Delays in finalising funding agreements under Australia’s flagship affordable housing program are forcing some community housing providers to abandon projects that are no longer financially viable, raising fresh concerns about the pace and effectiveness of delivery.
According to the Australian Financial Review, Housing Australia chief executive Scott Langford confirmed that a small number of projects approved under the $10 billion Housing Australia Future Fund (HAFF) are struggling to progress because market and planning conditions have shifted since contracts were signed last year.
Housing Australia has executed 279 contracts to deliver 18,650 social and affordable homes under the HAFF, which aims to support 40,000 homes over five years. Langford said the agency is now working with affected providers to transfer stalled projects to alternative partners where possible, rather than cancelling them outright.
“Conditions may have changed between when they’ve signed the contract and now,” Langford said, citing issues such as planning approvals, builder arrangements and investor commitments. While no provider has formally withdrawn after contract signing, he said the number of challenged projects was “less than a handful,” and some bidders exited earlier in the process.
The difficulties have added fuel to political criticism of the scheme. Opposition housing spokesperson Senator Andrew Bragg labelled the HAFF inefficient and wasteful, arguing that delays and project reshuffling undermine confidence in the program and risk taxpayer money.
Langford acknowledged that lessons from the first funding round are shaping the design of the next phase, including faster pathways to financial close and clearer timelines. A new tender round covering an additional 21,305 homes opened last week, with projects required to be operational by 30 June 2029.
Industry participants say the compressed timeframe may push providers toward purchasing completed or near-complete housing from commercial developers rather than building new stock, particularly for projects without full planning approval. Langford countered that average apartment construction timelines and state-based fast-track planning pathways still allow room for new developments to proceed.
Beyond delivery speed, the HAFF faces longer-term questions about sustainability. Most projects receive annual availability payments for 25 years, after which homes may be sold into the private market. Advocates are urging the government to prioritise proposals that retain housing in the social and affordable sector beyond that period, even if it reduces the total number of homes delivered.
Langford said Housing Australia must balance immediate supply needs with long-term value, noting that lower subsidies for projects expected to realise capital gains later could free up funding for more homes now.
As staffing changes and governance challenges continue at Housing Australia, the third funding round will be a critical test of whether the agency can translate policy ambition into durable housing outcomes at scale.
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