Labor reworks $10b affordable homes plan, but providers fear debt trap

Labor has made sweeping changes to its flagship affordable housing scheme that it hopes will mean developers are left with less debt and more likely to own the low-cost homes for longer, as it attempts to correct the slow roll-out of the $10 billion incentive plan.

In briefings to the industry, Housing Australia said the fund’s third and final tranche – to build 21,350 homes – would double the interest-free portion of the loan to 20 per cent in the hope that community housing providers would end up with less debt once the 25-year subsidy period ends.