Specialist disability housing pipeline grows - for now
Delays in funding approvals, frequent changes and lack of direction from the federal government have left two-fifths of providers of Specialist Disability Accommodation feeling unconfident about the sector that has grown into a $2.5 billion asset class in just five years.
While the supply of places for SDA participants – people with disability qualifying for specialist housing paid for by the NDIS – grew 30 per cent from last year, the National Disability Insurance Agency is not providing enough information the fledgling sector needs, respondents to an industry survey say.
The problems hindering providers include long wait times for SDA funding decisions as well as uncertainty around eligibility, the latest Specialist Disability Accommodation: Supply in Australia report says. Just $204 million of the $700 million annual budget was last year allocated in NDIS participants’ plans.
A lack of market information allowing developers and operators to anticipate the types of housing that is needed and where it is needed was one reason that only just over half of all eligible participants were receiving SDA payments, said Summer Foundation general manager Alecia Rathbone, who oversaw the report.
“When you look at 30,000 people who are eligible and only 16,000 with funding – what’s happening to identify those other people to say “this is the housing I need”? Ms Rathbone said.
“How do we identify what housing they need?”
The criticisms aren’t new. A separate report earlier this year representing the views of investors in the sector warned that without reforms to end “opaque” decision-making by the NDIA, growth of the five-year-old sector that could still grow fivefold, was at risk.
Linda Reynolds, who took responsibility for the NDIS in March, said she was working to identify and implement solutions to improve supply and demand signals in the new sector.
The department said since the second half of 2020, the NDIA has been centralising the home and living planning processes in order to consider the needs of participants.
Unresolved uncertainty could crimp investors’ and developers’ willingness to invest in new stock. Nonetheless, the latest report showed a jump in the number of places in development from 1817 in November to 2366 as of August.
The growth in the total pipeline of homes – which take between 12 and 24 months to complete – was positive, as was the jump in Tasmania and the first appearance of a pipeline in NT was positive, Ms Rathbone said.
There was also an increase in the robust category. This housing is for tenants who can behave in a way that may not be safe for themselves or other people. It needs good sound-proofing and a safe space for other tenants or staff.
One of four types of housing in the SDA sector, it has suffered from being the least-developed, in part because it is more land-intensive and the construction costs can be higher.
“There’s a little bit more robust housing,” Ms Rathbone said. “That’s positive.”
The federal government in August agreed to publish quarterly reports giving information about market demand. But problems remain.
Providers quoted in the survey said funding determinations often did not match participants’ eligibility and need and there were insufficient approvals for single resident dwellings.
A failure to fix these could hold back future supply, Ms Rathbone said.
“The next pipeline could look different if there’s an issue with confidence,” she said.
