TY  - RPRT
AB  - This study provides a review of housing policies across an array of countries that have a similar level of economic development to that of Australia but have addressed housing questions in different ways.
AU  - Lawson, J
AU  - Milligan, V
CY  - Melbourne
L1  - internal-pdf://0525336642/AHURI_Final_Report_No110_International_trends_.pdf
M3  - FR
N1  - These two sources provide a description and assessment of the Austrian bond financing mechanism, Housing Construction Convertible Bonds (HCCB), which has been successful at attracting and maintaining large scale private investment in affordable housing.
In the HCCB model, funds are raised by the sale of tax privileged bonds by private Housing Banks, effectively secured by adequate grant and subordinate public loans for approved projects by registered providers (Julie Lawson et al. 2009).
Lawson and Milligan (2007) find that Austria has maintained supply-side funding initiatives for the affordable housing sector throughout the twentieth century despite many other nations moving toward demand-side subsidies (131). Supply-side initiatives benefit around 80 per cent of the population and are capped annually depending on need and market capacity.
This has resulted in a well regulated and financed sector within which institutional and individual investors feel comfortable and confident in investing. A key initiative is the HCCB scheme, which is predominately used for the construction of affordable housing in the not-for-profit sector (Julie Lawson & Milligan 2007 131).
The HCCB scheme was introduced in 1993 and provides a special circuit of capital to finance affordable housing through the sale of bonds by Housing Banks. The Housing Banks were created as subsidiaries of a number of major banks with preferential underwriting criteria that reduced their operational lower transaction costs (Lawson et al. 2009). Funds raised by the Housing Banks must be used to finance approved limited profit housing projects by registered social landlords.
Bond purchasers receive progressive tax incentives. The cost of the bond is tax deductible at rates varying with household type and income. Purchasers are required to hold them for a minimum of 10 years and in return receive tax relief on the first four per cent of returns. (Lawson et al. 2009).
The research finds that the scheme has been very successful. Between 1994 and 2004 €8 billion worth of bonds were issued and 100 000 dwellings were financed. Similarly to Switzerland, investors tend to be those seeking low-risk investors such as insurance companies and pension funds (Lawson and Milligan 2007 131).
In addition to the bonds being a low-risk and secure form of investment, other incentives include tax relief on the first four per cent of return and the ability to tax deduct bonds as a special expense up to a capped amount per person or household for lower-income investors (132).
The program has generated significant leverage. Lawson et al. (2009) report Housing Bank Austria 2006 data that for every €1 of foregone tax revenue, €19 of commercial investment has been committed to affordable housing production. 43
Housing Banks assist around 45 percent of financing requirements of new housing and refurbishment of affordable housing, generating approximately €1.5 billion annually, though demand has been affected by the Global Financial Crisis (Lawson et al. 2009).
Lawson and Milligan (2007) also highlight important complementary policy settings and social context which facilitates the successful delivery of affordable housing outcomes from the bond financing scheme.
The social housing sector is dominated by the not-for-profit sector, however for profit companies can develop and manage social housing if they adhere to legislation that limits profit margins and regulates activity (132). Two hundred limited-profit housing associations presently own and manage 22.5 per cent of primary residence in Austria, roughly equating to 740 000 dwellings (132).
Rents are low on average as they are based on the cost of construction and are fixed (yet indexed) in long-term tenancy agreements however rental stress still exists amongst lower-income households despite a small amount of demand-side rental assistance (131,133).
Eligibility criteria are broad and both low and middle-income households rent in the social housing sector. This, in addition to rents based on construction costs, results in a financially viable and non-stigmatised social housing sector (133).
The sector is both self audited and publically regulated. Regulation covers rent levels, profit margins and the type of developments that can be constructed (133). The following section details the regulatory mechanisms deployed in Austria in more detail.
Law
son and Milligan outline the following actions Australia could implement to develop such a bond financing scheme (135):

NV  - 60323
PB  - Australian Housing and Urban ÂþÌìÌÃÈë¿Ú Institute Limited
PY  - 2007
RP  - These two sources provide a description and assessment of the Austrian bond financing mechanism, Housing Construction Convertible Bonds (HCCB), which has been successful at attracting and maintaining large scale private investment in affordable housing.
In the HCCB model, funds are raised by the sale of tax privileged bonds by private Housing Banks, effectively secured by adequate grant and subordinate public loans for approved projects by registered providers (Julie Lawson et al. 2009).
Lawson and Milligan (2007) find that Austria has maintained supply-side funding initiatives for the affordable housing sector throughout the twentieth century despite many other nations moving toward demand-side subsidies (131). Supply-side initiatives benefit around 80 per cent of the population and are capped annually depending on need and market capacity.
This has resulted in a well regulated and financed sector within which institutional and individual investors feel comfortable and confident in investing. A key initiative is the HCCB scheme, which is predominately used for the construction of affordable housing in the not-for-profit sector (Julie Lawson & Milligan 2007 131).
The HCCB scheme was introduced in 1993 and provides a special circuit of capital to finance affordable housing through the sale of bonds by Housing Banks. The Housing Banks were created as subsidiaries of a number of major banks with preferential underwriting criteria that reduced their operational lower transaction costs (Lawson et al. 2009). Funds raised by the Housing Banks must be used to finance approved limited profit housing projects by registered social landlords.
Bond purchasers receive progressive tax incentives. The cost of the bond is tax deductible at rates varying with household type and income. Purchasers are required to hold them for a minimum of 10 years and in return receive tax relief on the first four per cent of returns. (Lawson et al. 2009).
The research finds that the scheme has been very successful. Between 1994 and 2004 €8 billion worth of bonds were issued and 100 000 dwellings were financed. Similarly to Switzerland, investors tend to be those seeking low-risk investors such as insurance companies and pension funds (Lawson and Milligan 2007 131).
In addition to the bonds being a low-risk and secure form of investment, other incentives include tax relief on the first four per cent of return and the ability to tax deduct bonds as a special expense up to a capped amount per person or household for lower-income investors (132).
The program has generated significant leverage. Lawson et al. (2009) report Housing Bank Austria 2006 data that for every €1 of foregone tax revenue, €19 of commercial investment has been committed to affordable housing production. 43
Housing Banks assist around 45 percent of financing requirements of new housing and refurbishment of affordable housing, generating approximately €1.5 billion annually, though demand has been affected by the Global Financial Crisis (Lawson et al. 2009).
Lawson and Milligan (2007) also highlight important complementary policy settings and social context which facilitates the successful delivery of affordable housing outcomes from the bond financing scheme.
The social housing sector is dominated by the not-for-profit sector, however for profit companies can develop and manage social housing if they adhere to legislation that limits profit margins and regulates activity (132). Two hundred limited-profit housing associations presently own and manage 22.5 per cent of primary residence in Austria, roughly equating to 740 000 dwellings (132).
Rents are low on average as they are based on the cost of construction and are fixed (yet indexed) in long-term tenancy agreements however rental stress still exists amongst lower-income households despite a small amount of demand-side rental assistance (131,133).
Eligibility criteria are broad and both low and middle-income households rent in the social housing sector. This, in addition to rents based on construction costs, results in a financially viable and non-stigmatised social housing sector (133).
The sector is both self audited and publically regulated. Regulation covers rent levels, profit margins and the type of developments that can be constructed (133). The following section details the regulatory mechanisms deployed in Austria in more detail.
Law
son and Milligan outline the following actions Australia could implement to develop such a bond financing scheme (135):

ST  - International trends in housing and policy responses
T2  - ÂþÌìÌÃÈë¿ÚFinal Report No. 110
TI  - International trends in housing and policy responses
UR  - /research/final-reports/110
ID  - 197
ER  -