Social and Affordable Housing Program

This study aims to connect socially responsible impact investors with the affordable housing industry in Australia to address the lack of private investments in affordable housing. By examining emerging innovative finance models and their potential for funding sustainable and global issues, the study highlights an opportunity for the affordable housing sector.

The focus is on socially responsible impact investors who consider the environmental, social, and governance (ESG) performance of their investments. The research evaluates the risks and returns of affordable housing as a financial asset from the perspective of socially responsible investors. The study collects and analyzes data from the Greater Brisbane region in Australia from 2010 to 2019 to assess the profitability of affordable housing investments.

The findings demonstrate that affordable housing assets offer downside protection and generate an annualized return of 6.7%. The study also identifies industry-specific risk factors that affect affordable housing returns in Brisbane. By highlighting the profitability and safety of affordable housing as a social impact investment, the research aims to enable the affordable housing sector to access lower-cost funding and increase the supply of affordable housing. Additionally, the study explores the optimization of responsible investors' portfolios by including affordable housing assets.

This thesis examines the issue of housing affordability in the rental sector in Australia, introducing the whole-of-life approach (WOLA) to analyze affordability throughout the family life cycle. The study identifies household segments experiencing severe affordability stress and evaluates the effectiveness of the National Rental Affordability Scheme (NRAS).

Findings reveal non-uniform affordability stress, particularly for single parents, solitary survivors, and couples with older children. The study highlights the need for targeted housing assistance policies and emphasizes the extensive affordability burden in Australia. Additionally, the research identifies variables driving the demand for private rental housing, including age, household size, income, and global shocks. It suggests that build-to-rent projects can address the needs of low- and moderate-income households and young adults.

However, the financial viability of build-to-rent is contingent on equity capital and substantial government support to generate affordable housing outcomes. This thesis brings together literature on housing affordability, econometrics, and finance, providing empirical evidence of rental housing affordability challenges and the limitations of the build-to-rent strategy in addressing them.

This research examines the use of public-private partnerships (PPPs) in Australia as a state government-led innovation for affordable housing delivery. With reduced federal funding, state governments have turned to PPPs to increase the supply of social and affordable housing. The study analyzes the risks and returns associated with affordable housing delivery and investment under a PPP model. The findings aim to provide guidance for collaboration between the public sector, community housing sector, and private financing sector in affordable housing projects. Government agencies can gain insights into risk assessment and the public sector comparator, while community housing providers can understand the government's concerns regarding PPPs, such as the trade-off between quality and cost.

Financiers can benefit from understanding risk-adjusted net present value calculations and optimal financial structures with government involvement.

Overall, this research contributes to knowledge on affordable housing delivery through PPPs, offering insights from multiple perspectives and providing guidance for public-private negotiations. It addresses housing affordability challenges in Australia and contributes to the literature on PPPs and affordable housing by examining risk analysis, performance evaluation of community housing providers, financial structures, and negotiation processes.

This research project aims to address the complexities of the Australian housing market and provide solutions to the affordable housing crisis using artificial intelligence (AI) and machine learning (ML). The thesis consists of four studies. The first study introduces a new ML algorithm, the Multivariate Mutual Information method (MMI), to identify the factors influencing housing choices, considering the interdependencies and complexities of the problem. The second study focuses on understanding land values and the driving forces behind them, particularly for low-cost lands suitable for affordable housing projects, utilizing a neural network for accurate and efficient analysis. The third and fourth studies aim to develop ML or AI algorithms to predict future market demand and prices for the Australian housing market, with a granular level of analysis based on house types or geographical areas, improving upon existing predictive models. The research project seeks to provide valuable insights and practical solutions to decision-makers in the Australian housing market, addressing the affordability crisis and improving market understanding through the application of AI and ML techniques.

This thesis examines the issue of rising energy, water, and gas costs in low- and middle-income rental households in Australia, which face split-incentive problems in implementing green building principles. The research explores policy options for integrating green building principles into future affordable rental housing in Australia, proposing a revision to the Affordable Housing Bond Aggregator (AHBA) model. The revised model incentivizes operational utility efficiency measures through low-cost development loans derived from green bond issuances.

The thesis comprises three studies. The first study investigates the financial value of green building principles in South East Queensland, showing that operational utility efficiencies achieved through green building practices can reduce housing costs for low-income households. The second study conducts a literature review on the existence of a green premium in the green bond market, confirming its presence in a majority of studies. The third study develops an operational system dynamics model to assess regional outcomes of implementing the revised AHBA model.

It finds that while the green building framework may result in slightly less housing supply, it offers long-term energy and water efficiency benefits, improved affordability for tenants, deferred infrastructure benefits, and contributes to carbon emission reduction targets. Policy recommendations suggest providing green building grants to developers to mitigate the reduction in affordable housing supply. Overall, this research highlights the potential economic, environmental, and social benefits of incorporating green building principles into Australian affordable housing policy.