This paper addresses the question of how to leverage greater investment in affordable housing in the context of investment returns typically too low to attract investors and limited government funding to directly bridge this gap. It contemplates various policy, planning, and financing mechanisms to this end. It draws on research carried out by the Transforming Housing team at The University of Melbourne, which has also been used to inform the options paper developed to provide a basis for discussion at an affordable housing summit held at the University in April/May 2015.

Semi-structured interviews were conducted with several key stakeholders already involved, or with the potential to be involved, in the delivery of affordable housing in Melbourne: three community housing organizations, two superannuation funds, a property fund manager, a philanthropic foundation, and a bank. In addition, a few informal discussions were held with some of these stakeholders, as well as state and local government officers. Key issues emerging from the interviews include the ‘gap’ between returns delivered by investment in affordable housing and those expected by most investors, limited government funding available to ‘bridge’ this gap, and additional costs arising from regulatory inflexibility, and market, planning, and development risk.