Complaints spark government review of multibillion-dollar housing scheme

The Turnbull government will launch an independent inquiry into allegations of rorts and misconduct plaguing a multibillion-dollar federal scheme designed to help house the poor.

Social Services Minister Christian Porter will announce the review of the National Rental Affordability Scheme on Thursday, following a string of complaints against housing providers.

Under the $3.2 billion Rudd government scheme, investors purchase new property and rent it out to low-income earners for 20 per cent less than market rates, in return for an annual $11,000 government subsidy.

But since its launch in 2008 the scheme has faced persistent criticism that it has failed to meets targets and has been hijacked to build student housing for wealthy foreign students.

More recently it’s been hit with claims that providers have been leaving investors – many of them mum and dad investors – in the lurch by delaying payments for up to a year.

There have also been allegations of so-called “third line forcing”, when providers withhold payments until investors agree to use the services of particular third parties, such as property managers.

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