A way ahead for affordable housing?December 2015

Michael LennonManaging Director

• Backdrop of long-run changes in the structure and dynamics of Australia’s housing system

• Outline some potential solutions/interventions

• Suggest new/emerging roles for the nfp sector

Purpose

• Housing as part of national and State/Provincial policy

• Innovation – post commodities boom

• Productivity – the opportunity cost of displaced expenditure

• Welfare reform, contestability

• Labour market efficiency

The Road Ahead: Policy

• Using our leverage capability

• Engaging with financial markets:

– Rating

– Long-term debt

• Utilising under-capitilised assets

• Re-cycling capital

• Laying off risks

The Road Ahead: Capital Raising and Risk

• no development margin• no company tax• no stamp duties • no GST• philanthropy• municipal relationships• government transfers …… whatever gets the financial model to work.

The Road Ahead: Playing to our strengths

Target Product

• Homeless/risk of Social rental • Disability/mental health Social rental

Shared equity

• Affordable Sub-market rental

• Key workers private rental/portfolio management

• Vulnerable ageing life long lease?/DMF

The Road Ahead: Keeping to our Mission

Market SalesShared Supported Accommodation

Private Rental Social Rental Shared Equity

The Road Ahead: Creating Supply/Recycling

HCA as developer

HCA as broker

HCA as manager

HCA as owner

HCA as funder

• 3500 properties • $500m + net equity• $7-8m p/a free cash• 7 offices• 100 + staff• Operating in 4 States• Poised for growth

Housing Choices Australia – 2008….today

The Merchant, Docklands

Drill Hall, Melbourne CBD

The Mariner, Docklands

Forty two one bedroom & Forty three two bedroom apartments Completion Date: June, 2011

Marshalltown Rd, Geelong

Four independent living units and three shared units with 24 hour care . Completion Date: December 2013

• Historical legacies • Merging • Fiscal stimulus • Transferred assets• Blended funding

HCA to date: driven by:

• ever-escalating ambition if we are to make a material difference • 3 mergers to date + Group Structure • organisation with critical leadership governance capabilities • flexible, nimble, open to possibilities

HCA: Key Steps in the journey

• Canada and Australia – Federalism– Economies– Housing Challenge

• Affordable Housing– No silver bullet

• Non-Profit Housing – potential?– commitment?– capability?

Conclusion

Contact details:Email: michael.lennon@hcau.org.au Website: www.housingchoices.org.au

Michael Lennon