Australia is ready to benefit from social impact investing into housing and homelessness, says a new report released today by the Australian Housing and Urban Research Institute, but cautions that success is dependent on multiple factors, including the crucial role of government.
The AHURI report “Inquiry into social impact investment for housing and homelessness outcomes”, led by the Centre for Social Impact at UNSW Sydney, found that social impact investing (SII), when implemented in the right conditions, has the potential to address housing and homelessness in Australia. This final Inquiry report draws on three sub-reports into the topic:
Inquiry lead, and CEO of the Centre for Social Impact, Professor Kristy Muir said that the potential of SII is significant. “We have seen that social impact investing has the opportunity to increase capital for the supply of affordable housing, and fit-for-purpose social housing in Australia. This is really exciting and could be a game changer in helping to address our housing crisis.”
However, she cautions that there are a number of conditions key to the success of social impact investing. “It’s critically important that government plays the right role, as market builder, steward, and participant in the social impact investment market. In addition, we need effective infrastructure in place to support the process.”
Muir continued, “On top of this, and most importantly, we need effective and robust impact measurement to understand the social and financial outcomes. We welcome the news from the recent budget that the Government will provide $6.7 million for building capacity in impact measurement, including through the development of an impact framework aligning with the ‘Australian Government principles for social impact investing’. This is a significant step forward.”
The report revealed a number of promising SII instruments and models that could be viable options in contributing to Australian housing and homelessness outcomes. These include housing supply bonds, property funds, funding social enterprises, social impact bonds, and social impact loans. The report finds that most effective models to date have used a mix of capital from different sources.
The report also explores the challenges and barriers in using SII, and highlights the risks of the potential negative impact on Australia’s vulnerable beneficiaries if the SII market fails.
However, Muir says, we can’t afford not to try. “We know the facts around housing and homelessness. 194,600 people are on social housing waiting lists in Australia, and around one in 200 people are homeless on any given night. A huge portion of the population is in housing stress. We know that new solutions with the right financial resources are required. What this report shows us is that SII has the potential to be one such solution.”
The research report is available to download from the AHURI website at:
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