Super funds have role to play in fixing housing stress

The scale of need for affordable housing in Australia is so large that involvement from the private sector and super funds is a critical part of the solution, according to the Chief Executive Officer of Brisbane Housing Company (BHC), Rebecca Oelkers.

"We need our super funds to be investing in these kinds of assets here in Australia - they're doing it overseas already. It's excellent that we are now getting the settings right to keep that capital here," she said.

Housing stress is a very real issue in Australia, and stories of families living in their cars or tents are increasingly common. There are currently thousands of families in housing stress in the private market and many thousands more on social housing waiting lists.

The Australian Retirement Trust (ART), through Queensland Government owned investment manager and advisor QIC, will provide financing to assist BHC to deliver up to 1200 social and affordable homes, helping to alleviate some of this stress.

Subject to agreement of terms and finalisation of due diligence and documentation, ART intends to invest up to $150 million in a subordinated debt tranche. The ART financing will be part of an overall capital stack that includes senior debt and funding from the Queensland Government's Housing Investment Fund.

Oelkers welcomed the initiative. "It's the first time that super funds have invested in social and affordable housing here in Queensland, and the scale of this partnership with ART and QIC is an Australian first."

Oelkers said the community housing sector has long been advocating for policy settings such as the Housing Investment Fund, that can make investing in social and affordable housing more attractive to superannuation funds.

"It's such a win-win," she said.

"Community housing providers like BHC build quality affordable housing that is in operation for a substantial term - in this case, 20 years or more. The income stream is reliable, but without some form of subsidy it hasn't previously presented a compelling investment case for super funds."

"With program such as this, super funds are now able to invest in socially responsible assets, whilst still meeting their fiduciary duty to members."

One of the projects that the ART, QIC, and BHC partnership will deliver, supported by the Queensland Government's Housing Investment Fund, is a development of 84 apartments, each offering one bedroom plus multi-purpose room, in a combination of affordable and social housing at Sutton St, Redcliffe. This development will be aimed at seniors, with residents able to move in from 2024.

In similar BHC developmentsOelkers said that over 75 per cent of residents are single older women who simply don't have other options to go to.

Unfortunately, often due to the nature of their many caring roles and having low superannuation balances at retirement, an increasing number of older women are facing poverty and homelessness in their retirement.

"Supported by the Housing Investment Fund, this partnership with ART and QIC for our Redcliffe project will offer older people - especially older women - much needed housing stability, either through social housing or affordable housing options," Oelkers said.