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18 November 2020

From Social Distancing to Social Housing – New Development Opportunities

The Victorian State Government recently announced the Big Housing Build, which is touted as being the largest social and affordable housing building program in Victoria’s history. It comprises $5.3b investment in building more than 12,000 dwellings for social housing and is being overseen by the newly created Homes Victoria, which has the role of managing Victoria’s social housing assets.

One component of the rollout comprises Purchase Program – In Progress and Ready to Build Developments. It seeks to facilitate the purchase of dwellings by the Department of Health and Human Services (DHHS) from developers / property owners. These dwellings are to be delivered as value for money ‘turnkey’ properties, with the Social Housing component to be available for occupation no later than the end of 2023.

Social Housing is a critical part of our housing framework which ensures that safe and secure homes can be provided to people who may be experiencing family violence, mental illness, disability, or to those who simply cannot secure a safe, affordable place to call home.

With the onset of the COVID-19 pandemic and the subsequent significant economic impact, there is an increasing need to provide affordable housing opportunities to those experiencing the severe impacts of the pandemic.

This program represents an exciting opportunity for Victoria to boost its underinvested social housing sector, while provide concurrent opportunities for private development to consider the sale of dwellings in priority local government areas. The program is targeting approved or currently under construction developments that are located within the 21 local government areas classified as priority local government areas, as shown on the accompanying graphic. While these are the preferred areas, the program is open to a wider variety of locations including:

  • Regional cities and medium size centres that include Greater Geelong, Ballarat, Bendigo and Shepparton;
  • Major regional town centres that include Wodonga, Bairnsdale, Mildura, Warrnambool, Horsham, Wangaratta and Sale;
  • Inner and middle suburbs within metropolitan Melbourne; and
  • Growth areas of metropolitan Melbourne.

A Request for Proposal (RFP) has been prepared by DHHS to guide respondents, noting that any applications to the program must be submitted in full by 2pm on 17 December 2020.

Following evaluation, the execution of agreements and contracts for successful projects is expected to occur from 1 April 2021.

What are the specific requirements of this program?

Any person who can legally undertake a transaction for a property can become involved in this program. The requirements for dwellings to be considered for purchase under the program include:

  • The dwellings can be a part of residential or mixed-use developments;
  • All dwelling types and sizes are considered (excluding studio apartments);
  • Projects need to be well located in relation to public transport; retail; services and other amenities;
  • Projects are within inner and middle ring regions of metropolitan Melbourne; growth areas; peri urban local government areas such as Mitchell and Moorabool Shire; regional cities and urban centres. More detail is set out in the Request for Proposal document on locations;
  • Dwellings will need to be settled and available for occupation by no later than end of 2023;
  • Projects will need to demonstrate a discount to market value due to wholesale nature of the proposed purchase;
  • The proponent experience and capability to deliver the project within the agreed timelines; and
  • The proposed transaction structure preference is for a 10% deposit and balance on settlement of dwellings.

What information needs to be provided?

The information requirements include:

  • Proposal Form
  • Executive Summary of the proposal (including dwelling particulars and offer price)
  • Details of Proposed Dwellings
  • Planning Approvals
  • Delivery Capability and Capacity
  • Funding Structure
  • Policies (Social Procurement Framework).

The Purchase Program – In Progress and Ready to Build Developments is an exciting opportunity for Victoria to significantly increase its number of social housing dwellings, responding to growing demand. The program enables developers to actively participate in the provision of social housing at a time when the residential housing market is experiencing uncertainty associated with the COVID-19 pandemic.

Should you have any queries regarding the program or any other matters, please get in touch with Jack Lyons and Alice Maloney of our office on (03) 9429 3111, or alternatively you can contact Homes Victoria at tenderenquiries@homes.vic.gov.au.

 

Author: Jack Lyons, Planner

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