Key Worker and Affordable Housing - Expression of Interest

⁠⁠⁠With the housing crisis adversely affecting the Warrnambool the community, coupled with the limited capacity of local organisations and businesses to attract essential personnel, Warrnambool City Council is inviting expressions of interest from community housing agencies to activate and deliver a key worker accommodation and affordable housing project.

Council is seeks to collaborate with a community housing agency to conduct due diligence and investigate a project to create key worker and affordable housing solutions.

At the initial stage, the proposed project will be developed to enable a community housing agency to establish a local presence and assist in the development of further social and affordable housing stock.

Background

Numerous socio-economic factors have triggered a critical housing crisis in Warrnambool. Key industries including healthcare, education, and construction, struggle to attract essential personnel, negatively affecting the community. The situation is exacerbated by over 400 long-term rentals operating as short-stay accommodation while a number of motels have closed. The following key statistics illustrate the depth of this problem:

• Rental vacancy rate - 0.8% (healthy market rate - 4%);
• Median rental price - $500 (average increase of $100 per week from 2021);
• Total rental properties as a ratio of total dwellings (18% - significantly lower than the state average - 30%);
• 1/3rd of renters facing severe rental stress due to increasing rents;
• Lack of key worker accommodation is having a negative effect on industries being able to fill positions < economic development; and,
• Lack of local presence of community housing agency to prepare shovel-ready projects for the future.

Council's 2019 Social Housing Planning document pinpointed a housing deficit of 1,430 dwellings in Warrnambool, a figure projected to rise to about 2,810 dwellings by 2036 based on current housing growth rates. Even with the record 400 building permits issued by Council in 2022, there remains an urgent need for short to medium-term solutions to alleviate the socio-economic consequences stemming from the housing shortage.

Without a swift and substantial influx of housing construction, the existing crisis will worsen. Both Council and external organisations have reported extreme difficulties in recruiting employees, primarily due to the housing shortage, especially in private rentals. This scarcity has a negative impact on the municipality's ability to attract key workers in need of affordable rental housing and also affects tertiary students. Ongoing advocacy efforts offer no assurance of housing supply through existing funding avenues, unless a shovel-ready project is introduced.

Given, the current circumstances Council has thoroughly considered strategies to tackle the housing issue in the short to medium-term by making use of land owned by either Council or the Victorian Government. While activating Victorian Government land would be a time-consuming process, there is an immediate opportunity for Council to accelerate a key worker and affordable housing development on a section of the land in Harrington Road. This land was part of the buffer zone of the former saleyards, and this approach can be pursued concurrently with the development of the master plan for the entire area.

Proposal

Warrnambool City Council will lease out approximately 15,000sqm of land opposite 177 – 193 Harrington Road, for a period of 10-15 years through a Memorandum of Understanding (MOU) with a community housing agency that will meet the following requirements:

• Build around 40-50 self-contained units using prefabricated modular construction, with a mix of one-bedroom, two-bedroom and three-bedroom units.
• Units to be made available as key worker accommodation for organisations and businesses in the municipality and affordable housing using a 50/50 split.
• Key worker accommodation will be allocated by the community housing agency through an expression of interest from local employers in the municipality that will be opened every two years.
• Affordable housing allocations will be done by the housing agency through its established model with the Department of Housing, primarily targeted at women and children.
• The project will be fully managed by a community housing agency.
• Council will lease the land for an agreed term of 10-15 years. The period will be determined in conjunction with the community housing agency and the funding agency.
• The land will return to Council with all built assets disposed through sale or relocation, at the end of the project period, unless a future agreement determines otherwise.
• The community housing agency will establish a local presence in Warrnambool within two years.
• Further long-term housing projects will be developed in Warrnambool and the South West.

Requirements

Council will lease the land to a registered housing agency. Due diligence will determine the period and modality of the lease, the pursuit and security of funding, the model in which the properties will be managed, the pursuit of the planning exemption and the operation of the site.

Responsibilities

Warrnambool City Council - design-due diligence, concept design, detailed design, site studies and investigations Approvals-all approvals including but not limited to planning and building permit/approval

Community housing agency - collaborate with Council in the concept and detailed design of the project, including site studies and investigation, including community consultation.

Construction of the key worker and affordable housing, including construction documentation and required tendering processes.

Operation of the key worker and affordable housing, including meeting the performance standards set out in the Housing Act 1983.

Funding

The community housing agency will be responsible for all development and management costs for the project, from the period when Council signs the lease agreement.

Funding for the project will be sought through Australian Government or Victorian Government grants and may include philanthropic contributions. This will be determined during the due diligence phase.

Next steps

Based on the response to the Expression of Interest, a community housing agency will be selected to develop and manage the project. The next steps in the project will be:

• Community consultation on the proposal and the project.
• Establish an MOU of the details, terms of the lease, and development with the chosen housing organisation and Warrnambool City Council.
• Draft design layout for the site prepared by the Community Housing Agency in collaboration with Council officers.
• Community engagement process on the draft design and layout for the site. Incorporate any design amendments arising from the community engagement process. Council Report and Decision on the final design and layout for the site.
• Statutory permits/approvals sought for final design.

Submission

Registered housing agencies are invited to respond by December 15, 2023, via email to contact@warrnambool.vic.gov.au

Conditions

Expressions of Interest must be submitted no later than 2pm on Friday 15/12/2023 (the closing time).

Late submissions will not be considered.

Council will neither be responsible, nor pay, for any cost, expense or loss, which may be incurred by any person in connection with the preparation or presentation of an Expression of Interest.

Council does not warrant the accuracy of the content of this Expression of Interest and is not liable for any error or omission in this Expression of Interest.

Persons obtaining or receiving this Expression of Interest document and any other documents issued in relation to the Expression of Interest may use the documents only for the purpose of preparing a submission.

Applicants and their representatives must not engage in any collusive, anti-competitive or similar conduct with any other supplier or person in relation to this Expression of Interest.

Applicants are required to disclose any conflicts of interest in their offer and also notify Council if any conflict of interest arises after lodgement of their offer.

Council reserves the right to discontinue or suspend the Expression of Interest process, extend the closing time of the Expression of Interest, amend this Expression of Interest and negotiate with any prospective applicant