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Essential worker housing affordability crisis costing Australia $64 billion

06 October 2023

New research has laid bare the cost to the community of Australia’s shortage of affordable housing close to the workplaces of essential workers in capital cities.


There are 365 affordable housing units across seven sites in the Aware Super portfolio, including Meridian at Miranda, in Sydney’s south.

The nation’s failure to provide affordable housing in capital cities close to where essential workers such as nurses, teachers and police officers work is siphoning from a potential $64 billion boon that could be generated from associated individual, employer and community benefits.

The calculations were released by top-performing industry super fund, Aware Super, and were the result of expert analysis of the socio-economic benefits of 365 affordable housing units in seven assets across the Aware Super Essential Worker Housing (EWH) Program.

The modelling found each essential worker in the program was able to live an average of nine kilometres closer to their workplace, shaving off 112 hours of commuting time each year and resulting in a potential generation of an additional $45,500 in benefits shared across local employers, communities and individual tenants. There are currently 1.4 million essential workers living in Australia’s capital cities.

The Aware Super EWH program, which was established in 2018, offers essential workers access to quality rental housing near essential and social infrastructure, aimed at below market rates whilst generating good risk-adjusted returns.

Aware Super CEO Deanne Stewart said the study came at a time when the nation needed an innovative and groundbreaking approach to address the chronic housing shortage – a crisis that was a drain on Australian families, employers and communities.


“This study highlights that in Australia, where 66% – 1.4 million – of our nation’s essential workers live in a Greater Capital City Area, we have to do more to ensure they and their employers and local communities are properly catered for,” Ms Stewart said. 


“As the pioneering developer of build-to-rent housing for Australia’s essential workers, Aware Super can’t solve this problem on our own. We’re extremely proud that we’ve identified a strong-performing asset class that benefits our members through investment returns, at the exact same time as delivering a scalable, replicable contribution to the nation’s housing crisis.

“Whether it is the approximate $111 per week each tenant can save on rent, or the extensive annual savings – such as the 112 hours of reduced commuting time for each tenant, the $12.82 million of employer benefits or the additional $4.2 million in socio-economic and environmental benefits for communities and individuals – the evidence is clear: we must do more.”

Ms Stewart also pointed to the mutual benefit of the Aware Super EWH program, where fund members benefit from stable tenants who typically stay for longer durations, while tenants themselves have greater certainty, security and transparency of their arrangements.

A pioneer in the Australian build-to-rent sector, Aware Super has already committed $1.5 billion over the next five years to fuel the development of over 2,000 apartments that will include affordable essential worker housing.

“We are pleased to see Federal and State Governments taking the issue of housing seriously, including the measures recently announced by the NSW and Victorian governments, but more can and must be done to deepen the impact of these policies,” said Ms Stewart.

“The demonstrable benefits identified from Aware Super’s portfolio assets are significant in their own right. Our hope is that by sharing this data freely and widely, we can help more investors realise the opportunity to learn from our experience and more fully assess the opportunity to build high-quality housing at the kind of scale that will put affordable living into the reach of every Australian family.

“In addition, we are absolutely calling for policy changes at every level of government to help reduce the cost of building these essential, affordable housing developments, to help lower the bar to entry for institutional investors.

“Broad-based availability payments or other tax offsets would also help improve the feasibility of long-term investment in affordable housing stock.

“A joined-up suite of policies from all levels of government would create the strong foundation that would allow institutional investors like Aware Super to scale up our ambitions to provide affordable housing for more Australians.

“If we want to break down, brick by brick, those obstacles preventing us from scaling up our commitment in a sector that not only provides our members a source of stable returns, but also houses those who provide our families and communities with essential services, then we need to work together.

“The shortage of housing isn’t a new issue facing our society. We’ve been on the frontlines watching it evolve and deepen for the last five years.”

National initiatives

“Allowing investors in affordable housing to access the same GST treatment as Community Housing Providers would materially reduce the cost of development,” said Ms Stewart.

State initiatives

She added: “Land tax and stamp duty relief offer material savings to the cost of developing and maintaining affordable housing, improving achievable rates of return for investors while helping to keep rent prices within an appropriate range for local areas.

“Releasing additional land and engaging constructively in zoning conversations are also valuable initiatives that do already happen today but can be enhanced by more fulsome consideration of the tax arrangements that apply to these developments.”

Council initiatives

"Councils can play a really critical role in helping Australia to realise some of this $64 billion potential by challenging long-held assumptions about higher-density developments within local planning considerations,” said Ms Stewart.

“We’d urge councils to engage in good faith negotiations on questions of density, particularly where a property is attracting really great tenants into a community – essential workers are invariably community-oriented, often wanting to live close to where they work in healthcare, education, emergency services or the public service.

“Our property managers tell us our tenants stay in our properties longer, they care for their homes really well, and with a high proportion of shift workers they’re not material contributors to local area peak-hour congestion – and it’s easy to see that feedback coming through in the analysis.”


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