Special Purpose Vehicles in Community Housing: Role, implementation and guidelines

The Challenge

Special Purpose Vehicles (SPVs) are increasingly being utilised within the community housing industry as a strategic tool to facilitate the development and management of social and affordable housing projects. SPVs provide a flexible and effective means of managing large-scale housing projects, facilitating investment, and mitigating risks. Their use is expected to grow as Community Housing Organisations (CHOs) continue to seek innovative solutions to expand the availability of social and affordable housing across Australia.

The Community Housing Industry Association (CHIA) Victoria sought to identify the sector position on SPVs and seek to influence the regulatory, legislative and policy settings that are needed to build a more stable and supportive policy environment to facilitate long-term growth of the community housing sector.

The Action

CHIA Victoria engaged Polis Partners, Gate Xero and Hall & Willcox to consult a variety of stakeholders including community housing providers, commercial investors, developers and State and Federal housing authorities and regulators to gain insights regarding the role of SPVs. Insights were then collated and distilled, informing two separate pieces of work:

• The first was a report discussing the advantages and disadvantages of SPV structures as well as the risks, issues and opportunities that the growth in the number of SPVs creates for the community housing sector. This included potential options and advocacy positions for policy, regulatory and legislative changes to ensure system settings are fit-for-purpose and supportive of the long-term growth and success of the community housing sector.
• The second was a set of guidelines for the Community Housing Sector outlining reasons for establishing an SPV, the risks and opportunities for community housing providers and the practical considerations and processes in establishing and managing an SPV. This outlined types of SPVs, alternative legal and financial structures, along with resourcing, reporting and contractual considerations.

The Results

This project resulted in the completion of two public facing documents for CHIA and its members. The discussion paper was used as a basis by CHIA to negotiate and argue a number of key issues associated with the use of SPVs with state and federal government authorities. The guidelines report was used to educate and advice CHIA members on the implementation and operation of SPVs.