Building an extra 250,000 new affordable rental homes will create 46,000 jobs a year and save governments billions of dollars, new research shows.
The McKell Institute’s modelling of Labor’s proposed national rental affordability scheme has backed it to save the federal budget up to $11 billion over the next 10 years.
It also predicts the policy will create $40 billion worth of economic activity and create 46,000 jobs every year for a decade.
The McKell Institute and Pricewaterhousecoopers found for every person who moves from crisis care into the new affordable homes, the government will save $11,935 in 2019 terms, every single year.
“Government doesn’t have to choose between doing the right thing and doing the economically responsible thing – it’s the same thing,” McKell Institute executive director Marianna O’Gorman said on Thursday.
Labor has promised to spend $102 million over the next three years and $6.6 billion over the next 10 years to support the creation of 250,000 new affordable homes.
“This small investment in affordable housing not only has significant social but also economic benefits,” the report found.
In return for investors setting rents for eligible tenants at least 20 per cent below market rates, the scheme will provide an annual incentive of $8500 over 15 years.
Dwellings must also be owned or managed by a registered community housing provider.
The Productivity Commission revealed in February that a record 599,049 low income households are experiencing rental stress, with single mothers and their children most at risk.
A previous scheme to encourage affordable housing was shut down by Tony Abbott in 2014.
“Only a Shorten Labor government will address the profound shortage of affordable housing,” shadow treasurer Chris Bowen said.
He said Labor would make housing more affordable by reforming negative gearing to support new housing construction, and revamping the Build-To-Rent scheme to give investors better tax concessions.