Is aged care affordable housing? Arcare says yes
- Fast-track approval: 133-bed Melbourne aged care home approved
- Affordable housing: Low-means residents support planning pathway
- Growth pipeline: Arcare expands with new sites and projects
- Contrasting headlines: Expansion continues amid class action allegations
Arcare has secured fast-tracked approval for a new Melbourne aged care home after arguing residential aged care qualifies as affordable housing.
Arcare Aged Care, a subsidiary of family-owned builder Knowles Group, has received approval to build a 133-bed, three-storey aged care home at 724-728 Whitehouse Road, Mitcham, 20km east of Melbourne’s CBD.
The approval was granted on 24 June, just three months after the application was lodged under Victoria’s Development Facilitation Program.
Affordable housing argument
To access the planning pathway, Arcare argued that providing residential aged care accommodation for supported residents satisfies the affordable housing requirement.
In its submission to the Victorian Department of Transport and Planning, the provider said it would “cement its commitment” to accommodating low-means residents and was prepared to enter into a legally binding Section 173 Agreement with the Victorian Department of Health. Such agreements are recorded on a property’s title and bind current and future owners to the agreed conditions.
“It is possible to compare the definition of a Low Means Resident in a RACF to a person who is eligible for Affordable Housing under the Victorian Planning Scheme,” the submission stated.
“The resulting effect is that by default, if Arcare were to be successful in obtaining a permit to, and subsequently developing Arcare Mitcham, it would be providing accommodation to Low Means Residents, thereby satisfying the requirements of this clause to provide ‘affordable housing’.”
The submission argues that because residential aged care providers are already required under Commonwealth legislation to make a proportion of places available to supported residents, those places meet the intent of Victoria’s affordable housing requirements.
More than a one-off development
Arcare also highlighted the ongoing turnover of residential aged care beds as part of its submission.
Once the Mitcham home reaches full occupancy, the provider expects about 66 beds to become available each year as residents leave the home.
Each time a place becomes available, Arcare said it would continue meeting its legislative obligations to accommodate supported residents, ensuring the affordable housing commitment continued beyond the home’s initial occupancy.
An Estimated Development Cost Report prepared by WT Partnership estimated the Mitcham project would cost more than $50 million to build, equating to more than $375,000 per bed.
Arcare currently operates more than 60 aged care homes and has an estimated 20 in its development pipeline.
Separately, the provider has acquired a 1.65-hectare site in Greenvale, about 20 kilometres north of Melbourne’s CBD, for a reported $9.1 million, continuing its expansion across Victoria.
Recent scrutiny
Arcare has also been the subject of recent public scrutiny following the launch of a class action by global law firm Quinn Emanual Urquart & Sullivan.
The proceeding alleges residents were required to accept Arcare’s Signature Package – a bundle of additional services carrying a daily fee – as a condition of entry to its homes.
The allegations were also featured in Nine’s 60 Minutes program ‘Age of Greed’, which aired on 5 July.
