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July 31, 2019

Where to next for SDA?

How can improvements to the Specialist Disability Accommodation (SDA) landscape be made to deliver high quality housing options for people with disability?

Steve Anthony knows firsthand the pitfalls of inappropriate housing for people with disability. The father of a young man with autism, Anthony is also pro bono CEO of Supporting Independent Living Co-operative (SILC), an organisation helping families of people with disability to develop independent housing models.

“Around 10 years ago, my son Patrick was put in a group home near Penrith. It didn’t really work because he had no idea where he was; it was 70 kms from us and where he had lived, and he couldn’t get to his day program,” Anthony says.

“It was supposed to be a temporary thing, but he was there for 18 months. While there, Patrick made his own way home, barefoot at night – twice.”

We’ve had one house in SILC, where the landlord has said your lease is up, you need to move… and the risk is, that can happen every year.

It was this experience which led Anthony to help found SILC. The organisation aims to help National Disability Insurance Scheme (NDIS) participants and their family members to form and operate small family-governed supported independent living (SIL) homes. Even so, Patrick is currently living with two other residents in a home leased on the private rental market and has no security of tenure.

“We’ve had one house in SILC, where the landlord has said your lease is up, you need to move. You wouldn’t want that to happen every year, and the risk is, that can happen every year,” Anthony says.

“The behaviours of the participants are likely to be much better if they’re in a stable environment and in a purpose-built environment.”

Patrick’s experience is not a one-off story. Appropriate, safe, long term and affordable housing for those with disability is at low levels in Australia. Much of the housing pre-NDIS was inadequate, badly maintained, badly located and very institutional in design; more like a hospital than a home.


When the NDIS was introduced in 2013, it marked the first time in Australian history that legislation mandated long term committed funding to provide support and services to Australians with significant disability. The NDIS is designed to give individuals choice and control over how they spend their funding. Individuals take part in a planning process which details and documents their needs and goals. Funding is then allocated in alignment with these goals. The National Disability Insurance Agency (NDIA), an independent agency, is responsible for implementing the NDIS.

One of the areas that the NDIS addresses is housing needs. This article will look at the Specialist Disability Accommodation (SDA) mechanism within the NDIS, which funds accommodation for people with specific, acute needs, and how effective this mechanism is at providing choice and control to the people it aims to support.

The housing need

We know that one critical contribution to the quality of a person’s life is their home. What does suitable housing look like?

Clearly, it needs to be designed and built around the needs of the residents.

With greater choice and control, people are seeking greater independence. They’re looking for different housing models.

Rob Watkins is Executive Director Support Services at Aruma, previously House with No Steps and The Tipping Foundation, and a disability service provider which works largely with people with intellectual disabilities. Aruma assists individuals with their daily life by providing support and care. This can be done in both a non-residential or a residential capacity. Its role is funded through the NDIS but separate to the amount allocated to SDA. Service providers such as Aruma are often referred to as SILs (supported independent living providers). (As the NDIS was designed to give participants choice, it is recommended that accommodation and SIL providers be different entities.)

“With greater choice and control, people are seeking greater independence. They’re looking for different housing models,” Watkins says.

“We need contemporary housing, that is modern in design, which provides areas of privacy for individuals – maybe their own living areas, bathroom and for some kitchenettes if they’re able to cook for themselves. And the housing needs to allow them to be supported by staff if needed.”

Homes should also be in areas with community supports, accessible to public transport with security of tenure.

“For our organisation, the homes would also need to be sustainable from an ecological perspective,” Watkins says.

To provide real choice to participants, in the spirit and purpose of the NDIS, housing supply also needs to be high quality and varied in design.

Why SDA?

To help deliver some of this much-needed supply, the NDIA committed to SDA. SDA refers to accommodation for people who require specialist housing solutions, including to assist with the delivery of supports that cater for their ‘extreme functional impairment or very high support needs’.1 Participants who are assessed as needing SDA as part of their reasonable and necessary supports will receive funding to cover the costs of SDA.

The NDIA estimated that some 6% of NDIS participants (28,000) will be eligible for SDA funding, although many in the sector believe this estimate is on the low side.2

To date the approval process has been slow, inconsistent and not particularly transparent. The eligibility criteria are not clear; Aruma for example is not able to predict which of its clients will be deemed SDA eligible.

What would be ideal for us is a mix of SDA and non-SDA eligible contemporary housing.

It is intended that the SDA will stimulate the market by catalysing the required parties: investors, developers, builders and service providers into delivering the homes for the estimated 28,000 people, equating to 6% of participants.3

This does not mean that other NDIS participants do not require suitable accommodation. Far from it. Many are in dire need of a suitable place to live but for those individual’s additional government funding is not available through the NDIS.

This is something which both complicates the situation and concerns SIL providers such as Aruma.

“What would be ideal for us is a mix of SDA and non-SDA eligible contemporary housing,” Watkins says.

“But there isn’t the return for developers in the non-SDA housing, so they’re not willing to enter into those arrangements.”

Current situation

Despite SDA payments being rolled out initially in 2016, the level of suitable disability housing in Australia is still woefully low.

To be ‘enrolled’ as SDA, homes have to meet certain standards set by the NDIS Quality and Safeguards Commission. These standards are specific to SDA design categories – basic, improved liveability, fully accessible, robust and high physical support (see Table 1 below). Buildings need to be approved prior to occupation and concurrently individuals must get SDA approved in their NDIS plans.

Table 1

SDA design categoryDefinition
BasicHousing without specialised design features but with other important SDA characteristics (e.g. location, privacy, shared supports).
Improved liveabilityHousing that has been designed to improve ‘liveability’ by incorporating a reasonable level of physical access and enhanced provision for people with sensory, intellectual or cognitive impairment
Fully accessibleHousing that has been designed to incorporate a high level of physical access provision for people with significant physical impairment
RobustHousing that has been designed to incorporate a high level of physical access provision and be very resilient, reducing the likelihood of reactive maintenance and reducing the risk to the participant and the community.
High physical supportHousing that has been designed to incorporate a high level of physical access provision for people with significant physical impairment and requiring very high levels of support.

[Source: NDIS Quality and Safeguards Commission – SDA Design Category Requirements Guidelines]

Lack of data

Based on available data from the NDIA we know that as at the end of March 2019, 12,356 individuals have SDA funding in their active NDIS plans.4 Furthermore, we know that 2,896 SDA dwellings have been enrolled throughout Australia by region and SDA design category. Even though these dwellings accommodate from one to six residents, there is still a significant gap between available SDA accommodation and individuals with the funding to live in those dwellings.

Critically, the data provided doesn’t give any details on the specifics of where the exact need is. We know where the SDA approved individuals currently live, but not what type of design category they require. The data also details where the different categories of SDA dwellings have been approved but not how that aligns with the participants, or demand.

To help with some of the deficiencies in supply data, the Summer Foundation, a disability sector advocate focused on better outcomes for young people in nursing homes, and SVA, jointly authored a report, SDA Supply in Australia.5 Released in March this year, the report provides more granular data on housing under development as well as more details on SDA shortfall by state. These insights are intended to flag to government and market intermediaries where more SDA supply is needed to catalyse supply into these areas.

Result of lack of data

This lack of knowledge results in investors, developers and builders making decisions based on limited information.

… there’s still a lot of information that needs to be shared before we can have a substantial impact providing to this sector.

Troy Gorton is Executive General Manager Strategy & Development, Simonds Homes [Simonds], a builder which has been looking into the SDA market and he says demand mapping is the biggest challenge.

“There’s lots of high level statistics around there being several thousand people needing accommodation, but no one can give you the answer as to where the specific demand is,” he says.

“There’s a lot of appetite to participate but there’s still a lot of information that needs to be shared before we can have a substantial impact providing to this sector.”

As a result, some investors and developers have taken the approach to ‘build it and they will come’ rather than taking a participant-led model, as the returns on some of the categories can be quite good.

With this approach, as with other housing models, developers build homes, and then on completion secure the tenants. Although this approach adds supply into the market, there is an inherent risk that the housing being built is not in the right location and at the correct specifications to meet individuals’ needs. The knock-on impact of this is long term vacancies, which developers and investors won’t have accounted for.

Short cuts will come back to bite investors in the medium to long term.

Speaking from an investor perspective, Matthew Tominc from The Impact Fund, has a warning.

“Investors should beware that some of the highest yielding investments on paper are not the most desirable for tenants – which is what SDA is aiming to build. This could jeopardise long term returns.”

His sentiments are echoed by Jacob Edwards, Impact Finance Manager at Bank Australia. “Short cuts will come back to bite investors in the medium to long term,” Edwards says.

“Where quality co-design, location, built form and community are present then participants will choose to remain. Partnering with the right groups [of builders, developers, SILs, etc] with a shared vision is critical to success.”

The NDIS and specifically the SDA is all about being more responsive to tenants. It would be a disaster if, after creating a user-directed system to privilege clients, the wrong type of dwellings are built in the wrong places.

We’d hoped that there’d be a pretty simple model we could roll out, but it’s more complicated given the various parties.

In the face of the data paucity, the other approach is for developers, builders and investors to work with the community housing providers and SILs who are already in contact with potential residents. This is one of the approaches that Gorton says Simonds has been exploring.

“The community housing providers know their tenants –their age, their disability, their social and support networks, and are able to take a very custom approach to housing provision. However, this can be quite expensive,” Gorton says.

“So, we’re looking at if we can standardise any of the elements, or if we can streamline procurement or the design process.

“We’d hoped that there’d be a pretty simple model we could roll out, but it’s more complicated given the various parties.”

Simonds has a partnership with Get Skilled Access, an organisation working for disability access and inclusion, to provide design and end user advice.

“We’re not talking to the end users directly, but we’re surrounding ourselves with people who have real life experience and credibility around design [for people with disability],” Gorton says.

Exploring the SDA market has also led the organisation to establish how many of its staff currently live with some level of disability and to develop a disability inclusion plan.

Awareness of SDA is limited

A much broader issue is the complexity of the NDIS and accessing SDA. A lot of people with disability and their families are not aware of SDA, including those that are well versed on the NDIS. This speaks to the complexity of the NDIS. It’s not easy to find information about SDA if you don’t know what you’re looking for.

Kim MacIntosh, a current resident of a Summer Housing apartment said when SDA was introduced in 2017, she had to wait until 2018 before it was incorporated into her NDIS plan.

“At the time, I only received a quarter of the funding that should have been given to me,” she says.

“It was not what we thought it would be and it was very daunting as I did not know what was going to happen. I thought I may have had to move back to the nursing home which is something I did not want.”

Finding the right accommodation

Being responsive to the needs of tenants is the very raison d’être of the NDIS.

SILs and community housing providers may be filling a need in matching demand to supply to some extent with their deeper understanding of existing clients and ability to provide direct links to potential tenants for investors and builders.

… some providers under severe financial strain may be motivated to fill vacancies quickly and short circuit some of those robust processes.

However, SILs like Aruma expend a lot of resources matching up people for group homes of two or more for example; activities that are not covered by NDIS. For people with intellectual disability matching the right tenants and the right location requires extra sensitivity and care, and can be a lengthy process.

With the cost of these functions carried by the SILs themselves and in an environment where organisations have had to move from block funding to NDIS funding, some SILs are under greater financial pressure.

“My fear is that some providers under severe financial strain may be motivated to fill vacancies quickly and short circuit some of those robust processes,” Watkins says.

“Which may lead to adverse outcomes.”

One solution to matching tenants to available housing is a platform like a approach which brings together people with SDA funding looking for housing and housing providers similar to Summer Foundation’s Housing Hub. This kind of model will work for some tenants but not all. Clearly it will not replace the sort of service organisations like Aruma provides by giving opportunities for people to try out potential homes. There needs to be a range of ways to access housing.

Pricing framework

The SDA pricing and payments framework sets out the payment applicable for the constructed SDA housing.6 It has different payment levels across design categories (described above) and housing types (e.g. apartment, villas, houses, and group homes), and for group homes, the different numbers of residents including the presence of onsite overnight assistance (or not) as applicable.

The framework has been designed to take into account land, construction and finance costs as well as ongoing maintenance and property management costs. The framework’s transparency enables investors to understand their investment’s revenue stream.

… the very broad ABS SA4 level doesn’t allow for appropriate granularity to adequately represent the highest cost locations.

However, the assumptions behind the framework need to be redesigned to really deliver a range of housing supply typologies across a range of locations to fully give individuals choice.

Currently the source of data for the median land values is the Australian Bureau of Statistics’ statistical area level 4 (SA4) used for the output of regional data. These are the largest sub-state regions and do not provide sufficient granularity to deliver the right pricing levels for particular areas.

Bank Australia’s Edwards says the very broad ABS SA4 level doesn’t allow for appropriate granularity to adequately represent the highest cost locations.

“By the same token, SDA payments for lower cost locations are inflated by neighbouring higher cost locations within the SA4, which increases the total cost of provision of the scheme. Adopting a more relevant source for location factors would achieve a more accurate cost of SDA provision in specific locations and would serve to better support investment across all locations.”

Additionally, Edwards suggests setting a uniform base price across all design categories could encourage development according to demand rather than profit.

“Other factors could then be relied upon to reflect cost fluctuations. These are, or could be, captured by other pricing assumption categories. This uniform pricing approach also serves to terminate the financial disincentive associated with enrolling multiple design categories within the same dwelling,” says Edwards.

COAG Reform Council actions

In an attempt to address some of the deficiencies in SDA, the Council of Australian Governments (COAG) Disability Reform Council announced a number of actions earlier this year around SDA.7 These actions included improving the planning process for participants, providing pricing certainty and market information for investors, and clearer design guidelines and incentives for innovation for SDA developers. Some of these actions were implemented immediately, with others due to be operationalised by July.

The sector has welcomed the announcements which provide more certainty around the future of SDA and reflect a strong commitment to its long term funding. Also, the actions themselves should certainly help address some of the problems. However, at this stage it is not clear whether specific actions will improve the system enough. For example, while there has been a commitment to provide market information for investors, to date, it is not explicit whether this would solve for the deficiencies highlighted above.


The premise and intentions behind SDA, and more broadly the NDIS, are good. However, in its current form it’s not fully delivering what it set out to do.

Wholesale changes aren’t required but some improvements could really make a difference in bridging the gap between disability housing supply and demand.

The lack of knowledge and understanding of the SDA landscape by those individuals and their families who may be able to access funding needs to be rectified. Additionally, broader knowledge of SDA for other stakeholders – investors and developers – can bring the right people into the sector to deliver the best outcomes. There is a bigger role for the NDIA to play here.

We understand from individuals who have to navigate the SDA approval process (for SDA to be put into their plans), more needs to be done to make this stressful and uncertain process more efficient and consistent. The NDIA is making improvements in this area, but there is room for more.

In terms of unlocking more appropriate supply, a lot comes down to a lack of appropriate data. More data detailing what different types of accommodation is needed, and where, is the first step to driving better outcomes for individuals. This also ties into the need for more detail in the assumptions driving the pricing framework to adequately and appropriately compensate investors (on a risk adjusted basis) as well as drive supply into the areas where it is needed.

This is by no means a comprehensive list of changes needed, but rather some improvements that would make a big difference.

They [people with disability] simply shouldn’t be confined to some of the poorest quality housing in Australia – and sadly, that is currently the case now.

We will know when SDA is finally working optimally when there is adequate housing supply across all categories and geographies. This may require more than the changes we’ve talked about. Regardless, we shouldn’t lose sight of the most important part of NDIS and SDA – the individuals.

As Watkins says: “The built environment has such an impact on the whole demeanour of people and their health, safety and wellbeing. Society has to do a lot better in the way people with disability are treated. They simply shouldn’t be confined to some of the poorest quality housing in Australia – and sadly, that is currently the case now.”

To find out more, contact Rebecca Thomas on


[1] NDIS website

[2] 2018 Specialist Disability Accommodation: Market Insights – Summer Foundation, AHURI & SGS Economics & Planning

[3] 2011 Productivity Commission Disability Care and Support report

[4] COAG Disability Reform Council, Quarterly Report, 31 March 2019 

[5] SDA Supply in Australia, Summer Foundation & SVA 2019

[6] SDA pricing and payments framework

[7] The Council provides a forum for member governments to discuss matters of mutual interest and progress key national reform in disability policy including the National Disability Insurance Scheme (NDIS).

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