Thousands more social and affordable homes will be built after the Labor government struck a deal with the Greens to pass the $10 billion Housing Australia Future Fund.
The bill, which was held up by the Greens as lacking ambition and action on rental caps, is expected to pass parliament this week.
As part of the new deal, the government agreed to invest an extra $1 billion in the National Housing Infrastructure Facility.
Housing Minister Julie Collins said turning around challenges in the sector required long-term reform.
“It has always been for people – people who are waiting for social and affordable homes across this country,” she told parliament on Monday.
The earnings from the fund will generate 30,000 social and affordable rental homes over five years.
Greens leader Adam Bandt said the $1 billion in extra spending for the infrastructure facility came on top of $2 billion previously promised by the government to pass the bill.
“That is $3 billion for public and community housing that the government initially said they could not find,” Mr Bandt said.
Treasurer Jim Chalmers said building more homes and increasing the supply of affordable housing would put downward pressure on inflation.
“This is another way we are addressing the serious cost of living pressures people are facing,” he said.
The Greens say they will not give up their fight for rent caps and a national rent freeze.
“There is legislation still to come during the course of this parliament,” Mr Bandt said.
“The Greens are in the balance of power and … we’ve just learnt from the course of this year, a strong community campaign where renters find their voice gets results.”
Master Builders Australia CEO Denita Wawn thanked the Greens and senators Jacqui Lambie, Tammy Tyrrell and David Pocock for guaranteeing the passage of the bill.
“Passing this legislation is imperative to delivering the National Housing Accord target of 1.2 million new, well-located homes in the next five years,” she said.
Property Council chief Mike Zorbas said it was time to improve state planning systems to deal with the welcome influx of skilled migrants and students.
“A wealthy, land-rich nation like Australia should not have a housing deficit,” Mr Zorbas said.
Opposition housing spokesman Michael Sukkar said the infrastructure facility, rather than a new fund, was the best way to make investments in housing.
“The coalition will not be supporting the establishment of the HAFF, which is merely $10 billion in additional commonwealth government borrowing that cannot guarantee and will not deliver a single home before the next election,” he said.
Earnings from the fund will go to crisis housing for women and children leaving domestic violence, improving housing in Indigenous communities, specialist services for veterans and frontline worker accommodation.
Earlier on Monday, independent MP Helen Haines introduced a bill aimed at “unlocking” social and affordable housing in rural and regional areas.
The bill would amend the National Housing Finance and Investment Corporation Act to ensure at least 30 per cent of funding goes to regional, rural and remote areas.
“With almost 30 per cent of the population living outside major cities, regional Australians deserve their fair share of housing funding,” she told parliament.