How the NDIS will create a new property market

The National Disability Insurance Scheme has allocated $700 million a year to specialist housing, creating a new market for accessible and affordable homes, says the Summer Foundation’s CEO Dr Di Winkler.

“The disability accommodation market in Australia is fragmented and underfunded, and provides consumers with limited choice. But the NDIS is creating a new market – and one that will deliver a return on investment,” Winkler says.

A trained occupational therapist, Winkler has worked with people with severe brain injury for more than two decades. Frustrated by the lack of support and housing for young people, who often ended up in the aged care system, Winkler established the Summer Foundation in 2006 to change policy and drive change.

“More than 6,200 Australians under 65 enter the aged care system every year, usually because they have acquired a disability as an adult, or because they have a deteriorating neurological condition,” she explains.

In July 2016, the NDIS introduced a new funding stream for 28,000 Australians under the age of 65 with very high disability support needs.

These people, who represent around six per cent of all NDIS participants, are eligible to access annual funding from the Specialist Disability Accommodation program to pay for the cost of their housing. They also receive separate funding for support so they can live independently in the community.

“Payments are designed to cover all costs incurred, as well as to provide a market return on the financial investment,” Winkler says, adding that the pricing framework is expected to be in place for 20 years, after which time the property will revert to the general market.

Large retail banks and superannuation funds are currently reviewing SDA transactions, and large-scale developers are “actively looking” at potential sites, Winkler says.

Earlier this year, the Summer Foundation launched a not-for-profit sister organisation, Summer Housing, to replicate and scale housing projects. Led by Grocon’s former head of development Dan McLennan, Summer Housing is exploring a range of models, including lease arrangements and providing design expertise. The build-to-rent model could also “fit in nicely” with the NDIS roll out.

Grocon has partnered with Summer Housing to deliver housing for people with disability in its Greenwich Fairfield project in Melbourne. The 77-unit development includes 10 apartments designed for people with disability, each of which will achieve Platinum certification from Livable Housing Australia.

“We are not talking about institutional style, highly-specialist housing. We are talking about universally-designed housing that works for people who use wheelchairs, but which is also an asset that can be sold on the open market,” Winkler explains.

But the market needs to reach scale quickly.

“Around $2.5 billion in new investment is needed to build housing just for young people in aged care. An additional $9 billion is needed to build and redevelop housing for other NDIS participants who will get this payment,” Winkler explains.

The Summer Foundation and PwC have recently developed a paper, NDIS Specialist Disability Accommodation: Pathway to a mature market, which outlines the market players and the opportunities for each.

Winkler says the main “sticking point” is the lack of market certainty.

“We can get developers across the line, but we also need financial institutions to invest. And they need certainty that the payments will continue.”

Winkler has met with representatives from the federal government, including Treasurer Scott Morrison and Minister for Social Services Christian Porter, and is confident that the “policy and payments are nearly right, we just need to give providers and financial institutions more certainty around longevity of payments,” she says.

“Over the next few years, we’ll be working with Australia’s largest developers, but we want to bring the whole industry along.

“If you are not building to meet the needs of people with disability, then there is a segment of the market that you will miss.”

“In this market-based system, people with disability will have genuine choice over where they live, who they live with and how they are supported. In other words, people with disability will have the same housing choices as every Australian.”