Social Housing Pipeline Program - Answers To Likely And Asked Questions 30 January 2017

Answers to likely and asked questions – updated Social Housing Pipeline Program

Current at 30 January 2017

When is the program going to start? Having briefed the sector on the government's plans to increase the supply of social housing last October and following discussions with potential participants, we opened a formal expression of interest in early December. Detailed submissions are due by 5pm on Friday 24 February 2017 (note this extension from 10 February), ahead of a request for proposal stage. By mid-2017 we expect to have signed up partners to commence delivery of a first stage across more than 50 sites in the western corridor, including Geelong.

How many homes do you think this program will generate in stage one? This is a significant project involving vacant or under-utilised land currently owned by the Director of Housing. It is anticipated that we will work with the registered housing sector and private construction companies to grow social and private housing by up to 100 dwellings, including in Geelong.

Where are the properties likely to be built? Properties will be built across regional Victoria and suburban Melbourne, commencing with stage one in the western corridor. Suburbs identified for the pilot include Braybrook, Norlane, St Albans and Maidstone.

Is this about transferring state assets to the private sector – privatisation by stealth? This pipeline program is about growing the usable supply of social housing. A number of Director of Housing vacant land parcels will be used to increase the number of homes we have, and improve their quality, to address demand. The director will maintain an interest in any social housing that is built and ensure these homes are used to house those Victorians most in need.

How soon will we see results? In the first 12 months we will identify and examine options for locations that are suitable to develop new social housing. At the same time we will commence the process of using Director of Housing vacant land to re-invest into this initiative.

By mid-2017 we should be in a position to commence the planning application process on some of the approved projects. Delivery of new social housing through this initiative should occur from mid-2018 in the western corridor and ramp up across the other parts of the state in 2019 and 2020.

Why haven't vacant and under-utilised land assets been developed previously? The government now recognises a more urgent and innovative approach is needed to refresh its assets and create more social housing. We're doing this by encouraging the registered housing sector and private construction companies and their partners to take a greater role in project identification and delivery, in partnership with us.

When is the closing date for applications to be submitted? Applications close at 5pm on Friday 24 February 2017.

Why wasn’t our firm/organisation notified to be in the EOI process? The EOI is open to any interested organisation to participate in. We have also uploaded the EOI to the Tenders Victoria site [ www.tenders.vic.gov.au ]and advertised in daily newspapers. Full information and documents are at: www.dhs.vic.gov.au/funded-agency-channel/spotlight What ratio of social versus private dwellings do you believe will be required to deliver the stock? The department will negotiate with participants to work on a ratio that will deliver balanced social and private housing numbers that are commercially viable and meet program objectives.

Does the department prefer one entity or multiple for the entire program? This will depend on the development model to be determined at the request for proposal stage.

Is any additional capital funding committed from the government? Yes - $20 million each year for three years until 2019-20.

The valuation for Stradbroke Drive St Albans appears expensive compared to Walker Court St Albans. Site values noted in the report are high-level book value only, extracted directly from a data system to be an estimate only. We have requested market valuations for all 52 sites from the Valuer-General Victoria. This data will be provided once received. We are reviewing this site and will advise any re-evaluation. Other questions from external parties Under Schedule 2 – Financial Capacity you ask for a statement in a letter form confirming the respondent is solvent. Can that letter just be on the organisation’s letterhead signed by the CEO, or does it need to be from our auditor? It would cost approx. $2,500 to come from the auditor. Organisation/company letterhead is sufficient at this stage, subject to further review if required.\

DHHS also asks for planned future projects and/or services that could materially impact on the respondent’s financial capacity to deliver the project. We have a number of projects under way but they are all fully-funded. Do we need to include those? Given they are funded, we don’t expect them to have any impact on our ability to deliver the project. You also ask much the same question under Schedule 5. Yes, you can list those projects with brief comments such as "fully-funded".

Is a modular solution acceptable; as this would allow further value capture of the land with the transport of the building asset to another location if requirements demanded? Yes, a modular solution is acceptable subject to further review and assessment on the potential impact it may have on the program budget and timeline. Investment logic mapping will be applied to test all modular solutions submitted.

Are single or multi-level housing options preferred? Building design will vary from site-to-site subject to local planning controls. For public / social housing properties, we generally allow single-storey units for a standard dual occupancy site. For larger sites, multi-level apartments and double-storey townhouses will be considered subject to the relevant planning schemes.

We assume varying sized accommodation can be offered (1 to 4-bedroom), please confirm. Our housing demand profile has the shortage of one bedroom housing at the top level followed by two bedrooms. Demand for three and four bedrooms are less significant and only required when there is a special request. It will be assessed case-by-case.

Is there a specific demographic that the dwellings are aimed at or is it to be a cross-section of end user age groups, physical abilities etc? No specific demographic is aimed at and generally the new stock will be focused on general public or social housing demand. The end user profiles have not been defined to specific sites, however this detail will be addressed at the next stage, request for proposal.

We are keen to understand the demand profile, which has been stated (p5 of Invitation document) as an addendum to be issued in due course. This document will have significant impact on modelling. The demand profile is being validated and will be released as soon as available, anticipated to be early February – before the close of the EOI on Friday 24 February.

It appears this program is for developers, I was wondering if the department will go out for project management services for this program of works? The program is open to any party that meets the project selection criteria as specified in the EOI documents. Project management will be managed by the successful tenderer.

Schedule 2 Financial Capacity: is demonstration of financial capacity to include subcontractors if the respondent is taking delivery risk? The financial capacity is to be demonstrated only at the head contractor level as the respondent is taking the delivery risk and is responsible for checking the financial capacity of any of its subcontractors.

Does the three-year timeline relate only to delivery of DoH housing stock to be returned to the value of the land of the 52 sites? No. The three-year timeline is planned for completion of the entire program across Victoria to ensure consistency and to avoid land banking.

Authorised and published by the Victorian Government, 1 Treasury Place, Melbourne.

Available at www.dhs.vic.gov.au/funded-agency-channel/spotlight

Also at www.tenders.vic.gov.au

By email: [email protected]