SDA Housing FAQ: Key Insights About SDA Apartments, OA, Inquiries, and Many More

Here we have a comprehensive SDA housing FAQ that covers many topics on SDA in general like SDA apartments, On-Site Assistance, SDA housing inquiries, and much more. 

This guide answers common questions about SDA (Specialist Disability Accommodation) funding, housing types, and more in the NDIS (National Disability Insurance Scheme) space. Whether you're an investor, developer, or SDA provider, you'll find valuable insights to help navigate this ever-evolving sector.

What Are the Advantages of Apartments Compared to Houses in SDA?

Apartments often have a lower entry point compared to houses, making them an attractive option for investors. Additionally, they tend to cater to single-occupant tenants, which simplifies tenancy management. Apartments also offer a more affordable construction cost in comparison to houses, with a typical price range of $800K to $1M per apartment versus $1.5-$1.8M for a house in cities like Sydney.

Why Do Apartments Have Higher SDA Income Compared to Houses?

The SDA funding for apartments is typically higher because the cost of building an apartment is substantial, yet it houses only one participant. This means that the return on investment (ROI) must reflect these higher construction costs. In contrast, houses may accommodate multiple tenants, leading to lower per-tenant funding.

How Can We Identify Genuine Inquiries for SDA Housing?

When screening inquiries, always ask about the participant's funding level and requirements. If an inquiry cannot provide this information or fails to be transparent, it may not be a serious request. Genuine inquiries will typically have a clear understanding of the participant's funding and housing needs.

Can SDA Providers Enter Early Agreements Once Development Approval Is Granted?

It is unlikely that SDA providers will enter into agreements before construction begins. SDA providers generally prefer to wait until the development is closer to completion to ensure that the property aligns with market needs and participant requirements. Building a strong relationship with a provider is crucial for securing tenants once construction is complete.

Will SDA Funding for Apartments Decrease in the Future?

While SDA funding levels have fluctuated in recent years, significant decreases in apartment funding are unlikely. The government reviewed SDA funding in 2023, and while some reductions were seen for apartments, it was mainly a correction. Future changes will likely reflect construction costs and market trends, but it's not expected to drastically change again.

Does an Overnight Onsite Assistance (OOA) Room Need to Be Present in an Apartment?

In SDA apartments, the OOA is a separate unit rather than a room within an individual apartment, and is typically referred to as OSS (Onsite Shared Support). This OOA apartment is designated for the care team and operates around the clock to assist residents as needed. Unlike houses where OOA refers to a room within the dwelling, apartments use the OOA as a physical office for the care team to manage multiple tenants. For the OOA funding to be claimed through a tenants SDA apartment funding, the apartment complex must have at least one OOA apartment for every 10 SDA apartments.

How Do You Know If Your SDA Property Will Be Oversupplied in the Future?

To determine whether your property is at risk of oversupply, it is essential to conduct SDA market research. You can examine public reports on SDA supply and demand, monitor new developments in the area, and consult with local SDA providers to assess future market trends.

Is There a Difference Between Carers and the OOA Room in SDA Properties?

Yes, carer staff are the individuals who provide hands-on support to the residents, while the OOA (Overnight Onsite Assistance) is simply a room where carers work from within the complex. The OOA room acts as a base for the support team, but it is not a person-based service like carers.

Can SDA Funding Be Adjusted Based on Changes in the Location Factor?

Location factors can change during the NDIA’s periodic reviews. However, these changes apply to new properties built or enrolled after the update. Existing properties are grandfathered in and will continue to receive funding based on the location factor at the time of enrollment, with annual increases applied by CPI (Consumer Price Index).

What Is the Vacancy Rate in SDA Properties?

The average vacancy rate for SDA properties can vary significantly depending on the location and the supply-demand dynamic. In some oversupplied areas, vacancies can be as high as 15%. However, the rate of vacancies is typically based on the number of available participant rooms, or places, rather than the entire property.

Does Location Impact SDA Funding?

Yes, location is a significant factor in determining SDA funding. The funding guidelines include location factors that adjust funding levels depending on whether the property is in a rural or urban area, with urban areas potentially having higher funding. Areas like Sydney's eastern suburbs may have a location factor as high as 1.9, while rural areas may see lower factors.

Will the Improved Livability (IL) Category Be Phased Out?

There are ongoing discussions about phasing out the IL category. As of now, it appears that the NDIA is no longer approving new IL funding and is pushing participants to more advanced funding categories such as FA (Fully Accessible) or Robust. However, existing IL properties are grandfathered into the system, meaning they will continue receiving funding.

How is SDA Funding Changing for Participants and Care Providers?

In the past, there was a higher proportion of one-on-one funding for participants. However, with changes in policy, the NDIA is increasingly favouring shared funding arrangements. Investors and providers must be prepared for changes in funding, with some participants receiving shared funding rather than one-on-one.

What Support Is Available from the Government for SDA Investors?

The government does not offer grants or financial support for SDA investments upfront. Financial assistance, in the form of SDA funding, is available only once tenants are in place and funding is being received. Investors should focus on building properties that meet NDIS criteria and attract suitable tenants to receive SDA funding.

Where Can I Find a List of Oversupplied SDA Areas?

You can access reports and resources that provide insights into oversupplied and undersupplied areas. Our website hosts a detailed over/under-supply report that covers various regions across Australia, helping investors and developers understand the current landscape.

Can We Build an SDA House for Three Residents and Register It for Only Two Residents?

Yes, it is possible to build a property for three residents and register it for fewer residents, such as two. The SDA provider can enroll the property at a lower resident level if needed. However, the specific requirements will depend on the tenant's needs and how the property fits the SDA guidelines.

How Do We Know the Percentage of One-to-One, One-to-Two, or One-to-Three Funding for SDA Properties?

Currently, there is no publicly available data on the exact percentage of funding breakdowns by participants. However, providers and developers can get a sense of funding distributions through SDA providers and their data insights.

Can a Duplex Be Split Into Separate SDA Properties for Different Providers?

Yes, a duplex can be split into two separate SDA properties, each with its own service provider. Each side can be enrolled individually based on participant needs, providing flexibility for the providers and increasing market reach.

If Two Participants Are Funded Differently, How Does That Affect the Total SDA Funding for a Property?

If you have two participants in a house, one funded for HPS (High Physical Support) and the other for IL (Improved Livability), the total funding would combine the amounts for both participants. However, the total funding will depend on the house's enrollment level and the specific funding arrangements for each participant.

How Can We Find Out Which Areas and Types of Dwellings Are Most in Demand?

There is no centralised public database showing the most in-demand areas. However, providers and developers can leverage resources such as reports from the NDIS or SDA advisory service to determine demand. Regularly checking local market trends, such as existing property supply and vacancy rates, is also recommended.

The market for SDA housing is complex but it is growing, and staying updated with industry trends and regulations will help you succeed in this sector. With the right knowledge and resources, investors and providers can make informed decisions.  For further guidance and to explore investment options, reach out to NDIS Property Australia. We’re here to support you in making the most of your SDA housing investments.

Looking for More Information?

Investing in SDA housing is a smart move for those seeking positive cash flow and tax benefits. If you’re ready to explore this streamlined approach, SDA Advisory is here to help.

Visit our SDA Advisory website to learn more, or contact us directly to discuss your options with our experts.