Public Works Committee: Affordable Housing—Direct Delivery Apartments (Lot 51 Bowden, Lot 18 and 59 Prospect)

Mr BROWN (Florey) (11:43): I move:

That the 96^th report of the committee, entitled Affordable Housing—Direct Delivery Apartments (Lot 51 Bowden, Lot 18 and 59 Prospect), be noted.

In November 2023, cabinet approved the 2022-23 Mid-Year Budget Review housing package, which includes Renewal SA's direct delivery of three priority affordable rental housing projects in response to the current housing crisis. These projects will build affordable housing apartments within existing Renewal SA developments at Bowden and Prospect.

The projects aim to provide 180 affordable rental apartments in locations well served by existing transport linkages and amenities, seek funding from the commonwealth through the first round of the Housing Australia Future Fund Facility (HAFFF), deliver a key contribution towards the state's commitments under the National Housing Accord, and deliver built forms that achieve the same design quality and sustainability requirements expected from any developer of a Renewal SA project.

The Bowden Lot 51 site is a rectangular island with access to the Outer Harbor railway and a pedestrian walkway that provides direct access to the Outer Harbor Greenway and Bowden station. First residents are expected to reside in January 2026 and, subject to final design refinement, the Lot 51 project will develop a mixed-use building with:

80 affordable rental apartments comprised of 21 per cent studio, 39 per cent one-bed and 32 per cent two-bed apartments, with a supporting street-fronted residential lobby and a residential community terrace;

four ground-floor loft townhouses, to be sold at market value;

six one-bedroom apartments, designed to achieve highly accessible certification;

a commercial, public multideck car park, with separate public entrance and lobby, to be operated as a paid commercial car park by a third-party operator;

ground-floor retail shopfront tenancies; and

a ground-floor bicycle and scooter hub.

Lot 18 is located within the Prospect Corner project and is the gateway on the corner of Churchill Road and Payinthi Drive. The expectation is for first residents to reside in October 2025, with the project to construct:

a five-level building containing 29 affordable rental apartments comprised of four studio, 10 one-bed and 15 two-bed apartments, with a supporting residential lobby and 13 secure undercroft car parks;

a ground-floor apartment that delivers a Disability Discrimination Act dwelling arrangement; and

a ground-floor bicycle and scooter hub.

Similar to Lot 18, Lot 59 is located within the Prospect Corner project. The site will be serviced by an internal road and has direct access to the Islington train station. With first residents expected to move into dwellings in March 2026, the project will create:

an eight-level building containing 71 affordable rental apartments comprised of three studio apartments, 18 one-bed apartments, 43 two-bed apartments, three two-bed Disability Discrimination Act dwellings, and four three-bed apartments;

a supporting residential lobby;

32 open at-grade car parks; and

a ground-floor bicycle and scooter hub.

All three apartment buildings aim to achieve a five-star Green Star sustainability rating, which is considered Australian best practice.

Cabinet approval for the project was subject to Renewal SA finalising the designs and associated budget approvals. In September 2023, the Department of Treasury and Finance approved initial design and consultation funding of $7.7 million from the central provision, and in January this year the Treasurer issued approval for the balance of the project's capital budget of $94 million, bringing the total cost to build these three affordable rental housing projects to $101.7 million. It is estimated that there will be operating costs of $2.3 million over the delivery of the program for all three apartments. This includes holding costs, legal fees and sales costs.

The program of works is estimated to contribute $72 million to gross state product over its life, peaking at $36 million in 2025-26 during the peak construction period, with the projects forecast to support 231 full-time equivalent jobs during this time. The projects will be delivered following best-practice principles for procurement management following Renewal SA's Project Management Framework.

The agency has identified a number of risks and has considered mitigation measures accordingly: to manage potential risks arising from the project's fast-tracked delivery, the procurement model uses an industry standard lump-sum novated design and construction process to secure early contractor involvement and stage approvals so as to allow early construction and avoid delays. While Renewal SA is responding to government commitments within A Better Housing Future, no direct time or cost penalties threaten the project, should occupation dates extend beyond forecasts.

The project also uses a new partnership model that utilises government capital to deliver affordable housing quickly, while securing a community housing provider (CHP) to acquire the stock at the delivery cost upon practical completion. The state CHP sector is limited and the model will test the appetite of larger interstate CHPs to enter the South Australian market. Renewal SA has begun to engage with CHPs through expression of interest.

It is challenging to build large-scale quality designed affordable apartment accommodation in the current construction pricing environment without government subsidy, either through HAFFF or the state. Renewal SA has engaged an experienced development consultant and cost manager to work closely with design teams at each phase to drive value for money and cost efficiency. Lastly, the fast-tracked nature of the projects and the requirement to find fixed construction pricing and confirm delivery programs pose challenges in sounding the market and finalising exit strategies.

The Bowden and Prospect projects have completed Cultural Heritage Management Plans in negotiation with the Kaurna Yerta Aboriginal Corporation as part of the master development. The design briefs include elements of Kaurna artwork, and the landscaping of all three projects will involve direct engagement with the Kaurna community. The project has identified no state or local heritage impact.

The three projects have received development plan consent, and a detailed review by the Bowden Design Review Panel approved the Bowden project in March this year. The Prospect apartment buildings secured planning approval in February this year via the State Commission Assessment Panel, including a design review by the Office for Design and Architecture South Australia. Both the City of Charles Sturt and the City of Prospect were engaged through the statutory planning process.

The committee examined written and oral evidence in relation to the affordable housing direct delivery apartments at Lot 51 Bowden and Lot 18 and Lot 59 Prospect. Witnesses who appeared before the committee were Shane Wingard, Acting Executive Director, Property and Major Projects, Renewal SA; Peter Gatsios, Acting Executive Director, Residential Project Delivery and Assets, Renewal SA; and Michael Wood, the Executive Director, Commercial and Business Services, Renewal SA. I thank the witnesses for their time.

Based upon the evidence considered, and pursuant to section 12C of the Parliamentary Committees Act 1991, the Public Works Committee reports to parliament that it recommends the proposed public work.

Motion carried.