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How the NDIS is using the market to create housing for people with disability

8 Sep 2017

The government and the National Disability Insurance Agency (NDIA), which oversees the NDIS, have done a tremendous job in setting up this new funding stream. The new SDA rules under the NDIS Act took effect in March 2017. We are moving from policy design to implementation.

We now need to make sure that this well-funded and well-designed SDA payment delivers new housing on the ground.

The market is responding, with NDIS housing being built in cities across Australia. Large retail banks and superannuation funds are reviewing SDA transactions. Large developers are including SDA builds in some new developments.

Summer Housing (Summer Foundation’s sister entity) opened ten new SDA apartments in the Hunter Region of New South Wales in mid-2016. Contracts were recently signed for another ten apartments designed for people with disability throughout a 77-apartment development built by Grocon in Fairfield, Melbourne.

Summer Housing aims to build 300 apartments through SDA – meeting the needs of less than 5% of all young people in aged care.

Summer Housing has opened ten new SDA apartments in the Hunter region.

What will it take to meet the need more quickly?

Over the next five years, 16,000 new or refurbished SDA places are needed. Around 650-700 new SDA places were created or commissioned in the past 12 months. Only 250-300 of these are for unmet demand. The remaining 400 are to rebuild existing, outdated government disability housing stock.

The market needs to reach scale more quickly. The NDIA and government need to listen to and actively steward this fledgling market.

The government sector can do three things to accelerate progress toward a mature market:

1.            The federal government can provide certainty to the market about how long these prices are guaranteed for and how any price reviews occur.

2.            The NDIA can provide regular and good-quality information on demand for SDA.

3.            Local and state governments can mandate targets for SDA in major developments.

Beyond these actions, there is the potential to link SDA with the federal government’s commitment to support a strong Social Impact Investing market in Australia. Social impact investments generate measurable social outcomes, while delivering a financial return to the investor.

Robust evaluation and evidence-based decision-making are integral to social impact investing. The NDIS approach will provide solid evidence that well-located housing with accessible design and technology will increase the quality of life and independence of NDIS participants, thereby reducing the NDIS’s lifetime care costs and liability.

The SDA market has the potential to demonstrate how government can leverage large amounts of capital from superannuation to fund other forms of affordable housing.

Laying the foundation for a revolution

For people with the highest levels of disability, the NDIS housing payment will bridge the gap between what people with disability can reasonably afford and the cost of building highly accessible housing.

This policy lays the foundation for developing the range and scale of housing needed to resolve the issue of young people in nursing homes in Australia.

The next step is for government to work with stakeholders in the market — including investors and the housing sector — to create the revolution in housing that Australians with a disability and their families have been waiting for.

 

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