Project Plan

• This stage could take anywhere from four weeks to three months, depending on the complexity and scale of the project and time taken to negotiate an outcome with the land owner.

This involves:

This stage involves the pre-acquisition appraisal of a land development opportunity, assessment of different development options and assessment of the best and highest use of the property.  The objective of this stage is to screen and assess the merits and the range of commercial, technical, environmental, and market demands along with statutory and planning risks. Key activities in this stage include concept design, yield analysis, financial feasibility analysis, preliminary market research and market comparables, planning assessment and other site specific issues such as environmental, traffic, contamination, and sourcing of potential partners such as community housing organisations operators and major anchor occupiers.

Essential parties involved at this stage include developer, architect, town planner, specialist consultants as needed, and operator partners such as community housing organisations  

Our advice:

Unlike a traditional “build to sell” development, projects that include community housing require the involvement of partners responsible for the project’s operation and stage partners such as community housing organisations providers.  They will assess this development opportunity from a community needs perspective – locational attributes, potential target groups, surrounding supporting services or amenities and the underlying market supply and demand for housing for their particular target group.  It is advisable to closely engage with a community housing organisation at the outset to ensure the project meets their requirements.  Early engagement with a community housing organisation will also provide useful input to the feasibility analysis.

High-rise and/or high amenity developments may require owners corporation fees that are not sustainable for community housing organisations and this should be considered when planning to include community housing in a project.

3 most important jobs in this stage

• Finding partners for the project
• Seeking advice from Local Government on feasibility

• This stage could take anywhere from six months to two years or more, depending on the complexity and scale of the project and buy-in from the local council. Objections from the neighbourhood must be considered.  
• If the project goes to VCAT to resolve objections, an additional 6-12 months could be expected.

This involves:

Developers and their partners prepare town planning documentation with the aim of securing a satisfactory planning permit from the local authorities. Key activities include engagement of a full consultant team to prepare and document the architectural design, liaising and negotiating with the authorities and Council on achieving a mutually beneficial outcome and preparing all the necessary supporting technical reports – including traffic assessment reports, landscaping proposals, waste management plans, sustainability management plans or a needs analysis. Community housing organisations can provide evidence on the housing need in the specific locality. 

Community consultation forms a key part of this stage, and both Council and a community housing partner can play a critical role in getting the support of the local community.

Essential parties involved at this stage include the full development team and any operational partners such as community housing organisations.  Provision of affordable housing is now a key objective of most Councils and incorporating an element of community housing in projects would be favourably considered and potentially fast-tracked within planning authorities.  A community housing organisation can also provide useful supporting information to Council on the real need for community housing in a specific locality.  It will also ensure that the proposed design is fit for purpose to meet the needs of their target groups.

Our advice:

Developers planning to include community housing in their project should ensure that they involve a community housing organisation. They will have design preferences based on client needs and details of ongoing maintenance costs that should be incorporated into the design.

Provision of affordable housing is now a key objective of most Councils and incorporating an element of community housing in projects is likely to be favourably considered by planning authorities. If a significant proportion of the project will be social housing there is even the potential to have planning fast-tracked.  

This stage could take anywhere from six months to two years or more, depending on the complexity and scale of the development, buy in from the local Council and extent of objections from the neighbourhood.  If VCAT is involved, an additional 6-12 months could be expected

Most important jobs in this stage

• Consultation between private developers and community housing providers
• Consultation between private developers and the planning section of local council.

• This stage could take from two months to four months for documentation, and a further four to eight weeks for tendering and builder selection, depending on the complexity and scale of the project.

This involves:

Once planning approval is secured the project moves on to developing detailed design and documentation. Key activities include engaging the full design team of architects, engineers and consultants with the aim of producing a more detailed design. This requires coordinating the various specialist engineering disciplines and documenting the full details of the development, including interiors, finishes and fittings, building envelope, glazing and external cladding, civil and structural engineering plans and other building services designs. Following final documentation of the design, a tender process will take place with the builders based on the form of contract procurement adopted. Early Contractor Involvement or Design & Construct procurement methods could be incorporated to bring in construction expertise early in the process and achieve a higher level of buildability and value for money.  

Incorporating detailed design requirements of operators and housing providers is essential to ensure the final design output is fit for purpose, including specifications of interiors, fittings and finishes, floor plan layouts, and provision of any essential amenities to meet end user requirements.

Our advice:

Fittings and finishes can have a significant impact on maintenance frequency and costs. Community housing organisations should provide input on these and other relevant elements of the design work.This stage could take from 2 months to 4 months for documentation, and a further 4-8 weeks for tendering and builder selection, depending on the complexity and scale of the project.

Most important jobs in this stage

• Sound design suitable for the local area
• Appropriate and effective procurement

• This stage could span several months and will continue into the construction phase or until achievement of financing pre-sales thresholds.

This involves:

This stage involves the creation and implementation of marketing strategies and execution of sales transactions to realise the project’s commercial objectives. Key activities include branding, advertising, public relations, community involvement, market research, pricing, sales and ongoing communication with the target purchaser.  Achieving a level of pre-sales is essential to de-risk the project from a commercial perspective and is also a typical pre-requisite in securing external debt construction financing to start building.  Execution of a successful marketing campaign typically commences with the receipt of a planning permit and forms part of the detailed design process.    Marketers understand the target market and provide expert advice to ensure that the detailed design responds to end-user preferences.  This stage could span several months and will continue into the construction stage or until achievement of financing pre-sales thresholds.

Our advice:

A community housing partner who is involved as a co-developer reduces the need for pre-sales by providing a guaranteed level of funding for their portion of the development. Alternatively, selling units to a community housing organisation at this stage of the development can be a way to achieve bulk pre-sales.

Developers planning to sell units to a community housing organisation should expect to offer them a significant discount on the market price. This cost is best factored in during feasibility assessments to ensure viability for both the developer and community housing organisation.

Most important jobs in this stage

• Strong sales and marketing partners bring the development to life
• A good sale process and lead nurture.

• This stage will take at least three to four months depending on the scale of the project or the type of funder involved.

This involves:

This stage involves sourcing and negotiating on third-party debt or equity capital to either acquire, build or finance residual stock upon completion.  Detailed Design and tender, together with marketing and sales work hand in hand to support the procurement of external finance to complete the project.  External finance provides amplified returns to equity holders and enables equity capital to be deployed across different projects for optimal risk diversification and returns.   

The key parties involved in this stage include developers or project sponsors, banks, external finance brokers and valuers and quantity surveyors.  Banks undertake due diligence on the project from a commercial, financial, and project sponsor perspective to ensure that the project risks are adequately mitigated and that the project has sufficient funds to complete and repay all debt and interest outstanding, whilst still allowing sufficient residual returns to equity holders.  Sources of finance can come from major banks, non-banks, private funders or funds syndication.  A community housing provider can act as a pre-sales purchaser or a fund-through arrangement for developers, thereby minimising the complexities of securing external financing and reducing the time to project completion.

Our advice:

Community housing organisations often rely upon grants to fund development activities, whether this involves construction or is limited to purchasing completed units. The Big Housing Build significantly increases the capital likely to be available to community housing organisations engaging in development or purchasing. However developers should anticipate delays of 3-6 months between the time community housing organisations submit funding applications to when they learn whether funds have been approved.

In addition to grants, community housing organisations can access low-cost debt from both the Victorian and Commonwealth governments and access a range of tax concessions that can reduce some of the costs of delivering a project.

This stage will take at least 3-4 months depending on the scale of the project or the type of funder involved.

Most important jobs in this stage

• Careful financial planning and partnership negotiation
• Transparent reporting on the project.

• Typical duration of construction can range from one year to several years, depending on the scale and complexity of construction.

This involves:

A contractor delivering construction of the project to the required design documentation, budget and within a contractual timeframe.  Key activities include management of construction quality, cost, and time to ensure the finished product meets the original brief and end-user design expectation.  A community housing organisation provider is integral at this stage to ensure the product is delivered to their expectations and quality and in time to meet the market for their target groups.  

Key stakeholders in this stage include builders, sub-contractors, external authorities, project managers and consultants to ensure the quality of the project is maintained and delivered within the contractual timeframes.  At the completion of this stage, the project is inspected, defects identified and rectified and finally handed over to the end users or community housing organisation provider.