Housing industry experts are urging the Senate to pass a build-to-rent bill this week, but it may not be enough to dramatically influence the sector in Canberra.
The bill, which passed the lower house in June, aims to reduce tax paid on build-to-rent developments and provide more security for residents.
The Community Housing Industry Association, National Shelter and Property Council of Australia are calling for amendments to the bill which would ensure the national build-to-rent pipeline was viable.
The changes include allowing for five-year leases for renters and a ban on no-cause evictions, both of which have been endorsed by crossbenchers including David Pocock.
The bill has been stalled in the Senate since June by the Greens and the Coalition.
Pressure for it to pass follows a YouGov 2024 survey found eight in 10 Australians feel there is a lack of affordable housing in their area, and many did not feel they would be able to buy.
Housing was the second-top concern for those surveyed, trumped only by immediate cost-of-living stresses.
Australia's property industry now sees build-to-rent as a solution for many residents who say they can not afford their own home.
The concept involves corporate investment in buildings, at which tenants live long-term, and has been taken up in much of the northern hemisphere, particularly the United States.
The housing group said 105,000 new homes could be delivered across the next decade - including 10,500 affordable rentals - if build-to-rent legislation was passed with their proposed changes.
Ashlee Berry, executive director of the Property Council ACT, said the bill would help all Canberrans have choice in where they lived.
"Build-to-rent offers high-quality, long-term rental options in professionally managed communities ensuring people can live in high-amenity rentals close to work and amenities," she said.
Daniel Potts, a development manager at Amalgamated Property Group, specialises in built-to-rent and has worked on projects like the recently opened Oaks Canopy.
Mr Potts said the limited understanding of build-to-rent in Australia was restricting its potential as a long-term housing solution.
Build-to-rent in Canberra
While the bill was a useful start and endorsed by local developers, Mr Potts said it would not have a particularly large impact on the viability of build-to-rent in Canberra.
There are 2500 dwellings of this kind in the territory pipeline, but zoning laws, lease variation charges and rates can hinder development more than in other jurisdictions.
Mr Potts said costs associated with build-to-rent in Canberra, including hefty taxes, were potentially being passed onto the user.
"For instance, with rates being really high, we have to do our feasibility numbers on rental that withstand the increase that we perceive over a certain period of time. We are always working to a margin," he said.
Mr Potts said looking to overseas examples was important for getting legislation right.
In the United Kingdom, build-to-rent makes up about 20 per cent of the market sector, much of which comes from overseas investment.
But in Canberra, most investment in build-to-rent has been local and does not have the same foreign attraction as larger markets like Sydney.
It was then crucial taxation settings were right for local investors, Mr Potts said.
This could potentially lessen the number of vacant land blocks or offices in the territory which could be used for housing if associated costs were lessened.
"What I would like to see locally is a conversation about how government and private industry could work together and look at sites that could be converted into at market and affordable dwellings," Mr Potts said.
- with AAP
