DHA's Defence portfolio

Overview

DHA continues to improve the quality and diversity of housing available to Defence members and their families. Stock is refreshed as properties leave the portfolio at end-of-lease. While this places demands on the capital program it ensures houses remain consistent with community standards. DHA also acquires land and houses that are well-located with respect to Defence bases and establishments. On both accounts (quality and location), success is measured by member satisfaction with DHA provided housing, which remains high.

While most of the Defence portfolio is detached housing, it also includes townhouses, courtyard style houses and apartments. These housing types are suited to members who prefer well-located inner suburbs. Within limits set by Defence, a small number of apartments with shared recreational amenities and undercover parking are also available. These dwellings are not a ‘suitable offer’ but can be chosen by Defence members and, therefore, are known as ‘choice housing’.

In an important development, Defence and DHA have agreed to trial the use of approximately 100 inner-city apartments in Sydney as a ‘suitable offer’ for certain types of family composition. These dwellings must have met a minimum standard agreed with Defence. If a policy change ensues, the choice element in the allocation of these houses would be removed.²

Housing in the Defence portfolio is classified for provisioning and allocation purposes. This enables Defence members to obtain accommodation in accordance with their rank and family composition entitlement. Since 1 July 2007, the system of housing classification has been based on market rents with properties assigned to rent bands by region. These are determined by Defence, in consultation with DHA, and updated annually. The system enables location to be factored into classification.

On-base housing

The Defence portfolio includes around 1,400 Defence-owned houses located on Defence bases and establishments around the country, 40% of which are in the Northern Territory. These houses are owned by Defence or financed by DHA under annuity arrangements. Defence pays fees to cover the cost of management and maintenance with special arrangements in place to cover 61 houses on the Defence Heritage Register. Approximately 380 dwellings that are no longer used for Defence housing are assigned to separate management arrangements. Of these, 277 are on RAAF Base Darwin. They have been sold and are being progressively removed from the base.

In 2012–13, DHA continued work on the upgrade and replacement of Defence-owned houses as part of a $360.0 million program to ensure this stock meets minimum Defence standards by 2017. The lead project was the replacement of 61 houses on Larrakeyah Barracks in Darwin. Approved by the PWC in March 2011 at a revised cost of $63.8 million, the project was completed during 2012–13. In total, 98 new houses were constructed and are now occupied by Defence families. A new project on Larrakeyah Barracks will result in major upgrades to 48 existing houses.

Work continues on a project to upgrade 193 houses on RAAF Base Tindal in the Northern Territory. The PWC-approved upgrades will ensure houses meet the Defence minimum standard and secure their viability as on-base housing for the next 15 years. The first package of 62 houses was completed in May 2013 and work on the second package of 68 houses started in June. In addition, the first of 85 houses being upgraded on-base HMAS Cerberus on the Mornington Peninsula was completed. Work continues on upgrades of on-base housing at Puckapunyal in Victoria, Kapooka Village and RAAF Base Richmond in New South Wales and on 65 remote residences in Western Australia and North Queensland.

Heritage housing

DHA manages and maintains 61 heritage properties across the Defence estate under arrangements set out in the Services Agreement. These properties are at the Royal Military College, Duntroon; HMAS Creswell, Jervis Bay; Garden Island and HMAS Watson, Sydney Harbour; HMAS Cerberus, Mornington Peninsula; Anglesea Barracks, Hobart; and Victoria Barracks, Sydney. Since the completion of a major upgrade program in 2010, DHA continues to undertake minor upgrades as required. In 2012–13, DHA managed a series of minor upgrades on heritage houses including new kitchens, bathrooms and laundries at HMAS Watson and new fences for properties on Garden Island.

Sustainable housing

DHA focuses on five key sustainability areas; energy consumption, water consumption, effective waste management, human wellbeing and the biodiversity of local flora and fauna.

DHA ensures all newly constructed developments comply with environmental laws and standards. DHA’s new constructions incorporate environmental sustainability improvements including reduced energy consumption, reduction in potable water use through AAA rated fixtures and fittings and biodiversity in landscape. All DHA houses tendered since 1 July 2010 comply with the requirement for a six star energy rating. Water tanks are provided in accordance with State and Territory Government requirements.

During 2012–13, DHA agreed to extend its involvement in the Residential Building Energy Efficiency Study for another year. DHA is collaborating with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to assess the efficiency of energy usage in approximately 80 DHA-managed houses in Brisbane, Melbourne and Adelaide. This study is part of a larger project, commissioned by the Department of Resources, Energy and Tourism, to investigate the thermal efficiency of house design and tenant energy consumption patterns. On conclusion of data collection at the end of the first year, CSIRO honoured its commitment to donate $100 to Legacy for each Defence tenant remaining in the study. This amounted to a donation of $7,200.

The principles of sustainable development have been incorporated into DHA’s decision making systems and processes as required under the Environmental Protection and Biodiversity Conservation Act 1999.

Portfolio management

DHA’s housing portfolio is managed over a full life-cycle from establishment of the housing requirement with Defence, to exit from the portfolio when leases expire or properties are no longer required for Defence families. DHA maintains ownership of some properties to meet prudential requirements and uses financial benchmarks to determine the makeup of this part of the total portfolio. DHA also selects properties for its SLB program with the sale proceeds being the largest source of capital for financing its business. DHA works closely with investors to manage their properties through the leasing cycle, from purchase, lease extensions/renewal to the return of properties at lease end.

Satisfied tenants

DHA’s annual tenant survey measures Defence member satisfaction with their current DHA-managed property. In 2012–13, 88% of 3,172 respondents were satisfied with their current accommodation. This result is statistically similar to the result for 2011–12. In past years, sample sizes have ranged from 2,342 to 4,431.

Figure 2: Defence member satisfaction with current DHA housing, 2008–09 to 2012–13 Properties acquired by construction, acquisition or direct leases must satisfy Defence criteria in terms of the quality and level of amenity, inclusions and fittings. Examples include security, heating, cooling and covered outdoor areas. Satisfaction of Defence members living in these dwellings has been consistently high. In 2012–13, from a sample of 65 Defence families, satisfaction with newly constructed homes was 92%. In the same survey, from a sample of 72 Defence families, satisfaction with newly acquired homes was 86%.

Total stock under management

In addition to housing stock supplied to meet Defence requirements for Defence families, DHA holds apartments for Defence singles (currently in Darwin, Brisbane and Canberra), some houses pending disposal and small portfolios for Customs and AMSA. The total DHA portfolio is summarised in the table below.

Table 1: DHA housing portfolio 2012–13

Footnotes

2 DHA-managed housing in the right posting locality that meets the minimum standard set by Defence is regarded under Defence policy as a ‘suitable offer’ or an ‘allowable supply’, in terms of meeting the Defence obligation to provide subsidised housing for Defence members.↑