Representatives from the Summer Foundation and investment industry leaders – all members of a recently established Specialist Disability Accommodation (SDA) Investor Think Tank – have welcomed the Federal Government’s supportive response to their collective views about the future of the Specialist Disability Accommodation (SDA) market.
A group of investment fund managers, philanthropic investors and supporting organisations met with the Minister for the National Disability Insurance Scheme (NDIS), Linda Reynolds, and National Disability Insurance Agency (NDIA) representatives as part of Minister Reynolds’ SDA Roundtable last Friday to discuss what needs to be done to drive the next phase of the SDA market’s development.
Minister Reynolds described the Think Tank report as a “great piece of work” with sensible recommendations. After reviewing and discussing the report at the Roundtable, Minister Reynolds outlined a plan to get further input prior to getting endorsement to implement solutions.
The Summer Foundation appreciates Minister Reynolds’ commitment to listening and working with Think Tank members and SDA Roundtable to develop and implement joint solutions.
SDA is the most significant impact investment opportunity in Australia today and represents a solution to a disability accommodation problem the government cannot solve on its own. However, the rapid growth of the SDA market has outstripped the evolution of government infrastructure causing some instability in the market.
The Summer Foundation established the SDA Investor Think Tank in mid 2021, in collaboration with a group of investment fund managers, to consider how the market could best be supported through the next growth stage. This work built on the SDA Explainer for Investors which included a survey of investors.
The SDA Think Tank, which includes investment fund managers, who have collectively invested nearly $650 million in the SDA market produced the Specialist Disability Accommodation (SDA) Investor Think Tank Findings and Recommendations report which identifies issues and opportunities that require collective attention to help achieve market maturity.
Recommendations outlined in the report centre around improving market engagement and signalling as well as optimising the demand and supply pipeline.
Think Tank contributors hope the findings and recommendations in the report will support NDIA stewardship of the SDA market, provide a platform for collaboration and help build confidence among market players.
The meeting comes at a time when the sustainability of the NDIS is the focus of conversation. requiring review by the government as rising costs are placing significant pressure on the Scheme. The SDA market has the potential to leverage $5-$12 billion of private capital to address the unmet demand for housing and the redevelopment of old stock that is reaching the end of its useful life. An estimated two thirds of disability housing stock built before 2016 needs to be rebuilt or completely refurbished because it does not meet contemporary standards.
SDA funding is intended for 28,000 NDIS participants, up to 30,000 by 2025, with extreme functional impairment for whom mainstream housing is not an option. It is anticipated an additional 12,000 SDA homes will be required in the near future.
The commitment to working towards a sophisticated SDA market is welcome news for NDIS participants who qualify for SDA funding and those waiting to have their applications considered. Emerging evidence from research by the Summer Foundation and La Trobe University has found significant improvements in wellbeing and community participation for people living in SDA.
The commitment from Minister Reynolds also reaffirms that effective collaboration is essential in an emerging market in order to meet the needs of the government, the NDIA, participants, providers and investors. Everyone benefits if the SDA market reaches its full potential – participants access appropriate housing, investors and providers are able to offer housing which enables positive outcomes, and the government leverages private capital that helps to achieve NDIS sustainability.
You can access the full Specialist Disability Accommodation (SDA) Investor Think Tank Findings and Recommendations report below.
A shortened version of the recommendations outlined in the report are provided below:
SDA Investor Think Tank Recommendations
Think Tank members are hopeful that the findings and recommendations in the SDA Investor Think Tank Findings and Recommendations report will support NDIA stewardship of the SDA market, provide a platform for collaboration, and help build confidence among market players.
Members have recommended that the NDIA should take the following actions:
1. Work with SDA stakeholders to develop a Stakeholder Engagement Framework that articulates a platform for open communication.
2. Make a senior appointment with primary responsibility for SDA market stewardship, which would be the key point of engagement between the Agency and market players.
3. Release a quarterly SDA Market Statement to provide guidance that supports informed decision-making by market players.
4. Develop the capability and systems needed to routinely release detailed and timely demand data that includes:
- A forecast of the total expected demand for SDA, including design categories
- The number of participants seeking SDA determinations and what types of SDA match their needs
- Assumptions behind the modelling for the annual budget for SDA
5. Undertake a demand activation campaign to support awareness among SDA-eligible participants, including by:
- Identifying SDA-eligible people on the NDIS database
- Contacting SDA-eligible people and providing capacity building on housing options so participants can outline their housing needs and preferences
6. Implement a plan to eliminate the backlog of decisions under review and appeals. Resolving this issue will lead to a decrease in financial pressures for some SDA providers, and increased market confidence.
7. Increase the transparency and consistency of SDA eligibility determinations by:
- Publishing plain language guides on SDA eligibility
- Defining the decision-making processes for SDA and associated supports, including details of decision-makers and timeframes
- Committing to decision timeframes and releasing performance reports on adherence to timeframes
8. Commission an independent review of the costs of SDA and associated supports to ensure assumptions about relationships between Supported Independent Living (SIL) and SDA are evidence-based.