In 2019, the Constellation Project convened a social lab to identify potential solutions to ‘unlock’ private sector investment in affordable housing projects, resulting in a proof of concept model.
In 2021, the Community Housing Industry Association (CHIA) and Industry Super Australia (ISA) commenced a joint initiative in partnership with the Constellation Project and other housing sector organisations and supporters called the Housing Boost Aggregator (HBA). The purpose of the project was to develop a policy proposal that would facilitate institutional investment, at scale, in a new pipeline of social and affordable housing development.
The HBA is designed to incentivise high-quality, cost-effective affordable housing developments and supplement (not replace) existing funding streams.
The National Housing Finance and Investment Corporation (NHFIC) provides debt financing for social and affordable housing, with Community Housing Organisations (CHOs) typically using their rental income to pay the interest.
Even when combined with other available forms of funding assistance (such as rate and tax rebates, planning concessions and land contributions) these loans are often not enough to fund new social and affordable homes. In short, CHOs are faced with a funding gap that prevents new builds.
Despite the exceptionally low interest rates at the time, this funding gap was consistently presented as a barrier to scaling up the industry to produce affordable rental housing.
The Housing Boost Aggregator (HBA) was a way to close this funding gap through the creation of a new Commonwealth tax-subsidy alongside pooling portfolios of affordable housing projects to attract ongoing institutional investment.
Registered CHOs bid for the Boost to fill their project-specific funding gap through a contestable process designed to encourage high quality, cost-effective schemes.
Boost funding would be awarded through a competitive process – much like a reverse auction
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