Examining green affordable housing policy outcomes in Australia: A systems approach

Abstract

The Australian affordable rental housing sector has historically faced barriers to green building (GB) adoption due to issues of split-incentives, despite financial support from the commonwealth. This paper explores how a recent shift towards bond-based funding mechanisms offer an opportunity to integrate green building practices, and influence regional social, environmental and economic outcomes. A novel system dynamics model is developed to forecast a business as usual (BAU) and green-building scenario framed around the recently introduced Australian Affordable Housing Bond Aggregator (AHBA) policy framework. The purpose of the model is to examine how a mandate on green building standards together with the use of green versus conventional bonds impact social, environmental and economic outcomes of the framework over a 20-year horizon, within the South East Queensland metropolitan area of Australia. The study determined that the green building framework would deliver 2.37% less housing overall due to higher initial capital costs. However, offers substantial long-term energy and water efficiency benefits, improved affordability for tenants due to reduced utility costs, deferred water and energy infrastructure benefits, and considerable contributions towards Australia’s carbon emission reduction targets. Tenants are expected to benefit from a 45–59% reduction in energy and a 27% decrease in water bills. Moreover, a shift to affordable green building policy could contribute to 2.9% of Australia’s Conference of Parties (2030) carbon emissions reduction target if applied nationally. The study concludes with a sensitivity analysis to reveal policy refinement recommendations that would yield the benefits of green affordable housing without sacrificing the small reduction in housing stock delivered by the proposed program.