Uncertainty continues to choke the $2.5 billion SDA sector

Many specialist disability accommodation providers remain under significant financial pressure due to the ongoing uncertainties in the market and challenges in dealing with the National Agency for Disability Insurance, which in turn creates supply problems.

SDA, a now $2.5 billion asset class, accounts for an estimated 30,000 people, or 6 percent, of the National Disability Insurance Scheme’s participants.

Despite starting in 2016, SDA funding is currently disbursed to just over half of NDIS participants, with 15,000 people still living in government housing, hostels, nursing homes or with families.

NDIA originally forecast that all 30,000 participants would receive SDA payments by 2025. As of mid-2022, a total of 19,300 participants in 7000 homes have received SDA support funded through their NDIS plans.

Alecia Rathbone, chief social enterprise officer at SDA platform Housing Hub, said The Urban Developer This sentiment within the six-year-old sector worsened due to the NDIA’s “opaque” and “slow” decision-making due to its misunderstanding and mismanagement of its participants and pipeline.

Rathbone, who is also general manager of the non-profit advocacy group Summer Foundation, will be among the speakers The Urban Developers upcoming SDA vSummit.

“The biggest problem with SDA is that there is a lack of demand. Having so many people with money in their NDIS plan to buy or rent a property and only have half the supply for six years is really worrying,” she said.

▲ A lack of market information that allows developers and operators to anticipate the types of housing needed and the location where they will be needed.

Rathone said that the fact that so many people who were eligible for SDA funding have not yet received payments does not necessarily indicate insufficient housing demand, but rather administrative inefficiencies in identifying eligible NDIS participants and the approval of SDA funding.

“On the other hand, in completed projects, in some scenarios, participants have requested a certain type of SDA based on advice from doctors and healthcare professionals, but are receiving something completely different,” Rathbone said.

“That shakes the confidence of people trying to get into this system and it also means there aren’t as many people getting into SDA as quickly as they should and that leads to the 18,000 who have it and the 30,000 who should.”

Prior to the NDIS and SDA markets, housing and support for people with disabilities was a welfare model, while the NDIS invests in people with disabilities in a market-based system to maximize their independence and inclusion in the community and reduce long-term liability of the system.

In order to register an SDA property with the NDIA, SDA providers submit information about the design category, building type, number of bedrooms and location of the dwelling.

In terms of building type, apartments dominate the SDA landscape, but some jurisdictions are seeing growth in the pipeline of homes and other building types. In terms of SDA design categories, the supply of high physical support homes is strong in a number of jurisdictions. The pipeline of resilient homes is less developed.

Currently, two in five providers within the sector are private property developers, while one in five is non-profit providers of disability services.

▲ Issues hampering providers include long wait times for SDA funding decisions and eligibility uncertainty.

Rathbone said there is still significant room for improvement to achieve more streamlined and transparent SDA processes and communication with NDIS participants and SDA providers.

“There is definitely a need for more quality data in this sector to help identify people who are in the wrong places and get them funded and into the right housing faster. We can’t just rely on the government,” she said.

“There are currently more than 1,000 people with disabilities in hospitals who could be eligible for funding and thousands in residential aged care. We know who they are, people just need the right money for housing and support. This is within the control of the NDIS to approach quickly and efficiently.

“There’s a two-year lag time that we know it takes for a development to happen and people lose confidence and it’s about rebuilding that confidence in the market by getting people through it faster system and get into the right accommodation. ”

The recent change of government provided a renewed push for better SDA, with a recently launched pricing review to assess the impact of prices on supply and demand and set a new pricing guide to stimulate market investment over the next five years.

The results of the SDA price review will incorporate any early results of the broader NDIS review, which is designed to fulfill an elective commitment to improving the system, operations and sustainability. The price review will be implemented from July 2023.

Rathbone will deliver the opening keynote presentation at The Urban Developers Come SDA vSummit on Thursday, September 15th

The vSummit features more than 15 industry experts delivering engaging presentations, case studies and panel discussions covering the latest research and perspectives on the current state of the six-year-old sector and its prospects for the future.

To register for the event, click here.

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