This is affordable on a shared basis and thus the scheme offers a significant solution to housing affordability issues being faced across Australia. It will also help promote social mix and non discriminatory access to housing in the City.
It will establish private sector partnerships and facilitate housing development which would not be undertaken by the private sector alone.
