Federal Government’s Beleagured NRAS Suffers Another Setback
Construction of the $250 million mixed-use development was to have started this month but has been pushed forward about a year according to Hampton joint managing director Paul Hameister, who dismissed speculation the consortium will sell the 1.2 hectare site it reportedly paid $10 million for in early 2008.
Former planning minister Justin Madden approved the 500-plus unit Coburg project in March 2010. Most dwellings within the proposed project at the south-west corner of Bell and Rodder streets would be configured as studio and one bedroom flats.
Half of the units were to have been funded by the NRAS – a program which operates like a “buy and leaseback”, where investors own the property asset but appoint a manager to sublease them to eligible tenants.
In 2010, The Urban Taskforce Australia warned that developers and institutions considered the scheme problematic. The “mum and dad” investor group which were also expected to invest into the scheme, were turned off after 2008 rulings by the Australian Tax Office which disallowed them pocketing annual tax subsidies of about $8600, which had been marketed to them.
Speculation of property sharks abusing the scheme, and agents pocketing extra commissions of $30,000 to sell NRAS units, also dampened perceptions of the initiative.
The scheme is reportedly unlikely to deliver anywhere near the 50,000 new affordable rental homes promised by mid-2012.
Interestingly – the Australian Greens claim to have convinced treasurer Wayne Swan in February this year against reducing the size of the cap on the number of planned NRAS dwellings to 35,000.
Hamton also proposed affordable housing in its Eden project, being developed on the banks of the Yarra River where Abbotsford merges with Hawthorn, Kew and Richmond. However, Circa was one of the bigger affordable housing proposals offered to be constructed by the private sector in Melbourne.
