Hundreds of homes for people with disability sit empty at the expense of NDIS participants and investors

At first glance, driving through the new estates on Melbourne’s western fringe, the houses look ordinary.

Single-storey, brick veneer frontages, finished in a grey monochrome.

But look closer and the differences are clear: step-free entrances, extra-wide doorways, and bathrooms designed for wheelchairs.

These homes were purpose-built for people with profound disabilities.

Dozens of these buildings are scattered through these neighbourhoods, part of a federal government scheme designed to get people with a disability out of group homes.

But Four Corners can reveal that more than 1,000 of these properties sit vacant around the country, jeopardising significant private investment.

‘A good investment’ turned sour

Like thousands of people around Australia, Tony Wilson and his wife were drawn to Specialist Disability Accommodation (SDA) when they were looking for somewhere to invest.

The NSW Central Coast couple got in touch with a financial advisor, who told them there was “high demand” and strong returns for these properties.

“It sounded like a good investment to us, an ethical investment, which was something we were interested in, the idea of providing a property to someone in need,” Tony told Four Corners.

The idea behind the investment is indeed legitimate.

In 2016, the federal government created SDA to get people with profound disability out of institutions like group homes and aged care facilities.

Under the scheme, the government asked private investors to build smaller-scale, customised houses.

In return, the government would pay investors up to around $110,000 per year for each eligible person who moved in.

Tony Wilson and his wife spent almost $2 million building two disability houses — one in Melbourne’s outer suburbs and one in Perth — expecting to see rental returns of more than $150,000 per year.

But there was a problem. Despite their financial advisor’s optimism, no one wanted to move in.

The Wilsons turned to multiple disability providers and consultants to fill the houses, but more than a year later, they still haven’t found any SDA-eligible tenants.

To fund the SDA houses, they borrowed against their family home and spent a large part of their superannuation. They are now struggling to keep up with mortgage repayments without the advertised six-figure rental income.

Mr Wilson said they were skipping meals and medication to help make ends meet.

“My wife’s had to go back to work after a long period where she’s been at home looking after elderly and unwell parents … but we’re still not making it,” he said.

“We’ve both had breakdowns as a result of it.

If they sell their SDA houses, they will lose hundreds of thousands of dollars on what they paid because there is now a glut of disability houses in the areas.

The Wilsons think they have no choice but to sell their family home to pay back what they have borrowed.

“We’ve still got kids at home,” Mr Wilson said.

“It’s a nice place to retire … would have been, but doesn’t look like that’s going to be the case.”

Location frustration

There are investors like the Wilsons all over Australia, who have built or bought disability homes where they are not needed, often under the guidance of property or investment advisors.

Property investment advisor Goro Gupta said part of the problem was that the NDIA — the agency that administers the policy — has not released clear data about where eligible people with a disability want to live.

That has meant many SDA houses have been constructed on the outskirts of capital and regional cities where the land is cheap.

“That’s why, of course, the average investor wants to invest,” Mr Gupta said.

At one estate in outer western Melbourne, he was incredulous that so many houses for people with profound disabilities have been built.

“In these areas, there’s a lack of amenities,” he said.

“It’s not close to shops, it’s not close to the allied health services that people with disabilities need on a day-to-day basis.

“I mean, have a look at this area. It’s paddocks!”

For some investors who have overextended to build the homes, renting them out as a normal property isn’t an option, because the returns are nowhere near enough to cover their mortgage repayments.

That means the homes are sitting empty in the hope that an eligible disability client will move in.

The true scale of oversupply

The agency in charge of administering disability housing does not have a clear picture of how many homes are unoccupied.

Four Corners has found that some streets in Melbourne’s outer west have more than half a dozen houses that are empty. And in one location, there were more than 10.

The ABC’s analysis of the little data available showed that across Australia, there were at least 760 vacant SDA properties, out of 7,500 that have been built.

But the peak body that represents almost half of the SDA market in Australia told Four Corners that the number of empty homes would likely be significantly greater.

“I would argue that there’s well in excess of a thousand empty homes across Australia at the moment,” said Jeramy Hope, the CEO of SDA Alliance.

That means close to 15 per cent of disability housing built in Australia, at the cost of hundreds of millions of dollars, is not being used for its intended purpose.

There is now a glut of vacancies in cities around Australia, including Melbourne, Adelaide, Brisbane, Sydney, Townsville and Toowoomba.

And the oversupply could get even worse.

NDIA data showed there were more than 800 disability houses under construction in Melbourne’s west, where there were already dozens of empty homes.

“The intent of SDA was … that there was meant to be some maturity of the investors, the builders, the providers to have those conversations with participants and support providers around where people wanted to live,” Mr Hope said.

Embracing independence

Bruce Camplin can not bear to think about what life would have been like for him if he had not moved into his Specialist Disability Accommodation apartment.

Far from living in the outer suburbs, Bruce is right in the heart of the Gold Coast, living proof of the scheme working as it should.

Bruce has arthrogryposis, a joint and muscle disability, which means he can’t bend his knees or elbows.

Before he moved into SDA, he had been living in institutions his entire life.

“It was no privacy … to having no real sense of independence,” he recalled.

“I thought that what I had for 50 years was the best that I was going to have.”

He has now embraced making his apartment his own, covering every available space with homely touches like beach knick-knacks, a whisky decanter, and spice racks.

His apartment is complete with automatic doors, blinds and lights, a customised bathroom and benches at wheelchair height. He now needs less time with support workers as a result.

“It can make people more independent and social and give them a sense of dignity and everything that goes with having your own home,” he said.

More than ever, he now feels part of the community, and has friends all over his apartment block and at the local surf club, where he has begun swimming.

While it has been life-changing for Bruce, the goal of getting people out of group homes en masse appears to have failed.

There is no accurate data, but disability advocates say the number of those in group homes is around 17,000 people, which is roughly the same as when the SDA policy was introduced.

There has been progress with getting young people with a disability out of aged care, with enrolments decreasing from around 5,500 people in 2018 to 960 people this year.

Risk of a ‘squandered’ opportunity

Disability housing consultant Brent Woolgar described what has happened in SDA as “market failure” that came about from a lack of regulation.

He was concerned that because so many investors have been burnt, investment in new houses will dry up, and houses won’t be built where they are actually needed.

“I just have this real sense that we’re really getting to a point where we have potentially squandered a once-in-a-generation, potentially multiple-generation opportunity, to provide amazing housing outcomes for people with disability,” he said.

He said a key problem was that the NDIA — which has been set up to help people with a disability — has been asked to manage a mass housing rollout.

“I do think there was a potential huge missed opportunity for the community housing sector to get more engaged, and I think we would’ve had a much more successful outcome,” Mr Woolgar said.

In a statement, the NDIA said it was “a market steward” of the scheme.

“The NDIA is committed to supporting a robust and efficient market for Specialist Disability Accommodation that gives NDIS participants the modern options and choices that they deserve,” a spokesperson said.

“SDA investors should always conduct their own thorough due diligence and research, and seek independent legal and financial advice when deciding whether to invest in SDA.”

The agency also said it had made progress on getting participants out of larger group homes, with the number of people living in homes with six or more residents almost halving over the past three years.

While investor Tony Wilson is facing an uncertain future, he wants much more to be done to stop others from ending up in his situation.

He aims to start a class action against certain unscrupulous investment brokers.

“It’s just very frustrating and saddening.”

Watch Four Corners’ full investigation, Empty Promises, tonight from 8.30pm on ABC TV and ABC iview.