A recent report has underlined a gap in the government’s stewardship of Specialist Disability Accommodation (SDA); a gap that needs to be filled to keep investor confidence buoyant. Thankfully, industry players have taken charge, with several recommendations to pave the future of SDA properties.
Keep reading to find out how you can get on board to become an impact investor who helps change the lives of Australians living with a disability.
What makes Specialist Disability Accommodation an impact investment?
Never before has a market been created that boasts the unique features of the SDA housing market. Within the growing investment options across environmental and social impact areas, Specialist Disability Accommodation is arguably the most significant as it perfectly blends immense and immediate benefits for the disabled community with government-backed returns – presenting an appropriate risk and return investment balance. SDA housing is an unprecedented demonstration of how positive outcomes can be achieved through a market that dovetails with the collaborative efforts of finance and government.
What does ‘Market Stewardship’ mean for SDA housing Australia?
A stewardship role in the Specialist Disability Accommodation (SDA) initiative involves the actions required to define and support the effective functioning of sustainable and enduring markets for participants and providers. The NDIA understands and appreciates its position as a steward in the SDA market.
Why does disability housing require stronger stewardship by the NDIA?
The confidence of investors is absolutely critical to the success and future of SDA. However, recently investor confidence has been rattled by government announcements. Without money from investors, the government will be forced to provide significantly more funding for SDAs, or see people with disability be forced to live in aged-care facilities. People will not invest in SDA unless they have trust in predictable returns and sound risk levels.
In May of 2021, Prime Minister Scott Morrison imposed major sustainability pressures on the National Disability Insurance Agency (NDIA) amongst his pre-budget speeches, proposing some contentious reforms. These reforms have since been halted by the Minister for the National Disability Insurance Scheme (NDIS), Linda Reynolds. However, SDA providers are now losing confidence in the NDIA (National Disability Insurance Agency) to effectively steward the market due to lagging process times, overdue payments and confusing funding eligibility criteria.
Is SDA a safe investment?
While investor confidence may have declined, SDA is still essential in our community. The government are committed to ensuring there are no people with disability under the age of 65 living in aged-care facilities by 2025. If government-funding for SDA is reduced in the future, it doesn’t remove the need for appropriate housing for the thousands of Australians struggling to find a home. As it stands, returns from SDA investments are backed by the Government for 20 years (which is unheard of for other types of investments!). But even if there is no government funding, there is still a huge demand for SDA dwellings. And falling back on basic economic principles, when demand is high, so are returns.
The way forward for SDA investment
In response to the challenges faced by the NDIA, an SDA Think Tank was convened by the Summer Foundation – supported by Impact Investing Australia. The Think Tank provided the opportunity for the most prominent players in the SDA market to inform and support government stewardship of the SDA market.
In collaboration with Linda Reynolds, Fund Managers and other NDIA stakeholders such as SDA participants, two broad areas requiring urgent attention were identified:
- Improving market engagement and signalling
- Optimising the demand and supply pipeline
It’s encouraging to learn that several recommendations were made to spur government stewardship of the SDA housing initiative in the right direction. Some of the recommendations included releasing regular market statements covering SDA supply and demand signals from the NDIA as well as government policy updates, information and market condition forecasts. In addition, the need for better SDA policy transparency was highlighted in addition to agency decision-making and the SDA funding eligibility criteria.
Despite the blatant need for urgent government action to stabilise the SDA market being showcased throughout the Think Tank, fund managers showed enthusiastic optimism at the fantastic potential for SDA housing investment to be a true impact investment opportunity.
How to invest in SDA housing
Before taking the first step towards an SDA impact investment, be sure to have an NDIS loan expert on your side. To find out more about how to access twenty years of government-backed returns in a socially focussed investment property, get in touch.
