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THOUGHT LEADERSHIP | Beyond Funding

21st May, 2024

A critical analysis of the role and relationship dynamic between government, community housing providers, developers and investors in delivering social and affordable housing.

Delivering social and affordable housing in Australia is a complex and multifaceted challenge, that requires the collaboration and coordination of multiple stakeholder groups, each with their own drivers, interests, and capabilities.

With State and Federal Government’s committing billions of dollars towards solving the housing challenge, how can we better leverage the strengths and capabilities of the four main stakeholder groups; government, Community Housing Providers (CHPs), developers, and investors, to deliver meaningful impact at scale.

Figure 1: Four main stakeholder groups


  • CHPs have a pivotal role to play in the delivery of social and affordable housing, as they can generally deliver housing solutions targeting the community’s most vulnerable cohorts at a lower cost compared to government and developers. The role of Aboriginal Community Controlled CHPs is even more essential when it comes to delivering culturally appropriate housing solutions for Indigenous Australians and culturally and linguistically diverse communities.
  • However, the ability of CHPs to take on and manage development risk and secure finance for large scale or complex developments, particularly in a metropolitan context, is more limited. For these situations, it will be important to use approaches that leverage the joint talent and capacity of experienced developers and CHPs.
  • The capability of each stakeholder group to manage risk, deliver overall value for money, and achieve lasting social impact will vary across remote, regional, and metro areas. This needs to be taken in account when selecting the most appropriate delivery model for the delivery of social and affordable housing. 
  • Government can better enable the CHP sector by providing a more secure and predictable forward funding pipeline to enable CHPs and/or developers to acquire land and plan projects more confidently.


As highlighted in the Australian Government’s State of the Housing System 2024 Report, the issue of housing affordability is worsening and is “widespread, occurring across states and territories, cities and regions, income levels, age groups and tenure types.” 

The report states that, worsening affordability is particularly problematic for vulnerable groups, including low-income households, single parents, young people, single pensioners, those fleeing domestic or family violence, people with disability, and First Nations Australians. Declining rental affordability correlates with an increase in homelessness [1].

It is well understood that the housing system's inability to supply sufficient housing that meets the population's needs is the primary reason for worsening affordability. Current market supply of new housing is low, with only 172,000 dwellings completed in 2023. The supply of new housing is constrained by several factors, such as rising construction costs, higher interest rates, low productivity, limited land availability, complex zoning and planning approval requirements, and market frictions.

One of the policy responses that has gained momentum in recent years is the use of government funding to leverage private and philanthropic capital to deliver social and affordable housing. This approach recognises that the scale of the problem is too large for the public sector alone to solve, and that there is a need to mobilise alternative sources of finance and expertise to increase the supply and quality of housing for low to moderate income households. The Housing Australia Future Fund (HAFF) is the latest example of this approach, following the footsteps of the National Housing Finance and Investment Corporation (NHFIC), which was established in 2018 to provide low-cost, long-term loans to registered CHPs.

State government examples of this approach include:

  • the Victorian Government’s Affordable Housing Partnership Program (AHPP), which is part of their $5.3 billion Big Housing Build and $1 billion Regional Housing Fund
  • the ACT Government’s $60million Affordable Housing Fund; and
  • the $4 billion joint investment by the Australian and Northern Territory Government to deliver housing in remote NT communities, which includes a commitment of $1 million to Aboriginal Housing NT over two years, to support development of a Community-Controlled Housing Model.

What these funding programs all have in common, is that they rely on a consortium of government, CHPs and developers, to deliver housing through a wide range of different delivery models, each with different implications for achieving policy outcomes, value for money, and social impact.

In this article, we will examine the drivers, challenges, and opportunities of the four main stakeholder groups involved in the delivery of social and affordable housing: government, CHPs, developers, and investors.


According to a report by the Australian Housing and Urban Research Institute (AHURI), CHPs have been found to deliver social housing at a lower cost compared to government providers. This is attributed to CHPs' ability to leverage additional funding sources, including philanthropic contributions and private finance, which government agencies typically cannot access [2].

Research by the University of New South Wales (UNSW) also found that CHPs often provide higher quality housing and are more innovative in their approaches to tenant services and property management [3]. The Productivity Commission also reported that CHPs are more likely to maintain and invest in their housing stock over the long-term leading to better housing outcomes and long-term cost savings [4].

However, often reliant on government funding rounds to help with development feasibility, CHPs face the challenge of securing adequate and predictable funding sources that match their housing objectives and delivery models.

Government funding can also change depending on political appetite and priorities and without a steady stream of funding, it is difficult for many CHPs to scale up as the forward funding is unknown and changes state by state.

Without a secure funding pipeline to support development, CHPs are often forced to secure land or properties through option deeds with developer’s, based on what’s available in the market at the time. This can result in higher project costs, lower design quality, and less alignment with housing need.

As with HAFF, CHPs seeking funding through these government schemes generally need to carry upfront project development costs, such as due diligence, design and planning approvals, before they can secure funding, making it more challenging for smaller tier 2 & 3 CHPs to compete as they are less likely to have the project development expertise or the financial capacity to absorb these costs. This can be even more challenging for Aboriginal community controlled housing providers, who by nature are typically smaller, servicing a particular community, and therefore less likely to be able to build capability and capacity over time.

CHPs are also more likely to attract institutional investors seeking long-term income from their assets, but may have trouble securing development finance, where investors are looking for a shorter-term return on investment. This can make it more difficult for CHPs to secure development funding, especially for more complex developments, such as mixed-use or mixed-tenure projects, as they are more likely to be viewed by investors as not having the capability and capacity to manage development risks which can limit their access to competitive finance products and terms.

Unlike CHPs who lack the funding security and ability to hold land, pay upfront costs, or deal with planning risks, developers are more likely to have projects ready to go. While this has the benefit of achieving speed to market there are several market dynamics that are likely to impact the overall value for money of developer led projects for the delivery of social and affordable housing, including:

  • Build-to-sell developments generally prioritise short-term financial returns over long-term asset quality and operating costs;
  • Developer led projects are less likely to be designed as an affordable housing product increasing overall project cost and the inclusion of the developer’s margins can also increases overall project cost;
  • The time lag associated with securing government funding can be lengthy and uncertain, which can increase the risk and cost of the projects for both developers and CHPs.


Another key challenge in administering these funding programs is the difference between remote, regional, and metro markets, which demands a more tailored approach to suit the local context and demand.

Regional and remote markets have different housing needs, challenges, and opportunities than metro markets, and require different solutions and strategies. For example, regional markets have less supply and demand for large-scale developer-led projects, and may attract smaller or local players, who may have different capabilities and interests than larger or national players.

The recent HAFF funding round, which was nationwide, highlighted the need for a tailored approach that distinguishes between regional Australia and major cities. For instance, the need to employ a builder that had certification from the Federal Safety Commissioner’s WHS Accreditation Scheme, which is more typical for civil construction firms and larger contractors in big cities, is unfeasible for smaller contractors in rural areas.

Figure 2: Remote (Kiwirrkurra Community, NT), Regional and Metro Markets


Government, CHPs and developers all have a key role to play in delivering social and affordable housing. However, the capability of each sector to manage, risk and deliver overall value for money and long-term social impact needs to be weighed and balanced when selecting a preferred model to deliver housing.

Government can better leverage the capability and capacity of the CHP and developer sector by providing a more secure and predictable forward funding pipeline and by tailoring its response to suit either a remote, regional or metropolitan context.

ConnellGriffin is leading Australian owned and operated consultancy that specialises exclusively in the infrastructure sector.

We offer pragmatic commercial advice on projects that are centred around the structures and facilities built to assist the operation of society and the cities we live in. Our service incorporates the extensive experience and expertise of our individual advisors and our collective company. We support both private and public sector clients in planning, development, delivery and operation of infrastructure projects.

Our Social Infrastructure Team has deep experience working across government, private and not-for-profit sectors. Most recently the team has been working closely with a number of CHPs on a range of State and Federal funding submissions to deliver more social and affordable housing.

Meet the team:

Click on the profiles above to contact our Team!


[1] State of the Housing System 2024, National Housing Supply and Affordability Council

[2] The role and potential of private housing providers in social housing provision, Hal Pawson, Vivienne Milligan, Judith Yates, Australian Housing and Urban Research Institute

[3] University of New South Wales (UNSW), City Futures Research Centre

[4] Introducing Competition and Informed User Choice into Human Services: Reforms to Human Services, Australian Productivity Commission



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