Noel Towell, Ella Fisher June 16, 2012
ACT government affordability schemes meant for battling Canberra families are being exploited by ''savvy'' high-income earners, a housing advocacy group says.
And The Canberra Times can reveal that ACT Treasury has commissioned an independent review of the Land Rent Scheme in the wake of claims that the program is being used, completely legally, by middle-class buyers to acquire houses for themselves and even their children at below market rates.
As the government launched the next phase of its housing affordability strategy yesterday, the Assembly's budget estimates committee was being told of serious concerns about the four-year-old Land Rent Scheme that allows buyers to purchase property while renting the land.
Since the scheme began on July 1, 2008, land rent deals have been exchanged or settled on more than 1200 blocks housing blocks around the territory.
But Shelter ACT executive officer Leigh Watson told the multi-party committee that her organisation was worried that the lack of means tests or income caps on the scheme was being used by shrewd investors to pick up bargains.
''We talk to our stakeholders and clients in confidence but I can say with some surety that the Land Rent Scheme is being utilised by financially savvy people who know how to legally use the system,'' Ms Watson told the MLAs.
''It's not capped, there's no top income.''
Shelter ACT, which is campaigning for big cash injections into the public and social housing sectors as the solution to Canberra's housing shortage, said land rent was not being promoted to the people it was intended to benefit.
''It's not being promoted to the people who should be using it, but the savvy people are able to access that information,'' Ms Watson said.
The housing campaigner called on the government to introduce and enforce income caps and means test for would-be participants in affordable housing schemes.
A spokeswoman for Treasurer Andrew Barr confirmed yesterday that a review of the scheme, by University of NSW academics had been commissioned but not finalised.
The minister's office said everyone was eligible for the standard land rent rate, an annual rent equal to 4 per cent of the land's unimproved value, but that the concessional rate of 2 per cent was means tested and subject to income caps.
''The purpose of the Land Rent Scheme is to make housing more affordable across the entire housing spectrum, not just at the affordable end of the market,'' the spokeswoman said.
''Whilst Land Rent is applicable to land at the affordable end of the market, it also means reduced costs for people who are transitioning through the property spectrum as they upsize or downsize in line with their changing family needs.
''This will free up more properties throughout the market to enable a varied mix of housing options for all home buyers.''
Meanwhile, the third phase of the government's Affordable Housing Action Plan, launched in Gungahlin yesterday morning, outlines 14 actions that focus on the supply of affordable housing in the ACT.
''The only way to put downward pressure on rents and house prices is to build more houses,'' Mr Barr.
''The city has more than enough houses priced at $1 million, we could do with a hell of a lot more priced at $373,000.''
The plan calls for the alignment of the government's taxation, land release and housing affordability policies.
The ''affordable housing threshold'' has been replaced by three new benchmarks types and sizes at $290,000, $340,000 and $373,000 which is meant to allow developers to offer a greater range of homes while fulfilling their requirements to bring reasonably priced dwellings to the market.
Care Financial Counselling Services director Carmel Franklin welcomed the increase of housing thresholds.