9 February 2016
Burgeoning demand for low cost community housing provides Australia with an immediate opportunity to improve energy efficiency, lowering tenant costs and lifting the sustainability of Australia’s cities, according to a new report from the Clean Energy Finance Corporation.
The CEFC today released its new Market Report: Financing Energy Efficient Community Housing. The Report identifies strong demand for new Community Housing over the next decade, with more than 200,000 approved applicants on waiting lists for social and affordable housing Australia-wide. This demand will require significant private sector investment, of as much as $15 billion over 10 years at current growth rates.
The Report says new community housing should be built to ambitious energy efficiency standards.
“Evidence indicates that low-income households tend to live in buildings with poorer energy efficiency, leading to higher energy costs. Poor building energy efficiency and high energy costs can have significant financial and health effects on households in community housing,” the CEFC Market Report says.
“There are many energy efficiency improvements with payback periods of five years or less that can be incorporated into the building fabric during construction. New-build community housing should be designed to ambitious energy efficiency standards and the existing stock should be refurbished to improve energy efficiency.
“While energy efficiency improvements involve upfront costs, more energy efficient community housing would lower energy bills and increase thermal comfort, improving households’ financial, health and social outcomes as well as reducing carbon emissions.”
The CEFC today also announced a major new program to help drive the construction of energy efficient community housing in 2016. The CEFC expects its new $250 million Community Housing Program to contribute to the construction of as many as 1,000 new energy efficient dwellings Australia-wide, via Australia’s growing network of Community Housing Providers.
The new program builds on the CEFC’s earlier $60 million long-term senior debt commitment to SGCH to finance the construction of more than 200 new energy efficient homes in Sydney’s south for low-income earners, such as essential service workers, school and hospital staff. The program will also underpin upgrades to a proportion of SGCH’s 4,300 existing older properties with energy efficient technologies.
In its Market Report, the CEFC noted that the role of community housing is expanding, with government policies encouraging the sector to increase the supply of affordable housing.
But while community housing organisations are working in partnership with governments and the private sector to build more affordable housing, community housing organisations have limited sources of revenue to fund new buildings and renewable developments and have generally faced challenges sourcing private finance on appropriate terms.
While some mainstream and community banks have established loans to Community Housing Providers, only larger housing providers have had the capacity to borrow, and they have generally borrowed relatively small amounts compared to their net assets.
As part of its new Investment Mandate, the CEFC has a strong focus on financing emerging and innovative renewable energy technologies, energy efficiency and cities and the built environment.
CEFC CEO Oliver Yates said: “With nearly 90 per cent of mainstream community housing located in major cities and inner regional areas, it is clear that improved energy efficiency in these buildings will have a positive benefit on our cities and the built environment. But there is a funding gap that needs to be addressed to help drive this investment. Long-term debt finance from the CEFC can help community housing organisations deliver new housing developments and ensure those dwellings are built to high standards of energy efficiency.”
Media release, 2016