Bungled Government housing investment program leaves private investors and disability sector reeling

Hundreds of brand-new, purpose-built homes are standing empty around the country. At the cross-section of multiple crises, from housing to strained hospital and RAC capacity, this situation seems absurd at best, and despairing at worst. These homes, with extra-wide doorways, wheelchair accessible entrances and rooms, are residences built for people with significant disabilities. The result of a federal government scheme, to assist people with disabilities leave group homes, and many times RACs, hundreds of these homes have been developed across the country in newer estates. It’s this fact, as reported by Four Corners, that over a 1000 of these purpose-built homes are currently sitting vacant, that has investors and experts across disability and healthcare reeling.

Large returns promised

The scheme is legitimate. The federal government facilitated the creation of the Specialist Disability Accommodation (SDA) scheme with the intention to provide opportunities for people with significant disability to move away from institutional care such as RAC or group homes. Across disability, aged care and health care, many lauded the positive outcomes, freeing up beds in the aged sector that was already under strain, and providing independent living for younger people with significant disability. Within the scheme, the government invited private investors to develop the customised, smaller-scale homes that would provide this independent living. Investors were told they could expect to see upwards of $110,000 per annum for each tenant that moved in matching the criteria of the scheme.

Thousands of people across the country responded to the investment offer under the scheme. Four Corners spoke to Tony Wilson and his wife about what drew them in, “It sounded like a good investment to us, an ethical investment, which was something we were interested in, the idea of providing a property to someone in need.” After talking it over with their financial adviser, who was enthusiastic about the scheme, and spending close to $2 million, the Wilsons built two disability houses, one in Perth, and the other in the outer banks of Melbourne’s suburbs, looking forward to the guided expectations of upwards of $150,000 a year. With the houses sparkling new and ready to provide custom-built independent living, it quickly, then over a protracted time of shock, became evident that no-one wanted to become their tenants.

No one is moving in

The couple has turned to numerous disability providers and experts hoping to fill the two properties, yet over 12 months later, the Wilson’s haven’t been able to connect with tenants with SDA-eligibility. Looking into options, the Wilson’s have found that if they choose to sell their custom-built houses, they are set to lose hundreds of thousands due to a now over-supply of disability houses where they have built.

Frustration is building over the failure of the scheme, and those it impacts, both investors and those who are eligible for housing under it.

Countless investors across Australia have developed and bought these disability homes where there is seemingly a mismatch in location, with significant impacts, that are turning eligible tenants off moving in. The fact that these builds have gone ahead, under the enthusiastic advice of investment and property advisers is additionally of serious concern.

What went so wrong?

Experts have weighed in on the fallout. They pinpoint that the NDIA, the corporate Commonwealth entity that oversees questions about the NDIS and eligibility for SDA tenants, is yet to offer up comprehensive and clear reports, and findings, about where eligible SDA disability tenants are wanting to reside.

Goro Gupta spoke to Four Corners about the consequences of this lack of data to guide these investor builds under the scheme. As is the case with most major cities in Australia, central suburb land prices have sky-rocketed, meaning new developments have moved to the outer fringes, and regional areas, where land is more affordable.

That tracks for Gupta, “That’s why, of course, the average investor wants to invest” however, “it’s not necessarily where people with disabilities want to live.”

Seeing a newer estate development on the outer fringes of Melbourne, he is surprised to see the numbers of custom-built houses for people with significant disabilities.

He assesses, “In these areas, there’s a lack of amenities,” continuing, “it’s not close to shops, it’s not close to the allied health services that people with disabilities need on a day-to-day basis.” He says what he sees, “I mean, have a look at this area. It’s paddocks.”

The high cost to all

The fallout continues. Those who have invested under the scheme would see a huge short-fall if they rented to tenants not under the SDA scheme. This means countless homes, likely more than the 1000 reported, will continue to sit empty in the hope of filling it with an eligible disability client that would bring in the government backed rent of hundreds of thousands.

Many across the disability space are aghast at what they see as gross mismanagement of a scheme that should have positively impacted thousands of lives. Jeremy Hope, the Ceo of SDA Alliance says, “I would argue that there’s well in excess of a thousand empty homes across Australia at the moment.” As to the hope of the scheme initially, he explains, “the intent of SDA was … that there was meant to be some maturity of the investors, the builders, the providers to have those conversations with participants and support providers around where people wanted to live.” He laments, “We can clearly see in the data that that didn’t occur.”

The scheme can and must work

Four Corners spoke to Bruce Camplin, a SDA eligible tenant whose life was changed forever moving into his very central home in the vibrant heart of the Gold Coast.

He speaks to the critical need for this scheme to work, “I’m so grateful for the opportunity … I’ve embraced it and it’s only been a positive for me.”

Camplin shared that for 50 years of his life he was living in institutions, like RAC, with no privacy, agency or independence. He speaks of loving his own place, putting his personal touch and importantly, needing less time with support workers as well.

It is critical that there is a comprehensive and coordinated effort from government bodies imparted into schemes like the SDA. With increasing pressure seen in hospitals, unable to discharge seniors due to lack of places in RAC, and the only ever-increasing pressure on RAC as Australia’s population ages, those who should not be in aged care beds must have better options. The multi-sector wide challenges facing Australia deserve and require substantial data and support in their solves. For the full and independent life younger persons with disability deserve, and are capable of, as well as helping to foster a sustainable RAC system, schemes like SDA must not be squandered, mismanaged or wasted.

Fumbling the ball

Brent Woolgar, a disability housing consultant puts it plainly, “I just have this real sense that we’re really getting to a point where we have potentially squandered a once-in-a-generation, potentially multiple-generation opportunity, to provide amazing housing outcomes for people with disability.”

Core to the “market failure” he sees of the rollout of the scheme, is Government mismanagement of agency scope and oversight. He believes a central component leading to failure was that Canberra expected the NDIA, constructed to support people with a disability navigate the NDIS, to oversee a mass housing development scheme.

He says, “I do think there was a potential huge missed opportunity for the community housing sector to get more engaged, and I think we would’ve had a much more successful outcome.”

In a statement the NDIA noted, “The NDIA is committed to supporting a robust and efficient market for Specialist Disability Accommodation that gives NDIS participants the modern options and choices that they deserve.”

“SDA investors should always conduct their own thorough due diligence and research, and seek independent legal and financial advice when deciding whether to invest in SDA.”

The Wilsons are planning to commence a class action against, as yet, unnamed investment brokers.

He speaks to the wider impact the glut of empty custom-built disability homes has had, “This is effectively a crisis for hundreds of people that have been affected by this on both sides of the fence, whether it’s an investor or someone that’s looking for a home.”