State Government has the constitutional responsibility to plan for and provide housing assistance including social housing. Local Government is not the level of government responsible for the delivery of social housing. However as the level of government closest to the community Local Government has the closest understanding of local issues such as homelessness and housing poverty. Local Government also has the closest understanding of the impact of the lack of social housing on individuals and families. In turn Local Government carries most of the burden of supporting people when housing costs force them into poverty contribute to physical and mental health problems and eventually leading to crisis. However Local Government does not have the resources necessary to achieve the targets required to address the current and future need for social housing identified within the City of Greater Geelong.

The implementation of any Plan to deliver on these targets will therefore depend on the negotiation of a partnership arrangement between the City of Greater Geelong and both the State and Commonwealth Governments. These partnerships will respond to the following key issues that will impact directly on the effectiveness of the City of Greater Geelong Social Housing Plan:

The scale of investment required in social housing is significant

• An estimated 13 500 new dwellings over 20 years including the replacement of 1 500 existing public housing dwellings that will come to the end of their economic life within that period.
• This is an average of approximately 675 dwellings per annum at a total development cost of about $235M (assuming an average cost of $350 000).

Mechanisms are available to Local Government to reduce the cost required to invest in social housing

• the value of land contributed by Local State and Commonwealth Governments plus contributions negotiated with private developers during planning negotiations is estimated to be able to lower the overall cost of development of social housing by about 20% on average; and
• the impact of the GST rebate if the social housing is delivered through a Registered Housing Agency will further reduce the cost by about 9%; therefore
• the total annual net cost to develop this quantum of social housing is in the order of $170M per annum.

The subsidy required to meet the target for social housing is far greater than any return on investment to the City of Greater Geelong

• the subsidy required to meet the cost of servicing this level of investment (even if all borrowed through an entity such as the National Housing Finance & Investment Corporation at government bond rates plus margin) would be in the vicinity of $10 000 per dwelling per annum or about $6.5M per annum for the annual target of 643 dwellings; whereas
• The City would only generate about $650K in rate revenue from the additional social housing.

The central features of the City of Greater Geelong Social Housing Plan therefore are:

1. The negotiation of a Social Housing Agreement with the Commonwealth Government that includes:
1. A review of all Commonwealth land holdings within the City of Greater Geelong and a commitment to release all sites no longer required in an orderly manner for use as residential development with a minimum of 30% of the lots produced designated for social housing and transferred to a Registered Housing Agency at cost; and
2. Debt finance through NHFIC to an approved Registered Housing Agency in the order of $3.4B distributed over 20 years.
2. The negotiation of a Social Housing Growth Agreement with State Government of Victoria that includes^[1]:
1. A review of all State land holdings within the City of Greater Geelong and a commitment to release all sites no longer required in an orderly manner for use as residential development with a minimum of 30% of the lots produced designated for social housing and transferred to a registered Housing Agency at cost; and
2. A commitment to complete urban renewal plans for Corio Norlane and Whittington including the replacement of 1 500 public housing dwellings over the next 20 years as they reach the end of their economic life; and
3. A Social Housing Growth Fund operating subsidy estimated in the order of $3B spread over 50 years
3. A commitment by the City of Greater Geelong through partnerships with the Commonwealth and Victorian Governments to:
1. A review of all City land holdings within the City of Greater Geelong and a commitment to release all sites no longer required in an orderly manner for use as residential development with a minimum of 30% of the dwelling produced designated for social housing and transferred to a Registered Housing Agency at cost with an option for Council to continue to hold title to the land; and
2. Where there is a demonstrated uplift in the value of private land through a rezoning or development approval the City of Greater Geelong will negotiate the inclusion of affordable housing appropriate to the context and scale of the development (a legitimate target based on the identified demand suggests that 10% social housing is not unreasonable); and
3. A commitment to work with the State Government in the implementation of Urban Renewal Plans for Corio Norlane and Whittington including the resourcing of a community development strategy in each neighbourhood; and
4. A commitment to invest $1M per annum for 20 years into the Registered Housing Agency commissioned with the task of implementing the Social Housing Growth Strategy.
4. Negotiation of a Partnership Agreement with a Registered Housing Agency to ensure the establishment of the following key components of local infrastructure necessary to support social housing growth including:
1. Geelong Affordable Housing Trust (GAHT) – a special purpose investment entity that will hold all assets and contributions provided by Council State and Commonwealth governments and private sector (via Sec 173 Affordable Housing Agreements) and social housing assets; and
2. Geelong Affordable Housing Company (GAHC) – a special purpose affordable housing development company that is registered as a Housing Association under the Victorian Housing Act and appointed by Council as Trustee of the above rust (refer to Executive Summary for more details).

This ambitious expectation by the City is premised on the following facts which set Geelong apart:

1. The municipality is the largest by population in Victoria with significant growth expectations driven by State and Commonwealth settlement and regional development plans – Council has every right to expect the support of both levels of government to address the major social infrastructure requirements of the City.
2. The municipality is unique in Victoria in that it has all of the features of a major metropolis including a central business district undergoing rejuvenation through redevelopment including high rise service oriented office towers alongside apartment buildings; an outer fringe which is undergoing rapid growth through greenfield developments; and established suburban communities being reshaped around local retail centres and transport hubs.
3. The municipality has been at the forefront of the restructuring of Australian industry with the closure of many significant manufacturing industries resulting in considerable unemployment and transitional employment options.
4. There is currently a very low proportion of social housing in the municipality much of which is nearing the end of its economic life is underutilised and is not matched to current demand.
5. That level of investment is way beyond the capacity of the City to meet and can only be addressed through a coordinated strategy which has the commitment of both the State and Commonwealth Governments as well as the City of Greater Geelong.