The 2016 Intergenerational Report from Treasury predicted that by 2050 the numbers of people in Australia over 65, currently nearly a quarter of the population, will have doubled. Average age expectancy will be over 95 for women and men. Where will those people be living?
Growing recognition in media and government forums of the need for a dramatic increase in affordable housing has prompted some activity at federal government level and by the NSW government. The slow, fragmented, and uncoordinated character of these actions to date suggests however that the true scale and extent of the risk of homelessness across the age cohorts has not yet been fully grasped by decision makers.
The media does highlight the massive problems facing young people, especially in areas close to cities. We often read of middle income young couples attempting to secure an affordable home at auction only to be stymied by cashed up investors. The successful bidders, their wealth- accumulating aspirations inflated by negative gearing and capital gains tax concessions can easily raise deposits for a sixth, seventh or tenth investment property.
These favoured investors may have started as modest earners, the “mums and dads” so frequently referenced by our Federal Treasurer, or they may be hugely wealthy already, or they may even be federal parliamentarians.
In all cases, they are individuals who from any consideration of equitable or efficient use of public funds, do not require such generous tax concessions to grow their wealth.
Less visible in the media are those older Australians who finish their working lives without owning a home. Reversing the trend of earlier generations, this cohort, retired people without homeownership, is growing every year, inexorably. Older women especially, because of lower and interrupted earnings have little superannuation and an even harder time trying to find paid work once they are in their sixties. Once they stop earning they cannot afford private rent.
Neither the NSW or the Commonwealth government seems to recognise that hundreds of thousands of older people without a home or substantial savings are vulnerable to homelessness once private rents are raised beyond their capacity to pay. Public housing lists are overflowing and waiting time can be years. Social housing offered by NGOs large and small provide decent and secure rentals to such individuals but can assist only a small fraction of those pushed out by ever increasing rents and house prices.
What happens to older people rendered homeless by high rents is that often they become ill and are eventually placed in residential aged care, at massive cost to the commonwealth.
Solutions, cost efficient for governments, attractive to large scale private investment and supportive of individuals do exist.
Federal Treasurer Scott Morrison we are told is to visit Britain soon to inform himself about how they are providing affordable housing, which they are with considerable success. He could also drop into the US, to New York or Washington D C, or to Canada for similar enlightenment.
All first world countries, like us, face rapidly ageing populations, greatly increased longevity, jobs growth mainly located in capital cities, and a global investment community where the will and the ability to scoop up city houses and apartments knows no limits, unless government starts to impose some.
In the UK, the US and Canada relevant instruments including specially designed government bonds, subsidies for large scale developments, partnerships with NGOs, and above all inclusionary zoning, that is regulation requiring developers to offer a percentage, perhaps 15%, of all new units as affordable, are keeping lower income individuals housed.
The NSW government has received advice from its Greater Cities Commission in support of inclusionary zoning, at a modest 5 to 10%. Despite this government’s enthusiastic selling off valuable public housing stock, adequate funds to accommodate the 60000 currently on the NSW public housing list are still beyond this otherwise cashed up government.
The NSW the planning minister has acknowledged that current policies may produce more dwellings but these are not available to low or middle income people. They cost too much and the competition among bidders is grossly unfair. Rob Stokes has noted the distortionary effects of the negative gearing concession available to investors in housing. He has published for comment a proposal for streamlining and speeding up the planning process. His proposals would allow expert committees to override councils and agencies taking too long to reach decisions, and ensure higher technical standards and more consistency across the state.
NSW has also responded to the need for city based affordable housing by announcing funds for a 20-apartment social housing complex at Woolloomooloo in inner Sydney to be managed by the Women’s Housing Company, a small scale but welcome decision.
While better planning processes would facilitate faster development of housing, they would not alone produce more affordability .At both levels of government it should be clear that if more housing comes onto the market without effective government mandates for inclusionary zoning for affordability, and without cutting back or abolishing the generous gearing incentives to those who are already home owners with multiple investment properties, then all the new properties will be gobbled up by the investors. Homelessness will grow from an established risk to a national catastrophe. Perhaps Treasurer Morrison may understand this logic better after his information gathering visit to the UK, and act with urgency to get together with his state colleagues to put coordinated and effective action in place.
Susan Ryan AO recently concluded terms as Age and Disability Commissioner at the Australian Human Rights Commission. She was Education minister and Minister Assisting on the Status of Women in the Hawke Cabinet. She has held leadership roles in several Superannuation bodies.