Australia's community housing sector is on the cusp of expansion with the launch of the country's first-ever reporting standard. The standard measures sustainability performance, offering opportunities and valuable insights for investors and a promising future for those in need of affordable housing.
A new environmental, social and governance (ESG) standard developed by SGS for Community Housing Industry Association (CHIA) provides a framework for Community Housing Providers (CHPs) to clearly report sustainability factors, helping providers to articulate their broad value and attract private sector investment to expand housing for people on low and modest incomes.
Launched by the Housing Minister, the Hon. Julie Collins, the standard is only the second developed in the world after the UK.
The standard aims to give investors ESG information that can be used to evaluate sustainability risks and opportunities in any asset class. The hope is that this will encourage more private investment in social and affordable housing, which is sorely needed in Australia.
The launch of the new standard comes at a critical time for Australia's housing sector. According to a recent paper by SGS, without investment, the country's unmet housing need will cost the nation $25 billion annually by 2051 due to health, productivity and crime costs borne by the community.
The community housing sector is well into its transition from cottage industry to a major player in the Australian housing system. It’s not unrealistic to imagine that within three decades up to one in seven Australians will be living in community housing.
Australia's population grew more than 28 per cent between 2006 and 2021, yet the stock of social housing dwellings increased by only 7.7 per cent over the same period. Social housing comprised just four per cent of all dwellings in 2021, compared with six per cent in 1996.
The ESG standard is seen as a key tool for attracting private investment into the community housing sector. Currently, lending to community housing organisations in Australia is mostly provided through the Commonwealth’s National Housing Finance and Investment Corporation with relatively little direct institutional investment. In contrast, private investment in social and affordable housing in the UK is three times that of government grant funding.
The standard will provide the ESG performance information investors can consider and they look to invest in the supply of social and affordable housing in Australia.
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