Asset management

The Queensland Government commits several billion dollars annually for its Capital Program. The costs, benefits and risks of asset decisions are based on strategic management processes and the full life-cycle cost of assets. Assets created by the Queensland Government's Capital Program are recognised as a key resource in the delivery of its services and provide a stimulus for improving the productivity of the Queensland economy.

As at 31 March 2009, the Department of Housing owned property consisting of 65,042 dwellings, with an approximate value of over $13.55 billion. Strategic management of this portfolio ensured the development of accommodation solutions to assist those with greatest need, while maximising the value, life and condition of property assets. The department's strategic portfolio management process governed all activities related to managing building and land assets for optimal service outcomes, and ensures value for money for Government.

Managing the construction, acquisition and disposal of assets to ensure value for money

The department's rolling three-year new construction and acquisition programs were influenced by demand, existing availability of social housing, population growth, and availability of suitable land for construction of housing. These programs increased the mix of dwelling types in the portfolio and allowed a better match to the changing demographics of the Queensland housing market. In recent years, the department has strategically weighted its capital works programs towards one and two-bedroom dwellings, which has enabled the department to respond to high client demand for smaller accommodation types and also maximise its return on capital expenditure.

Between 1 July 2008 and 31 March 2009, the department completed construction of 331 dwellings and purchased 187 existing dwellings, adding 518 social housing dwellings to the department's portfolio. The department also commenced construction of 245 dwellings and purchased land to facilitate the future construction of approximately 274 dwellings.

The department also purchased surplus Government land which would be suitable for housing development. By conditioning the sale of this land to private developers for the inclusion of social housing and other affordable private homes, the supply of affordable and appropriate housing will increase. Between 1 July 2008 and 31 March 2009, the department purchased a 17 hectare land parcel at Gladstone at a cost of $6.1 million which, when offered to the market for sale, will be conditional on developers providing 17 sites for social housing and 17 sites for first homebuyers. The criteria established by the department for first home buyers included a household income of less than $90,000 and not more than 30% of income being used for mortgage repayments.

The department strategically disposed of assets to:

• assist tenants into home ownership. Between 1 July 2008 and 31 March 2009, 51 households were assisted through the Sales to Tenants program
• provide redevelopment opportunities. The removal or demolition of adjoining detached houses provided opportunities to construct multi-unit dwelling complexes. This results in a greater number of clients assisted and utilises the equity held in land holdings
• minimise the future financial burden of properties in poor condition.

Property disposal, through sales, demolition or house removal is a critical component of responsible portfolio management and helps to align the portfolio with demand and improve integration of social housing within communities. However, the department recognised the increased demand for social housing and kept the disposal of properties to a minimum.

Preserving the value and extending the remaining useful life of the social housing portfolio

The department's assets were maintained to ensure they supported the policy objectives and service delivery requirements of the department, and to ensure that Government investment in the dwelling portfolio was managed prudently. This involved the assessment of the maintenance needs of the portfolio over the immediate, medium and long-term, and responding to identified maintenance requirements.

In addition to routine planned and responsive maintenance, specific maintenance programs were undertaken when a need was identified. Examples of specific maintenance programs include water efficiency improvements in areas subject to water restrictions and repairs and maintenance programs developed in response to the Federal Government's Nation Building and Jobs Plan (Economic Stimulus Package).

The department ensured dwellings were maintained to an acceptable and appropriate standard through a targeted maintenance program, at a cost of $108.35 million from 1 July 2008 to 31 March 2009. Over this period, the department also invested $57.81 million in the upgrade and refurbishment of properties to improve dwelling amenity and functionality, and to address tenants' health and safety issues.

Ensuring a consistently high standard of asset management across all social housing

The department's asset strategies were guided by the service delivery objectives outlined in the department's Strategic Plan, the Housing Act 2003, the Commonwealth State Housing Agreement (ceased 31 December 2008), and its replacement from 1 January 2009, the National Affordable Housing Agreement (NAHA). These strategies also supported efficient and cost-effective management and provided best value for money to Government.

To ensure all social housing was maintained to an appropriate and consistent standard, the department developed an Asset Management Framework to build the property management capabilities of registered providers. Once implemented, property condition appraisals will commence for non-department owned properties for community housing registered providers. The data gathered from the inspections will be beneficial to providers for their development of Asset Management Plans, which are required under the Housing Regulation 2003.

The department has maintenance arrangements with QBuild and local Indigenous Councils for tenants of the 34 Indigenous communities to request responsive maintenance through a dedicated free-call telephone line linked directly to the department's Call Centre. The department also continued to review and update design and construction standards for remote Indigenous housing to ensure the standard of housing in remote communities is comparable to social housing in other locations.

Identifying and tapping into opportunities to re-shape the social housing portfolio

Within the social housing asset portfolio, there are properties which can be redeveloped into more appropriate housing using equity held in land assets. From 1 July 2008 to 31 March 2009, the department identified many redevelopment opportunities in the greater Brisbane area which would make use of existing assets (dwellings and vacant land) to secure larger parcels of vacant land for the construction of new dwellings. For example, the department earmarked redevelopment sites in Acacia Ridge, Carina, Geebung, Morningside, Mt Gravatt East, Stafford, Stafford Heights, and Zillmere which will be used in future construction of over 90 medium-density units of accommodation.

In addition, the department continued to undertake land consideration projects which provide additional social housing to optimise outcomes for clients in exchange for making departmental land available for private sector development. From 1 July 2008 to 31 March 2009, the department completed one land consideration project involving the sale of land at Carina in exchange for the construction of eight two-bedroom departmental units at Holland Park. Further, the department signed an agreement involving the sale of a portion of an amalgamated block of land at Stafford in exchange for eight one-bedroom departmental units being built on that site as part of a larger private development.

The department continued to work closely with the Brisbane City Council to secure additional redevelopment opportunities through local and neighbourhood planning, particularly in the Coopers Plains, Stafford, and Murarrie areas. In addition, a submission was forwarded to the Brisbane City Council to support the inclusion of Keperra into the Mitchelton Neighbourhood Plan, with a view to "upzoning" around major transport infrastructure.

Revised town planning for these suburbs will allow redevelopment of sites while improving social diversity and optimising client outcomes through private sector developments. Properties will continue to be identified where the Department of Communities is able to redevelop and realign existing properties to provide more appropriate housing for clients.

Measuring our performance

Appropriate utilisation of dwellings

To ensure effective use of resources, the department measures overcrowding rates across its social rental portfolio.