More Australians are at risk of facing homelessness following the shocking announcement that 30,000 NRAS dwellings are potentially leaving the affordable housing system.   

The National Rental Affordability Scheme (NRAS) has been sheltering Aussies on low incomes since 2008 with rental properties and subsidised rent of up to 20 per cent below market rate, for a period of up to 10 years.  

According to the latest government figures, more than 6,000 dwellings will be lost under the NRAS in 2023, and a total of 36,000 by 2026 due to the current subsidy underpinning the provision ceasing.  

There is yet to be a new subsidy identified to help save the NRAS dwellings, that if not found will see private investors selling the properties for capital gain or increase the rent in full, which residents are simply unable to afford.  

Further to not finding a new subsidy and the possibility of increased rent, many households will be forced into either homelessness or back on the social and affordable housing waitlist which is already under pressure.  

Treasurer Jim Chalmers mentioned in his Budget Speech that Labor is committed to tackle the housing crisis that is leaving the great Australia dream of home ownership as “out of reach”.  

“Rents are through the roof and many families are struggling to keep up,” he said.  

“Supply hasn’t kept up with demand, which means too many struggle to live close to where they work…and are stuck on waiting lists for social housing.” 

Mr Chalmers announced that the Labor Government with the Housing Australia Future Fund will build 30,000 new social and affordable homes in its five years. 

This initiative, once complete will see a net position of zero as the Government would have covered parts of the loss of the NRAS Dwellings.  

Evolve Housing, a not-for-profit organisation, currently has a total of 782 affordable rental dwellings that are funded as part of the NRAS program – 344 are owned and a further 438 managed on behalf of private investors – are calling for the saving of the NRAS dwellings.  

Evolve Housing continue to operate as many properties as affordable housing with the support of the National Housing Financial Investment Corporation (NHFIC) which help refinance developments to reduce interest costs. 

Evolve Housing monitors the ongoing situation and the risks associated with the loss of the NRAS dwellings on a quarterly basis. 

Evolve Housing anticipate next to no impact to tenants living in its owned NRAS properties due to the reduced interest payment from NHFIC which will almost certainly see the offset of the NRAS subsidy loss and that any gap would be able to be funded from Evolve’s operating budget. 

For properties managed by Evolve and its subsidiary EchoRealty, the availability of managed properties for affordable housing depends on the private market owners’ decisions.  

This means that it will remain unclear on whether these properties will remain as affordable housing.  

Evolve Housing continues to explore various options to help minimise the loss of affordable housing from the already constrained system such as being able to persuade investors to continue the lease of their properties as affordable rentals.  

This can be achieved if Evolve Housing can offer long term leases of between 5-10 years, as well as reducing the subsidy gap through a leasing subsidy (similar to Community Housing Leasing Program) provided by state or federal government.   

It was noted that the NRAS subsidy in the 2021/22 financial year is exorbitant in which investors were given a subsidy of $11,124 in exchange for dwelling for rent at 20% below market rent.  

Evolve found that providing a 20% subsidy to the market rent should only cost between $3,000 to $6,000 a year in most suburbs. This showed the extra subsidy cost then flowed to NRAS property developers and investors.  

This subsidy also did not vary on the size, location, or type of dwelling revealing that a three-bedroom home received the same subsidy as one that is in central Sydney or regional NSW.  

If Evolve Housing’s recommendations are implemented in the Parramatta LGA, there is a potential of a whopping 35% savings compared to the current NRAS subsidy.  

Evolve Housing stresses that they are open and committed to working with state and federal government to explore this and many other possible options to make affordable housing easily accessible to Aussies.  

Further to what Labor announced, Mr Chalmers revealed that the National Housing Infrastructure Facility will support an additional 5,500 new homes. 

Another exciting initiative is the Help to Buy Scheme, which will see 40,000 eligible Aussies own their own home with a lower deposit and smaller mortgage.  

The Regional First Home Buyer Guarantee will support another 10,000 new homeowners each year.  

Mr Chalmers also announced that the government will go a step further after striking a deal with a new national Housing Accord between governments, investors and the industry to build more affordable homes Australia desperately needs to tackle the housing crisis.  

“The ambition of this Accord is big and its bold – an aspiration to build one million new, well-location homes over five years from 2024,” he said.  

He explained that the supply will need to come from the market and not the government, however they are planning on kickstarting the investment because “we know it needs to happen”.  

“To get the Accord started, this Budget commits an initial $350 million in additional funding for another 10,000 new affordable homes, on top of our existing commitments.  

“This will be delivered through an ongoing funding stream to help cover the gap between market rents and subsidised rents making the projects more commercially viable. 

“State and territory government will build on our commitment with up to 10,000 new homes as well – that’s up to 20,000 new affordable homes in total.”